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bobliocatt

LandMar may take over Shipyards development

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LandMar Group LLC is considering purchasing The Shipyards, one of the largest private developments in downtown Jacksonville, according to a draft press release released today.

The purchase would be part of a settlement between current Shipyards' developer, TriLegacy Group LLC, and the city. The company and city officials have been at odds over how $36.5 million of city money intended for public improvements at The Shipyards was spent.

The Shipyards is planned as an $860 million private project that would include public improvements, including a new park and expansion of the Northbank Riverwalk, and private aspects, including shops, boat slips, office space, condos and a hotel.

Look for much more on this story in Tuesday's Times-Union and later here on Jacksonville.com.

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This sounds pretty big and positive. Land Mar is one of my employer's biggest clients and one of the region's largest development firms, with the financial capital and a solid background to get this development finally build.

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ALLRIGHT!!!!

:D

I was worried that this project might stagnate. I wonder if LandMar will simply implement the master plan that Tri-Legacy did or make changes of their own. I'll be up early to read the details.

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I'll be up early or either late to read the full article too. This could possibly be win-win situation for me personally. It would be nice to see them pick up where Tri-Legacy left off, but it would also be nice to work on some new ideas for the site. I'm sure this will be a big topic tomorrow at work.

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Developer considers buying Shipyards

LandMar would assume responsibilities for Northbank project.

By MARY KELLI PALKA

The Times-Union

A Jacksonville-based residential developer is considering purchasing one of the largest private developments in the city's downtown, an action that could help settle a legal dispute between the current project owner and the city.

If LandMar Group LLC decides to purchase The Shipyards, the company would take over the responsibilities of current developer TriLegacy Group LLC, according to a draft news release given to the Times-Union Monday.

Those responsibilities include completing $36.5 million of public improvements on the project -- expanding the Northbank Riverwalk, providing a public park and widening Bay Street. It also includes repaying the more than $40 million the city borrowed in tax-exempt bonds to lend TriLegacy for the public improvement portions of the project. So far, the city has given TriLegacy $36.5 million.

The draft news release leaves out a lot of details of the settlement between TriLegacy and the city, including what would happen if LandMar chooses not to purchase The Shipyards and details of how $36.5 million has been spent.

City General Counsel Rick Mullaney wouldn't provide any additional details about the proposed settlement, which he said could be finalized this week.

A dispute between the city and TriLegacy became public in April when the city questioned how TriLegacy spent $36.5 million the city put in for public improvements.

Mullaney said LandMar and its chief executive officer, Ed Burr, have been a "very positive and important part" of the city's discussions with TriLegacy the past few weeks.

"We consider them to be developers with an outstanding reputation," Mullaney said.

He said any developer who purchased The Shipyards would have to provide the city with the public improvements already agreed upon, direct at least $36.5 million to those improvements and agree to the debt repayment plan in the city's original redevelopment agreement with TriLegacy. That plan calls for taxes generated from the project to be used to repay the money. If the taxes aren't enough to cover the debt repayment, the developer is supposed to pay the difference.

The first $3.15 million payment on the bonds is due next year.

Michael Munz, a spokesman representing LandMar, declined to comment Monday night.

In the draft news release, which was reviewed by Munz's office, Burr said he was thrilled with the possibility that LandMar might take a leadership role in The Shipyards.

"We salute the shared vision of TriLegacy and the city for this site that is so integral to the future promise of downtown and its unlimited potential for greatness," Burr is quoted as saying in the news release.

The $860 million project when approved in 2001 was expected to include shops, boat slips, office space, condos and a hotel.

LandMar would have up to 120 days to more thoroughly review the project before deciding to buy. If LandMar decides to make the purchase, the company would agree to build One-Shipyard Place, the first condominium planned for the site, according to the release. The release said construction would start "as soon as possible after the signing of a definite purchase contract, and could be completed in about 18 months."

The city and TriLegacy have been working since April to settle their disagreement about the public money.

TriLegacy records show that the company combined the $36.5 million with $15.4 million in private money for the overall development and then spent all of that money on a variety of expenses, including some of the public improvement work, mortgage payments, marketing materials, meals and entertainment.

TriLegacy informed the city in December that $15.4 million had been spent on the public improvements, according to records from the city General Counsel's Office released in April. An attorney for TriLegacy said in April that company officials believed they could use the money advanced by the city any way they felt appropriate, as long as in the end, an equal amount was spent on the public improvements. City attorneys said the money should only have gone toward public improvements.

TriLegacy is a company founded in 1999 by the Spence family to purchase and develop the land on the riverfront that used to house shipyards.

Carlton and Jeff Spence wouldn't comment but in the draft news release they're quoted as saying they shared the city's goal of making The Shipyards a project that would enhance downtown.

"We chose to pass the baton to LandMar after considering many possible development partners. We feel confident LandMar has the financial resources, development expertise, environmental commitment, great love of Jacksonville, and above all a sense of stewardship needed to develop The Shipyards," the Spences are quoted as saying.

LandMar made its name creating lower-priced country club communities, developing the large projects and selling them to national home builders. With houses costing $120,000 to $350,000, the communities proved popular, particularly with Northern transplants.

Among the company's projects are Osprey Pointe on San Pablo Road, Hampton Glen on Baymeadows Road and Tall Cypress Cove and Willow Pond in Mandarin. In 2002, the company finished the LandMark Condominiums, a 44-unit luxury tower overlooking the Atlantic Ocean.

In 1999, LandMar embarked on an on-going partnership with Crescent Resources Inc. of Charlotte, N.C., a move that brought additional cash resources to the Jacksonville-based company.

LandMar's move to take over The Shipyards didn't surprise other local real estate company officials, who said LandMar was well positioned for the responsibility.

"They cannot have picked a better company," said Roger O'Steen, chairman of the PARC Group, who has been involved in local residential development for about 25 years. "They have the development expertise. Most importantly, they know how to position their product in the marketplace. They're very good at what they do."

The company possesses both the money and the expertise needed to do a large-scale project like The Shipyards, said Greg Matovina, president of the Northeast Florida Builders Association, who pointed at the high-rise condominiums LandMar has done at the beaches.

"They're very strong financially," Matovina said. "They're a very well-run company."

LandMar was founded in 1987 by Burr, a Jacksonville native who previously worked as a real estate specialist at Coopers & Lybrand in Miami and New York. Recently, the company has been involved in a range of residential, commercial and mixed-used developments throughout the Southeast.

Last week, the Jacksonville Port Authority approved a deal allowing ICS, the main company owned by the Spence family, to build a warehouse at the Talleyrand Marine Terminal, so long as the city reaches a settlement on the Shipyards project.

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Hopefully, they'll be able to add the other components of this project sooner. The Shipyards won't be a success until the whole site is developed. Let's hope they'll be quick about it.

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If LandMar doesn't make this purchase, then you can kiss the Northbank's largest development and the billion dollar mile good bye! What ever happens, there won't be a riverwalk or park completed before the Super Bowl. I guess this entertainment zone will basically be a dirt field.

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Project property could go to city

If The Shipyards developer can't sell it, the city would get the deed to the land.

By MARY KELLI PALKA

The Times-Union

If the developer of a large riverfront project in downtown Jacksonville isn't able to sell the property to another investor, the city will get the deed to the land.

That's according to a draft settlement agreement between the city and TriLegacy Group LLC, the current owners of The Shipyards, one of the largest planned developments in downtown's history. The draft is dated Monday, but it hasn't been finalized.

LandMar Group LLC has already notified city General Counsel Rick Mullaney that it's considering purchasing The Shipyards. But LandMar would have at least 120 days to make a final decision on the buy.

If the Jacksonville-based company backs out of the deal with TriLegacy, the city would receive the deed to the property.

TriLegacy, owned by the Spence family, would also pay a maximum of $14 million to the city to help cover debt from issuing tax-exempt bonds for public improvements on the property.

About five months ago, Jacksonville officials questioned how TriLegacy spent $36.5 million intended for public improvements at The Shipyards project when TriLegacy officials acknowledged the money was gone, but the public portion of the work wasn't completed. TriLegacy officials have said they did nothing wrong, but the city said the company should have spent public money only on the public projects.

The $860 million project was expected to include public aspects, such as a park, Riverwalk expansion and Bay Street widening, and private aspects, including condos, shops, office space, a hotel and boat slips.

The amount TriLegacy owes the city would be determined by subtracting the existing fair market value of the project site from $43.2 million. The city issued $46.7 million in tax-exempt bonds to pay for the public improvements, but the city still has $3.5 million of that money, which TriLegacy would have received when the public portions of the project were complete.

The city and TriLegacy would each pick an appraiser and those two people would pick a third appraiser to come up with the market value. An average of the three appraisals will determine the value, though there would be a slightly different method for determining the value if the appraisals come back substantially far apart from each other.

TriLegacy, Carlton Spence and Jeff Spence, who would all guarantee the payment according to the draft settlement, wouldn't have to pay more than $14 million. That's because the value of the land is thought to be at least $15 million, which is what the Spences paid in 1999, and at least $14 million has already gone toward the public improvements, according to the draft settlement. That would leave about $14 million to reach the amount the city would still need to pay off the debt. The amount could be lower, depending on the site's market value.

Payments would start in September 2005, according to the draft settlement.

Paul McCormick, spokesman for TriLegacy, wouldn't comment about the draft settlement until it was finalized. But he did say, "We're excited that the end of the road is a real distinct probability."

Mullaney also wouldn't comment about the details but said he hopes that a finished agreement happens this week, possibly as soon as today.

If LandMar decided to purchase The Shipyards, they would still agree to build One Shipyard Place, the first planned condominium on the Northbank property, plus finish at least $36.5 million in public improvements at the site. But what's not clear is how the rest of the project might look.

Mullaney also said the settlement is intended to be a global agreement that would resolve The Shipyards issue and a lease agreement between the Jacksonville Port Authority and ICS Logistics Inc., another company owned by the Spence family. The port authority last week approved a deal to allow ICS to build a warehouse at the Talleyrand Marine Terminal, so long as The Shipyards issue was settled.

The settlement also would end the Spence family's development agreement at Cecil Commerce Center, a former Westside military base. City officials said in March that TriLegacy Commerce Group LLC didn't provide the required paperwork on time for the deal. The company disputed the termination.

As a part of The Shipyards settlement, the Spences would agree the Cecil Field agreement is terminated.

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