Mayor Donna Deegan and the Downtown Investment Authority (DIA) are proposing a land swap to expedite the development of a new University of Florida (UF) graduate campus in Downtown Jacksonville. The plan centers around acquiring the former Interline Brands Inc. building at 801 W. Bay St. as the campus's initial classroom facility. This building, recently purchased by Gateway Jax in October 2024, could be exchanged for city-owned property, paving the way for UF to potentially launch programs downtown as early as fall 2025.

According to DIA CEO Lori Boyer's presentation to a City Council committee on February 3rd, negotiations are underway to secure the Interline building. Gateway Jax, an investment group, acquired the 38,136-square-foot building for $4 million just months prior through their entity 801 Bay St LLC, according to the Jacksonville Daily Record. The purchase was financed by DLP Lending Fund LLC, a division of DLP Capital, St. Augustine-based developers who are also a partner in the ownership of the blighted Independent Life building.

The urgency for the Interline building acquisition stems from UF’s selection of the area near the Prime F. Osborn III Convention Center for its downtown campus, announced only a few weeks after Gateway Jax's purchase. UF officials, in their City Council committee address, voiced strong support for the city quickly acquiring the Interline Brands building. This move would allow them to relocate their master's program from the Groover-Stewart Building and launch initial programs at the new campus starting in fall 2025. It is unclear if this is in addition to the 22 acres of city land being donated by the city to UF in the undisclosed terms of the deal negotiated by Mayor Deegan. What we do know is that this donation includes the Prime Osborn Convention Center..

The timeline raises questions about potential behind-the-scenes coordination. Considering the Mayor's office and DIA were engaged in discussions with both Gateway Jax involving a variety of their other projects that are in various stages of construction and permitting were they also discussing the UF deal and the land swap for the Interline building before the UF deal was announced?

Adding to the complexity, Outdoor Living 101 filed a Freedom of Information Act (FOIA) request in December seeking complete details on the city properties offered to UF. The initial response only specified 3.62 acres of the total package and generalities about the overall plan. The DIA then before the City Council committee divulged that they were preparing to dispose of those 3.62 acres of city-owned parcels next door to the Interline building for the initial phase of construction.

Council members inquired about the future of the Prime F. Osborn III Convention Center. DIA anticipates demolition of the majority of it in five years, with the Downtown master plan envisioning a new convention center at the Duval County jail site and a temporary exposition hall on the former city hall site. They are proposing building a new jail be built at the Montgomery Correctional Center. While the mayor and DIA champion these moves they would be expensive. Audits project potential city deficits ranging from $44 million to $105 million over the next four years. The cost of a new convention center and jail could add over a billion dollars to the city's debt. The mayor's projected budget shortfalls may have driven her to pursue this complex land swap with DLP Capital and Gateway Jax during the UF negotiations for them to  finance the Interline building acquisition for her off-budget and then provide the land swap. What land is the mayor and DIA offering in exchange?

Compounding the financial concerns are questions as to how the money is moving around. DLP Real Estate Capital, a key player in the Interline building acquisition through a joint venture (PEP10 LLC), co-owns the dilapidated Independent Life building, which has accumulated numerous code violations. DLP's foreclosed on their partner Augustine Development Group and is suinging one of Augustine’s LLCs, Axis Hotels LLC for $10.58 million for unpaid loans. Through Axis Hotels Augustine owns the Ambassador Hotel and Central National Bank, which are located next door to both the Independent Life building and the first phase of Gateway Jax construction at Pearl Square. There are also millions of dollars in lawsuits involving many unpaid contractors.

The City of Jacksonville is further entangled through $14 million in construction incentives approved for the Independent Life, Ambassador, and Central National Banks projects. Due to a lack of revocation clauses in the DIA contracts despite construction delays and unmet timelines the City General Counsel’s office was working on such paperwork in December. So there are lots of opportunities behind the scenes for the mayor, DIA, DLP Capital, and Gateway Jax to work out deals that benefit both sides and the community.

Greater transparency from Mayor Deegan, coupled with increased City Council oversight, would allow for a clearer assessment of whether this deal optimally balances the benefits of a new UF campus and the disposition of the Prime Osborn Convention Center and jail, considering donated land, tax incentives, and public and private financial interests.