City dismisses foreclosure suit against developer of Laura Street Trio

The city of Jacksonville has dropped a foreclosure lawsuit against the developer of the Laura Street Trio redevelopment project, opening the door to a possible new agreement to revitalize the historic downtown buildings.

SouthEast Development Group Inc., named in the lawsuit, issued a statement on Sept. 16 saying it was “encouraged by the City of Jacksonville's renewed focus on advancing this important project.”

The lawsuit was dismissed a week after SouthEast and city officials announced they were in talks to settle the dispute. In the lawsuit, the city claimed SouthEast owed the city more than $800,000 in unpaid fines for municipal code violations related to the buildings.

In related news, downtown-based Live Oak Contracting issued a press release on Sept. 16 announcing that it had partnered with SouthEast as a co-general partner and equity investor, alongside Southeast Holdings LP and SouthEast Community Investment Fund LLC.

Following a Sept. 9 meeting of the Jacksonville City Council's Special Committee on the Future of Downtown, committee chairman Kevin Carrico said he hoped bringing Live Oak in as an equity partner would address concerns that SouthEast and its principal Steve Atkins had brought too little private equity to the project in recent proposed redevelopment agreements with the city.

Atkins' latest proposal included $85.77 million in city incentives, including $18.3 million in loans and $67.57 million in development grants. The total development cost to convert the buildings into a hotel, apartments, restaurant and bar was $188.67 million.

According to Live Oak, the project will include a 143-room, four-star Autograph Collection Hotel by Marriott, 169 mixed-priced apartments, and retail and entertainment space that “will be unlike anything else in Northeast Florida.”

SouthEast and DIA are at an impasse over an agreement on incentives for the redevelopment of the trio, with both sides disagreeing on who is responsible.

Carrico said in his remarks after the special committee meeting that resolving the litigation was critical to reopening the door to renegotiating the reorganization agreement. If the lawsuit is not dismissed, it is almost certain that Live Oak and other investors will pull out, he said.

In SouthEast's Sept. 16 press release, the developer said it looks forward to working with Mayor Donna Deegan's administration, the Downtown Investment Authority and “all other interested parties” in restoring and repurposing the buildings.

“SouthEast Development Group, DIA and the Mayor's Office continue to negotiate to determine the best path to complete renovations on the Laura Street Trio project. Current plans are to proceed without litigation, as agreed to by both parties,” Deegan said in a statement.

Carrico said he would hire an independent lawyer for the committee to participate in the negotiations.

The trio consists of the First National Bank Building, the Bisbee Building and the Florida Life Building. The buildings were constructed between 1902 and 1912 and are among the last unrestored buildings constructed in the years immediately following the 1901 fire that destroyed much of downtown.

This story has been updated with a statement from Jacksonville Mayor Donna Deegan.