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Targeted Hotel REV Grant

Based on standard industry metrics (ADR – Average Daily rate, REVPAR, Revenue Per Available Room, and Occupancy) the DIA has been advised by industry consultants and through studies that the current supply of limited service, select service and extended stay hotel rooms, together with our large convention and meeting hotels within the Downtown Jacksonville, exceeds the current demand from business  and leisure travelers and as such occupancy and ADR are both below target for a healthy hotel sector.  However, adding new room capacity in unique product types (such as boutiques hotels which do not currently exist within Downtown) does not directly compete with current supply and can also serve to increase visitation and encourage longer stays, which ultimately add to the culture and vibrancy of the area and leads to an increase in ADR.  Further, the City will benefit from this activity through increased ad valorem taxes, local option sales tax, and 6% bed tax dollars.

As entertainment options and amenities with public interest are increasing in the downtown area, an opportunity exists to diversify the breadth of hospitality offerings within Downtown Jacksonville to include boutique hotels and properties with higher design and service levels and amenities that will contribute to the economic growth and vitality of the area. The DIA Targeted Hotel REV Grant is implemented to facilitate the addition of hotel properties that fit these criteria and will improve the current mix in downtown Jacksonville with the intention of strategically increasing visitation and the overall market demand for hospitality services.

Similar to the DIA Multifamily Housing REV Grant, the DIA Targeted Hotel REV Grant will fill the economic gap that exists between achievable rents/NOI, capital requirements, and development costs.
  • The program provides for a recovery of a portion of the incremental increase in ad-valorem taxes, (“Annual Project Revenue”) on real and tangible personal property, which is produced as a result of the hotel property development.
  • Unless further restricted otherwise in this program, the maximum grant will be limited to 75% of the City/County portion of the incremental increase in ad valorem taxes.
  • The maximum life of the REV grant will be 20 years from completion but in no event longer than the payment due in 2046 for the calendar year 2045 taxes payable in April 2046. (this duration exceeds the life of the applicable CRA’s).
  • The amount of the grant is determined by DIA based on the factors below, not based on applicant request or argued need.
  • Recipients of the Targeted Hotel REV Grant must maintain boutique status for the term of the REV grant.
  • Overall Program eligibility:
    • To be eligible for the program the project must develop at least 25 new hospitality units/keys in Downtown Jacksonville, and not more than 150 keys/units.
    • Limited Service, Select Service, Extended Stay and Convention Hotels do not qualify
    • The property must be rated 4 star or above
    • The property must contain a full-service restaurant open to the public serving three meal periods/day a minimum 6 days/week
    • A boutique hotel has a distinct character, intentional design and decor, and personalized service. Each boutique hotel has a unique theme; some are historic, some are culinary-focused, and some focus on specific elements like a book, a color, or a famous figure. The theme is present not only in the hotel’s aesthetic, but perhaps also in its name, staff uniforms, amenities, and more.
    • A hallmark of a boutique hotel is style.  Each element of the hotel’s look is carefully chosen, and some even showcase art or souvenirs that the owner personally handpicked. Boutique hotels carefully curate everything and interior and exterior design is coordinated, unique and high-end.
    • Due to a boutique hotel’s intimate size, its staff can focus on delivering extraordinary guest service.
    • The DIA will confirm compliance with the eligibility requirements and additional commitments made by the Developer through annual reports and additional monitoring as needed.
  • No DIA Targeted Hotel REV Grant application will be accepted for any hotel project that contemplates demolition of a Historic Property (one having local landmark designation or identified as a contributing structure in the National Historic District or properties over 50 years old and determined to be historically and culturally relevant by the DIA Board in its sole discretion).
 

A. FOR HOSPITALITY DEVELOPMENTS ADJACENT TO THE ST. JOHNS RIVER OR RIVERWALK

The program provides for a recovery of a portion of the Annual Project Revenue, on real and tangible personal property, which is produced as a result of a hospitality property and related development within the DIA Boundary and immediately adjacent to the St. Johns River or Riverwalk.

The amount of the grant will not exceed demonstrated financial gap AND is determined by:
  • The amount of retail/food and beverage space included in a mixed-use development;
  • Amenities for guests which may also be open to the public; and
  • Design factors identified below.
Conditions of Eligibility for any level of REV Grant:
  1. Developer must make a substantial commitment to assume responsibility for, or contribute to, an organization (including, but not limited to, the City through the Parks Partnership Program) to provide for the development, maintenance, or programming in the adjacent public space. Examples of acceptable commitments may be assuming responsibility for maintenance of the adjacent Riverwalk, or funding the same, for the life of the REV, donating a major piece of art to the park, or construction of a playground or sport court, etc. Commitments will be evaluated by DIA staff to determine materiality and consistency with the intent of this section. A one-time up- front commitment valued by DIA at not less than 3% of minimum total Private Capital Investment of the Developer used in calculation of the REV shall be deemed material however other values and payments over time may be considered material as described in the Structuring the Deal section of the BID.
  2. In any hotel development immediately adjacent to the St. Johns River or Riverwalk, ground level restaurant and/or bar space that actively engages the waterfront and/or Riverwalk shall be provided of not less than:
    1. No less than 70% of the riverfront ground level façade linear frontage; and
    2. No less than 50 feet in depth off the riverfront façade of the building
    3. Higher level spaces above ground floor may be approved by the DIA Board in unique circumstances where the ground level of the building is not at the same grade as the Riverwalk.
  3. The ground level of any structured parking garage associated with such project facing the street must be wrapped with a) hotel units, b) amenity space, or c) retail/food and beverage space accessible from the street, except at points of entry and exit.
  4. All levels of any structured parking garage associated with such project and facing or visible from the waterfront or Riverwalk must be wrapped with a) hotel units, or b) retail/food and beverage space, or c) amenity space to screen the garage from the public space.
  5. Developer must provide at no charge to the City, a permanent easement for public access for the Riverwalk trail system as contemplated by the Downtown Zoning Overlay. In the case of areas adjacent to Riverwalk segments constructed over water, the Developer must provide permanent public access easements and bridges connecting the Riverwalk to the upland development considered for incentive.
  6. Developer must provide at no charge to the City, the public View and Access corridor easements or dedications for public use in accordance with the Downtown Zoning Overlay.
  7. Applicant must commit to the minimum private capital investment based on projected development costs as finalized in negotiation with the DIA.
    1. Any deviation below the minimum will result in a pro rata reduction of the Maximum REV payable over the term.
    2. Any reduction of 10% or greater will result in forfeiture of the REV.
REV Grant Factors
The precise REV Grant size will be determined by the following factors:
  • Up to 15% for the development of City-owned lazy / underutilized assets (maximum amount only if purchased at appraised market value without other incentives); plus,
  • 10% for each 1,500 square feet (beginning with 2500 square feet in a single operation) of ground level waterfront, or Riverwalk front, restaurant(s) open weekends, and a minimum of six days per week, and three meal periods of each day of operations (maximum of 30%); plus,
  • 10% for each 2,500 square feet of ground level retail space and 5% for each 2,500 square feet of ground level retail food and beverage space made available for lease to an unrelated third party accessible by the public directly from the river or Riverwalk (maximum of 20%, exclusive of restaurant percentage awarded below); plus,
  • Up to 15% for the inclusion of additional amenities open to the public such as one or more bar or lounge spaces, additional restaurant offerings, spa, meeting rooms, or the like; plus
  • 5% for each 10% of riverfront ground level building façade linear frontage (above the minimum 70%required) that is devoted to ground level retail or food / beverage space accessible by the public directly from the Riverwalk (maximum of 15%)
  • 15% for a minimum 2,500 square foot rooftop food and beverage accessible by the public directly from the Riverwalk
  • Up to 25% for enhanced design and quality including unique architectural features and materials in the subject hotel building(s) or any visible portion of an associated structured parking garage, or both, beyond minimum compliance with DDRB standards (to qualify for this factor, conceptual plans including exterior materials, must have received DDRB approval and the interior plans presented must reflect a level of finish and uniqueness required to qualify as a boutique hotel) plus,
  • Up to 10% total for the provision or utilization of shared use parking through one or more of the following:
    • 5% shall be available for every 25 spaces made available on site for shared parking by off-site primary users;
    • 5% shall be available for every 25 spaces serving the hotel that are secured through off-site shared use arrangements; (maximum 10%) plus,
  • 10% for each occupiable floor above seven (excluding any basement or rooftop, maximum of 30%); plus
  • Up to 10% for resiliency through one or more of the following:
    • Resilient Building Design – up to 5% for utilization of resilient building techniques, such as use of flood-proof materials on first floor/subsurface elements, elevation of critical assets (HVAC, generators, utility boxes, etc.) to above the first floor, and use of reflective materials on the roof to create a “cool roof”
    • Resilient Landscaping and Site Design – up to 5% for designing landscaping around the hotel building to address flooding and heat, including installation of catchment systems, bioswales or green infrastructure that can capture the first 1.5 inches of stormwater on-site or increasing tree canopy to twice the amount pre-construction
      1. The amount of retail/food and beverage space included in a mixed-use development; and,
      2. Amenities for guests which may also be open to the public; and
      3. Design factors identified below.

 

B. FOR DEVELOPMENTS ADJACENT TO THE CREEK FRONT, OR ADJACENT TO A CITY-OWNED PUBLIC PARK

The program provides for a recovery of a portion of the Annual Project Revenue, on real and tangible personal property, which is produced as a result of hotel development within the DIA Boundary and immediately adjacent to McCoy’s Creek, Hogan’s Creek, (or the Emerald Trail adjacent to either creek) or a City owned public park.

The amount of the grant is determined by:

  1. The amount of retail/food and beverage space included in a mixed-use development; and,
  2. Amenities for guests which may also be open to the public; and
  3. Design factors identified below.
Condition of Eligibility for any level of REV Grant:
  1. Developer must make a substantial commitment to assume responsibility for, or contribute to, an organization (including, but not limited to, the City through the Parks Partnership Program) to provide for the development, maintenance, or programming in the adjacent public space. Examples of acceptable commitments may be assuming responsibility for maintenance of the adjacent Riverwalk, or funding the same, for the life of the REV, donating a major piece of art to the park, or construction of a playground or sport court, etc. Commitments will be evaluated by DIA staff to determine materiality and consistency with the intent of this section. A one-time up- front commitment valued by DIA at not less than 3% of minimum total Private Capital Investment of the Developer used in calculation of the REV shall be deemed material, however other values relative to the size of the park and payments over time may be considered material as described in the Structuring the Deal section of the BID.
  2. In any hotel development immediately adjacent to McCoy’s or Hogan’s Creek or the Emerald trail adjacent to such creek, or immediately adjacent to a public park, ground level restaurant and/or bar space that actively engages the waterfront and/or park shall be provided of not less than:
    1. No less than 30% of the creek front or park front ground level façade linear frontage; and
    2. No less than 50 feet in depth off the creek front or park front façade of the building
    3. Higher level spaces above ground floor may be approved by the DIA Board in unique circumstances where the ground level of the building is not at the same grade as the creek or park.
  3.  The ground level of any structured parking garage associated with such project facing the street must be wrapped with a) hotel units, b) amenity space, or c) retail/food and beverage space accessible from the street, except at points of entry and exit.
  4. All levels of any structured parking garage associated with such project and facing or visible from the waterfront or park must be wrapped with a) hotel units, b) amenity space, or c) retail/food and beverage space to screen the garage from the public space.
  5. Developer must provide at no charge to the City, a permanent easement for public access for the Creekside trail system as contemplated by the Downtown Zoning Overlay.
  6. Developer must provide at no charge to the City, the public View and Access corridor easements or dedications for public use in accordance with the Downtown Zoning Overlay.
  7. Applicant must commit to a minimum private capital investment based on projected development costs as finalized in negotiation with the DIA.
    1. Any deviation below the minimum will result in a pro rata reduction of the Maximum REV payable over the term
    2. Any reduction of 10% or greater will result in forfeiture of the REV
REV Grant Factors
REV Grant Factors: The precise REV Grant size will be determined by the following factors:
  • Up to 15% for the development of City-owned lazy / underutilized assets (maximum amount only if purchased at appraised market value without other incentives); plus
  • 10% for each 2,500 square feet of ground level retail space (frontage must be equal to or greater than depth) or rooftop restaurant/bar accessible by the public directly from the street, park, or creek (maximum 20%); plus
  • 5% for each 2,500 square feet of ground level food and beverage space made available for lease to an unrelated third party and accessible by the public directly from the street, park, or creek (maximum of 10%, exclusive of restaurant percentage awarded below); plus,
  • 10% for each 1,500 square feet (beginning with 2,500 square feet in a single operation) of ground level creek front or park front restaurant(s) open weekends, and a minimum of six days per week, and three meal periods of each day of operations (maximum of 30%); plus,
  • Up to 15% for the inclusion of additional amenities open to the public such as one or more bar or lounge spaces, additional restaurant offerings, spa, meeting rooms, or the like; plus
  • Up to 20% for enhanced design and quality including unique architectural features and materials in the subject hotel building(s) or any visible portion of an associated structured parking garage, or both, beyond minimum compliance with DDRB standards (to qualify for this factor, conceptual plans including exterior materials, must have received DDRB approval and the interior plans presented must reflect a level of finish and uniqueness required to qualify as a boutique hotel) plus,
  • Up to 10% total for the provision or utilization of shared use parking through one or more of the following:
    • 5% shall be available for every 25 spaces made available on site for shared parking by off-site primary users.
    • 5% shall be available for every 25 spaces serving the hotel development that are secured through off-site shared use arrangements (maximum of 10%); plus
  • % for each occupiable floor above seven (excluding any basement or rooftop space, maximum of 30%); plus,
  • Up to 10% for resiliency through one or more of the following:
    • Resilient Building Design – up to 5% for utilization of resilient building techniques, such as use of flood-proof materials on first floor/subsurface elements, elevation of critical assets (HVAC, generators, utility boxes, etc.) to above the first floor, and use of reflective materials on the roof to create a “cool roof”
    • Resilient Landscaping and Site Design – up to 5% for designing landscaping around the hotel building to address flooding and heat, including installation of catchment systems, bioswales or green infrastructure that can capture the first 1.5 inches of stormwater on-site or increasing tree canopy to twice the amount pre-construction


C. FOR DEVELOPMENTS NOT ADJACENT TO THE RIVER, CREEK, OR CITY PARK

The program provides for a recovery of a portion of the Annual Project Revenue, on real and tangible personal property, which is produced as a result of hospitality property and related development within the DIA Boundary and NOT immediately adjacent to the St. John’s River or Riverwalk, McCoy’s Creek, Hogan’s Creek (or the Emerald Trail adjacent to either creek), or a City owned public park.

The amount of the grant is determined by:
  1. The amount of retail/food and beverage space included in a mixed-use development; and,
  2. Amenities for guests which may also be open to the public; and
  3. Design factors identified below.
Conditions of Eligibility for any level of REV Grant:
  1. In any mixed-use hotel property development not immediately adjacent to the river, McCoy’s Creek, Hogan’s Creek, or a City owned public park, no less than 30% of the ground level of the linear street frontage shall be retail/food and beverage space.
  2. The ground level of any structured parking garage associated with such project facing the street must be wrapped with a) hotel units, b) amenity space, or c) retail/food and beverage space accessible from the street, except at points of entry and exit.
  3. Applicant must commit to a minimum private capital investment based on projected development costs as finalized in negotiation with the DIA.
    1. Any deviation below the minimum will result in a pro rata reduction of the Maximum REV payable over the term
    2. Any reduction of 10% or greater will result in forfeiture of the REV
REV Grant Factors
The precise REV Grant size will be determined by the following factors:
  • Up to 15% for the development of City-owned lazy / underutilized assets (maximum amount only if purchased at appraised market value without other incentives); plus,
  • 10% for each 2,500 square feet of ground level retail space (frontage must be equal to or greater than depth), or balcony/rooftop food and beverage, each accessible by the public directly from the street (maximum 20%); plus
  • 10% for each 1,500 square feet (beginning with 2500 square feet in a single operation) of ground level restaurant open to the public, directly accessible from the street, whose façade length is greater than its depth and is open weekends, and a minimum of six days per week, and three meal periods of each day of operations (maximum of 30%); plus,
  • 5% for each 2,500 square feet of ground level retail/food and beverage space made available for lease to an unrelated third party and accessible by the public directly from the street (maximum of 10%); plus,
  • Up to 20% for enhanced design and quality including unique architectural features and materials in the subject hotel building(s) or any visible portion of an associated structured parking garage, or both, beyond minimum compliance with DDRB standards (to qualify for this factor, conceptual plans including exterior materials, must have received DDRB approval and the interior plans presented must reflect a level of finish and uniqueness required to qualify as a boutique hotel) plus,
  • Up to 15% for the inclusion of additional amenities open to the public such as one or more bar or lounge spaces, additional restaurant offerings, spa, meeting rooms, or the like; plus
  • Up to 10% total for the provision or utilization of shared use parking.
    • 5% shall be available for every 25 spaces made available on site for shared parking by off-site primary users.
    • 5% shall be available for every 25 spaces serving the hotel development that are secured through off-site shared use arrangements (maximum of 10%); plus
  • 10% for each occupiable floor above seven (excluding any basement or rooftop space, maximum of 30%); plus,
  • Up to 10% for resiliency through one or more of the following:
    • Resilient Building Design – up to 5% for utilization of resilient building techniques, such as use of flood-proof materials on first floor/subsurface elements, elevation of critical assets (HVAC, generators, utility boxes, etc.) to above the first floor, and use of reflective materials on the roof to create a “cool roof”
    • Resilient Landscaping and Site Design – up to 5% for designing landscaping around the hotel building to address flooding and heat, including installation of catchment systems, bioswales or green infrastructure that can capture the first 1.5 inches of stormwater on-site or increasing tree canopy to twice the amount pre-construction

GRANT PROCESS

  1. The DIA staff would take the application from the prospective grantee, and make a recommendation based upon the DIA Targeted Hotel REV Grant program criteria above;
  2. The DIA Board would evaluate the staff recommendation and reject or adopt a resolution approving a grant amount and time frame to be documented by a Redevelopment Agreement agreed to by the Applicant and executed by the Applicant and DIA.
  3. City Council approval is not required for REV grants which comply with this program and DIA action is final.
  4. No DIA Targeted Hotel REV Grant utilizing CRA resources shall be authorized by the Board if it exceeds the term, amount determined pursuant to the criteria above, or otherwise fails to meet the program criteria described above.