A well-connected development group is lobbying the Jacksonville City Council to greenlight a package of taxpayer incentives Tuesday, including a $28 million cash grant, that it says is necessary to build a 15-floor apartment building with a Publix in downtown, a revitalization project Mayor Donna Deegan believes is critical despite looming budgets that will require deep cuts to city services. 

If approved, the city would owe nearly $100 million in cash incentives to a raft of economic development projects by 2032, according to data from the City Council Auditor, a total that has given some council members pause while they must simultaneously weigh tens of millions in cuts to city spending over the next several years. 

After a 3-3 deadlock vote in the council’s finance committee, the full council will debate on Tuesday the nearly $50 million incentive package for a 250-unit apartment building and proposed Publix development near “Pearl Square” — a mixed-use development west of City Hall. More than $21 million of those incentives would take the form of a tax break, while the rest, about $28.25 million, would be cash paid out to the development group upon completion of the project. 

Advocates for the development, including Deegan, say the grocery store and apartments are vital for the continued investment in downtown and increasing a commercial tax base.

“We got to finish what we’re doing. We have to keep the momentum going,” said Mike Weinstein, the mayor’s chief of staff.

But complicating the picture is Amendment 3, a major property-tax cut voters approved last week that will eventually slash about $300 million from the city’s general fund. Statewide, 62 percent of Floridians voted to increase the homestead exemption, for all non-school taxes, to $150,000 in 2027 and $250,000 in 2028. 

The increased exemption has been described as a potential catastrophe for local governments across Florida, with Jacksonville auditors predicting a $200 million hole next year, and another $100 million more the year after. 

“Listen, it would be great to have a Publix in downtown. I prefer taxpayers don’t have to subsidize it. I certainly prefer that it not be subsidized with the completion grant,” City Council President Nick Howland said, before Amendment 3 passed. 

“We’re in the midst of one of the most dramatic revenue uncertainties in policy that Florida cities and counties have experienced in generations.”

The development group Gateway Jax has been working with the Deegan administration to develop various parcels downtown, including the Riverfront Plaza tower and other Pearl Street developments, winning millions in taxpayer incentives going back to 2024. 

Amid the deadlock, Gateway Jax has said the Publix project “cannot move forward” without financial help from taxpayers.

If approved, a funding source will have to be determined to pay the $28 million to Gateway Jax for the Publix completion grant in 2029. 

That grant, however, is just a quarter of cash the city needs to budget through 2032 for a slew of other economic development projects, the majority of which are downtown.

Next year, as Jacksonville stares down a $200 million cut in revenue from Amendment 3, the city needs to find just over $4 million for completion grants and development loans for downtown projects, affordable housing community Campbell Cove and more. Nearly $34 million has already been set aside after the city had a strong fiscal year.

In 2028, when the city’s budget will take another $100 million hit from reduced property-tax revenue, $38 million in incentive payments will be due and another $42 million, including the Publix grant, will be due in 2029. 

Other currently unfunded grants include for three of Gateway Jax’s Pearl Square projects, amounting to more than $29 million in completion awards, as well as a $6.5 million retention grant for the Winn Dixie headquarters on the city’s Westside. 

Starting next year, the city also will begin paying the first of four installments amounting to $50 million of the city’s contribution to the new University of Florida graduate campus in La Villa.

More than $12 million in development loans for housing projects, like the Lofts at Southbank and the affordable housing project Tori Meadows, will come due in the next two years. 

The unfunded incentives could be pulled from the city’s reserves, which remain healthy, or other sources during the budget year, like using savings realized within a year, the council auditor has said. 

“Whether it’s a loan or completion grant, it still is cash out the door well before we receive it back,” Finance Chair Will Lahnen said in October.

To receive the completion grant, Gateway Jax must have a minimum 10-year lease with Publix, or another “similarly well-known top tier regional or national grocer,” according to the proposed terms of the grant. 

Residents downtown say the grocery store is vital to the growth of the neighborhood.

“As a small business owner, I understand first hand what it takes to invest in a community, take a chance at an area, create jobs, and to help build an environment where people want to live, work and do business,” said Tim Hoal, a partner at Hardwick’s Bar on Adams Street. “I believe the new Publix represents much more than a grocery store. It represents progress, investment, and confidence in the future of downtown Jacksonville.”

Molly Farrar is a Report for America corps member and the Florida Trib’s Jacksonville municipal watchdog reporter. She can be reached at molly.farrar@floridatrib.org.