Another major company abandoning Downtown for the Southside.

[thelakelander]

Point blank, there needs to be a financial or quality-of-life incentive to invest and remain in DT Jax and the surrounding neighborhoods in general (Riverside/Avondale & San Marco excluded).  Right now, there really isn't one.  

This city should really look into doing what Philly did a decade ago by making the area a tax abatement zone for at least 10 years or so.  This should be coupled with public infrastructure investment (mass transit, integrated land use, sidewalks, parks, schools, etc.) that makes urban life worth living.

Tax Breaks Drive a Philadelphia Boom

AFTER years of losing population, the downtown region, known as Center City, is booming, with developments going up and old buildings being transformed into lofts and condominiums.

The construction, fueled by tax breaks, has succeeded in halting the city's 40-year population decline. Center City, which has the nation's third largest downtown residential population, behind New York and Chicago, is experiencing its fifth straight year of increased housing starts, both new and rehabilitated units. Center City's population grew to 88,000 by the end of 2005 from 78,000 in 2000. Even more striking, the number of households rose by 24 percent, according to figures compiled by the Center City District, a business-improvement group.

The changes are drawing people like Sheryl Bar, who had never anticipated the extent to which a change in venue would mean a change in perspective. Since moving into a condo in the city, "we feel like newlyweds again," Mrs. Bar said, referring to herself and her husband, Dr. Allen Bar, with whom she raised three daughters in a house they built in Villanova, a Philadelphia suburb.

As a surgeon at Pennsylvania Hospital, Dr. Bar can walk to work from their condo. Now they go out four or five nights a week, as opposed to four times a month when they lived in the suburbs.

"Instead of commuting to work, he's home within minutes, puts his feet up for a while, and then we go have dinner and see a movie," Mrs. Bar said. "I loved bringing up my children in Villanova, but this is so rejuvenating. It really has been transformational for us."

The same could be said for Philadelphia.

That downtown Philadelphia has been experiencing a residential boom is no big surprise. Cities across the country have benefited from the real estate development frenzy of the last few years. But the changes have been accelerated here by the use of tax breaks for residential developments. Philadelphia is one of the only places to offer a citywide 10-year tax-abatement program.

The program, which started with residential conversions in 1997 but expanded to new construction in 2000, holds the tax assessment at a property's predevelopment level for 10 years. The Bars, for instance, pay just $1,200 a year in property taxes rather than the $12,000 they would pay without the abatement on their $1.1 million 2,600-square-foot, three-bedroom, three-bath condo designed by SHoP Architects of New York City.

"In the beginning, the abatement program was 100 percent responsible for getting things going," said Paul Levy, president of Center City District, which was formed in 1990 to address the decline of downtown Philadelphia. "Now there is a discussion going on about whether or not it's still needed."

Development is continuing on an ever-grander scale. The skyline is being reshaped by Waterfront Square, the largest luxury condo project in the city's history, with two towers under construction along the Delaware River, and three more in the planning phase.

Toll Brothers, a company known for building so-called McMansions in the suburbs, is redeveloping a historic United States Navy site on the Schuylkill River, a property the company has owned since 1988. The 23-acre project, called Naval Square, will have 750 homes, both condos and town houses.

According to a report released late last year by the Center City District, from the time that tax abatements were passed, more than 8,000 converted and new units will have been added to Center City, and half of all new residents benefiting from tax abatements came from outside the city.

Those who lived in the city before the newest influx see a big change in the character of the downtown area.

In May 2005, Anthony Forte and his dog, Philly, moved from his town house in a quiet, residential neighborhood to a loft condo in the heart of Center City. Known as the Jewelers' Building, one of Philadelphia's more recognizable buildings, the 106-year-old six-story structure still has much of its original Colonial Revival detailing intact even though it sat empty for years.

"The city has been a great place for me to live, but it's become much more vibrant," Mr. Forte said. "Philly always had its residential areas that are quaint, which some people love. But now downtown is extremely diverse, with lots of residential mixed with restaurants, galleries and high-end retail. My only regret is that I got a new car, because I don't drive anymore." Like 37 percent of downtown residents, Mr. Forte walks to work, the highest percentage of any major American city, according to census data compiled by the Center City District.

Mr. Levy, the Center City District's president, said, "We didn't reinvent downtown living, but in the last five years, it's been explosive." By decade's end, the city expects to add another 7,000 units.

Now, the tax-abatement programs have become somewhat controversial. While a small percentage of wealthier residents are living in high-end properties and are paying very little in taxes, a majority of the longtime residents who suffered through the bad years are likely to see their taxes go up as property values rise.

Mildred Ruffino has lived on the city's south side for 32 years, with much of her family close by. The tax-abatement program, which has spurred housing almost exclusively downtown, is now spilling over to other neighborhoods. Mrs. Ruffino's street will soon have eight town houses where a bakery once operated.

"I realize the economic situation and what the city is trying to do to bring back residents, but it's exorbitant," said Mrs. Ruffino, who works in the accounting department of an architectural firm. "An empty bakery isn't doing anybody any good. But 10 years is a long time to be tax free."

Yet there is no question that tax abatements have had an impact on the city's real estate and development industry, said Stephen P. Mullin, a senior vice president and principal of the Econsult Corporation, an economic research firm in Philadelphia.

"You couldn't make money here in Philly building something new five years ago," Mr. Mullin said. "Obviously, low interest rates helped as well. But even with that, you needed the extra bump. Now, instead of property values declining, which they were doing for years, they're increasing, and everyone benefits from that."

Even though it is difficult to tease out the precise impact of tax abatements on the city's economic fortunes, they have certainly succeeded as a marketing tool. "Ads in the real estate section prominently feature the tax abatement," said John Kromer, senior consultant with the Fels Institute of Government at the University of Pennsylvania. "Property taxes in the suburbs have been increasing. So this is one area where the city can make an apples-to-apples comparison with the suburbs and win."

David Grasso, president of Grasso Holdings, is convinced that even in the current climate, phasing out the program entirely would have a devastating impact on development, if for no other reason than people have come to expect it. He points to the Packard Building condominiums on South 15th Street. Because it was first intended as rentals the building was initially prevented from taking advantage of the tax-abatement program. "We tried to sell units in early 2005 without the tax abatement, and sales were very difficult," Mr. Grasso said. "So we appealed to the city and won, and sales picked up considerably."

http://www.nytimes.com/2006/01/08/realestate/08nati.html?_r=1&pagewanted=2

[Miss Fixit]

Jacksonville desperately needs the equivalent of Savannah College of Art and Design, combined with a bestseller (along the lines of Midnight in the Garden of Good and Evil) that will draw tourists to our historic districts.

[Keith-N-Jax]

Jacksonville desperately needs Leadership!!!!!!!!!!

[trigger]

"Jacksonville desperately needs the equivalent of Savannah College of Art and Design..."

I thought a rehabilitated John Gorrie Middle School in Riverside would have made an excellent location for a private arts college (with plenty for buildings/properties available in Riverside for later expansion). I floated the idea with a couple of people before the school building and grounds were sold and they thought I was insane. Instead, John Gorrie is being turned into condominiums (what a creative concept).

[urbaknight]

It's alot cheaper to park in Downtown Jacksonville than most, if not all other major cities. People shouldn't be complaining about parking. If JTA were much more efficient, people could commute back and forth on the buses, and God willing in the future, trains and streetcars. Parking would not be an issue and it's cheaper to take the bus. I say again, if only JTA were much more efficient.

[RiversideLoki]

It's alot cheaper to park in Downtown Jacksonville than most, if not all other major cities. People shouldn't be complaining about parking.

1) http://hyperboleandahalf.blogspot.com/2010/04/alot-is-better-than-you-at-everything.html

2) It's a lot cheaper in *some* spots. RPS, CPS, and the other large parking chains make it prohibitively expensive to park downtown if you're not on the street/feeding a meter. And even then, prices for meters are inconsistent. Some of the meters by the Jail you can park the entire day for a dollar, meanwhile, a block away you only get an hour for that same dollar.

As far as garages are concerned, the cheapest one is probably the Waters street garage. But all of the newer garages are pushing 2 dollars an hour. And don't get me started on the "buildings demolished and converted into surface lots." Even if you pay them, you still end up with one of their fake tickets half the time.

[thelakelander]

The parking issue with many major companies operating in downtown is that it costs them a lot more in DT than it does in the burbs.  If you're trying to save money, that's a good area to cut costs without hampering productivity.  In many cities, the vibrant DT environment makes it worth spending a little more.  However, since there is no quality-of-life element/vibrant environment that makes it worth paying more to stay in downtown Jax, why bother?  DT isn't all peaches and cream now and it gets a little worse every time another major player bails.  It appears that we have not hit rock bottom yet so the question becomes what is the city going to do to stop this continuous negative stream?  Whatever the solution is, it definitely won't be what we've been doing the past 10 years.

[Keith-N-Jax]

You mean 20 to 30 years.

[thelakelander]

^last 50 to 60.

[simms3]

Parking is a tricky thing to figure out and expensive for the developer/owner (and is not fully passed through to the tenants).  It's usually one of the necessary challenges for a developer to make the rest of the project a financial success.  Companies complaining that parking is expensive for *them* are full of crap.  It's more expensive for me to park my car in my residential building in Atlanta than most garages in DT Jax.  Jacksonville has the cheapest parking of practically any city (and the crappiest looking garages).

I agree with everything Trigger said on bottom of page 1.  Poor corporate leadership making excuses and being lazy at the same time.  Adecco is more understandable because a foreign company took over MPS and is probably looking to reduce any costs and streamline the business (and they have no connection or allegiance to Jax).

I also agree with Lakelander.  Something *drastic* needs to be done.  We cannot afford to become a Birmingham and fall off the map.  We need to find out how Charlotte and Nashville are getting their companies to invest downtown and not in the suburbs.  Granted the companies in Charlotte are not as cash poor as your average Jacksonville company, we need to tap FNF, Everbank, LPS (though they may be in trouble), and a few others to do something.

The other problem with Jax companies (like Rayonier or Landstar or Gate or Winn Dixie) is that they aren't the kind of companies that need a downtown office building or have too few office workers to need much downtown space.  And we don't have any major law firms.  I think we have local offices for 1 of the big 50 firms, and the rest are small Jax/FL law firms that require less than 30,000 SF.

Homegrown firms in the design/build category like RS&H and Haskell need a sprawled building to house different in-house "sections".  At least Haskell is near downtown.  It's going to be a real challenge to get companies to move offices downtown.  We are too "industrial" of a city to facilitate the need for that kind of space.  Our best bet I guess is just filling what we have.  A bright spot may be that if a large vacany opens up in a trophy tower in Jax we may be able to pull another corporate HQ from another city looking to make a cheap move.

[thelakelander]

Companies complaining that parking is expensive for *them* are full of crap.  It's more expensive for me to park my car in my residential building in Atlanta than most garages in DT Jax.  Jacksonville has the cheapest parking of practically any city (and the crappiest looking garages).

You're only parking one car.  What happens when you're paying to park 500 to 1000 every day?  My company is getting ready to relocate to the Northbank next month.  This is a major concern and we're only looking for 15 spaces.

[urbanlibertarian]

lakelander wrote "My company is getting ready to relocate to the Northbank next month."

So when will you be moving to Springfield?

[thelakelander]

Maybe before the end of the year.  That's something in the works too.

[outofhere]

I think Johnny Simpatico makes sense.

In Jax a parking problem exists when someone can't park right in front of the building and walk right inside.....be it downtown, San Marco or Riverside Avondale.

[JC]

I think Johnny Simpatico makes sense.

In Jax a parking problem exists when someone can't park right in front of the building and walk right inside.....be it downtown, San Marco or Riverside Avondale.

Exactly!