Question about Shipyards

[Bridges]

I had a couple questions about the shipyards and not wanting to break them up for Intuition.  I know it was talked about in the Intuition thread, but I didn't want to muddle the talk about locations for Intuition with talk about the Shipyards specifically. 

What is the main reason for not splitting the Shipyards up?  I don't know much about property values or the lot itself, so I assume the main reason is that the whole thing could be sold at a higher price than just a smaller portion of it?  Or at least, it would seem more appealing to a developer?  But has there been people sniffing around at the property to make the city believe that this is the case? 

Who has the say for whether the city will take an offer on the Shipyards?   

I just can't understand why the city wouldn't entertain offers for parts of the Shipyards, especially if it would add value to the area.  Is the city really still waiting for that 1 big magic cure for the property and downtown in general?

A lot of questions, I know haha, but I just don't understand the issue here. 

[Jason]

I don't think anyone really understands all the issues. 

From what I understand, the city has been using the property has bait for a big development to "revive" downtown.  I don't know of anyone other than Intuition that would like to purchase all or part of the property at this time.  Because of the nearby Berkman disaster and multiple failed attempts at developing it, the property seems almost tainted.

[simms3]

^^^That is such a good question!!!!

There aren't really any ongoing developments of similar scope except for in New York and Miami right now.  There are conceptual proposals for big redevelopments in some of the other big cities like DC, Atlanta, San Francisco, Boston, LA and Seattle, but nothing physically UC.

I couldn't imagine a legitimate group with the experience and capacity to get something done to that magnitude even looking at Jacksonville, nor could I imagine investors putting up with that kind of risky allocation nor could I imagine lenders taking the bait (or even pondering DT Jax no matter who the development partners are and where the equity comes from).  The Shipyards was such a huge undertaking that even in the best of times when institutional capital was pondering tertiary markets like Knoxville, TN, it only attracted small local groups, one with no experience whatsoever.  Looking back, it was a fiasco waiting to happen and a crime the city even gave them any money.

You need a legitimate group like Forest City or some big insitutional fund to raise the kind of equity needed and to attract the right lenders (not to mention the experience with similar projects of similar scope).  Actually for something that big you probably need a team with aligned interests.  Not going to happen in Jacksonville, but don't tell City Hall that.  There are only a few groups involved with real estate that can take down $100s of millions of dollars for projects/acquisitions, and none have ever considered downtown Jacksonville as a place to invest.

The only smallish cities that have recently done projects as big are Salt Lake - City Center fully funded by the Mormon Church, and Nashville - Music City Convention Center, backed by the city, major fundraisers and the state of Tennessee.

The biggest projects in Miami about to be UC (Brickell City Centre) are funded by offshore institutional and perhaps even sovereign capital that doesn't even know what Jacksonville is.  The only other $500M++ project in the SE has been Atlantic Station in Atlanta, and it was AIG's first foray into real estate (we all know where they have gone since 2008).  AIG wouldn't consider Jacksonville; in fact now they are only doing stuff in Asia.

I bet the city could enlist a firm to create a master plan, set up a TIF program, and allow developers to carve out parcels for their own smaller scope projects as long as they comply with the master plan and TIF guidelines.

[Tacachale]

A few things here. The city actually owns the land now, wherease we didn't own it during the previous attempted developments. We shouldn't be selling it off in whole or in part just to get something put up; we should be a party in whatever development happens there.

The property is very expensive, and it will only get more so when the market improves. For Intuition to have worked there, the city would have had to reduce the asking price considerably. No clue what the actual figures were, but think about it another way. If we were to reduce the price to a certain point, we could get basically anything built there. For instance, instead of a mostly-industrial site with a beer garden, we could have a building with several beer gardens - and a brewery a few blocks away.

Speaking of which, the city ought to be working its tail off to find another site for Intuition elsewhere downtown. And they ought to come up with a real master plan for the Shipyards site, ASAP.

[fieldafm]

I couldn't imagine a legitimate group with the experience and capacity to get something done to that magnitude even looking at Jacksonville, nor could I imagine investors putting up with that kind of risky allocation nor could I imagine lenders taking the bait

There actually is a pretty substantial private equity group looking at Jacksonville projects.

Is the city really still waiting for that 1 big magic cure for the property and downtown in general?

Unfortunately, yes.

[fieldafm]

The property is very expensive, and it will only get more so when the market improves. For Intuition to have worked there, the city would have had to reduce the asking price considerably. No clue what the actual figures were, but think about it another way. If we were to reduce the price to a certain point, we could get basically anything built there. For instance, instead of a mostly-industrial site with a beer garden, we could have a building with several beer gardens - and a brewery a few blocks away.

The property is only as valuable as the market thinks it is... and right now, the market doesn't think much of it.

The Shipyards is a very important piece of land, I fully agree.  But the unwillingness of the city to even discuss breaking it up speaks to a MUCH larger issue as to how the city thinks downtown is going to develop: top down (risky, massive past failures-including four on this site alone) or botton up (organic, less risky, allows for the innovation of entrepreneurs to shine)?

I think Intuition's efforts on acquiring a portion of the property really highlights a much more fundamental issue with why downtown looks the way it does today. 

If it were up to me, I'd break up the property (the portion he wants is not attractive to residential anyway, the portion adjacent to Berkman II is the more attractive piece of land) and finish the Riverwalk with a link to Met Park and a tie in with the Hogans Creek Greenway. 

Hell, the city still holds significant debt on the property.  Sales of parcels could pay that off and build a Riverwalk extension. 

I'd also put a street grid in across the river at the JEA property.  Otherwise you are going to get another suburban style development with a sea of surface parking on that site (which had the potential of happening as recently as this year). 

[Jdog]

+1000

[Tacachale]

The property is very expensive, and it will only get more so when the market improves. For Intuition to have worked there, the city would have had to reduce the asking price considerably. No clue what the actual figures were, but think about it another way. If we were to reduce the price to a certain point, we could get basically anything built there. For instance, instead of a mostly-industrial site with a beer garden, we could have a building with several beer gardens - and a brewery a few blocks away.

The property is only as valuable as the market thinks it is... and right now, the market doesn't think much of it.

The Shipyards is a very important piece of land, I fully agree.  But the unwillingness of the city to even discuss breaking it up speaks to a MUCH larger issue as to how the city thinks downtown is going to develop: top down (risky, massive past failures-including four on this site alone) or botton up (organic, less risky, allows for the innovation of entrepreneurs to shine)?

I think Intuition's efforts on acquiring a portion of the property really highlights a much more fundamental issue with why downtown looks the way it does today. 

If it were up to me, I'd break up the property (the portion he wants is not attractive to residential anyway, the portion adjacent to Berkman II is the more attractive piece of land) and finish the Riverwalk with a link to Met Park and a tie in with the Hogans Creek Greenway. 

Hell, the city still holds significant debt on the property.  Sales of parcels could pay that off and build a Riverwalk extension. 

I'd also put a street grid in across the river at the JEA property.  Otherwise you are going to get another suburban style development with a sea of surface parking on that site (which had the potential of happening as recently as this year).

Dividing it into parcels is one thing, but dividing it up and reducing the asking price considerably is crazy. If they were going to do that, as I say, they could get a development on the parcel besides a building that will mostly be an industrial facility.

What the Shipyards really needs is a plan we follow through on, whether that includes selling off parts, keeping it whole, building parks, or whatever. It's ridiculous we don't have one yet.

[simms3]

Fieldafm is definitely right about the value of land downtown because there have been multiple sites on the market and off for unrealistic prices (prices so low for most other cities where the same land would be 5x as expensive, but still considered unrealistic for Jax because of the utter lack of faith in DT).

Again, if there is a major private equity group looking at Jacksonville's downtown right now, I'm shocked.  Working in that industry myself, the city as a whole just doesn't register let alone downtown.  From a 3rd person perspective, a lot of funds with institutional capital are chasing core deals in gateway markets, and might put up some equity for large developments in very stable submarkets of those same gateway markets.  At least that's what I'm seeing.  I wouldn't even expect a big fund to do a 75 acre development deal in DT Atlanta, a market 5x the size of Jacksonville, and Houston and Dallas?  No.  Even Chicago is risky for various reasons.

And to reiterate, the "Shipyards" is something like 75 acres in total.  You can put a highrise up on 2.  So far as I can tell given rents, rent growth and basic fundamentals, there is no feasible way or the demand to put up a new highrise office, hotel, condo, or multifamily tower in downtown Jacksonville without major freebies and incentives.  What developer wants to put 75 acres of land in DT Jacksonville on its books, and more importantly what lender would do so?  They'll maybe put up one tower in the corner near Berkman and still have 70 acres to deal with as they slowly fill up their 1st tower.

The city needs to break it up and take what it can get that allows stuff to be built, also potentially with TIF or city tax abatements, because that will increase property values all throughout the area which may mean a wash on city tax receipts despite the handouts (and it will provide at least some momentum for others to get deals done downtown).

Before I knew anything about real estate or capital, I was so excited for all those large-scale multi-tower proposals for Jax, but looking back in hindsight, those were pipe dreams even for major markets.  Laughable proposals to say the least.  And the city bought into them!! LoL

[Steve_Lovett]

^^^That is such a good question!!!!

There aren't really any ongoing developments of similar scope except for in New York and Miami right now.  There are conceptual proposals for big redevelopments in some of the other big cities like DC, Atlanta, San Francisco, Boston, LA and Seattle, but nothing physically UC.

I couldn't imagine a legitimate group with the experience and capacity to get something done to that magnitude even looking at Jacksonville, nor could I imagine investors putting up with that kind of risky allocation nor could I imagine lenders taking the bait (or even pondering DT Jax no matter who the development partners are and where the equity comes from).  The Shipyards was such a huge undertaking that even in the best of times when institutional capital was pondering tertiary markets like Knoxville, TN, it only attracted small local groups, one with no experience whatsoever.  Looking back, it was a fiasco waiting to happen and a crime the city even gave them any money.

You need a legitimate group like Forest City or some big insitutional fund to raise the kind of equity needed and to attract the right lenders (not to mention the experience with similar projects of similar scope).  Actually for something that big you probably need a team with aligned interests.  Not going to happen in Jacksonville, but don't tell City Hall that.  There are only a few groups involved with real estate that can take down $100s of millions of dollars for projects/acquisitions, and none have ever considered downtown Jacksonville as a place to invest.

The only smallish cities that have recently done projects as big are Salt Lake - City Center fully funded by the Mormon Church, and Nashville - Music City Convention Center, backed by the city, major fundraisers and the state of Tennessee.

The biggest projects in Miami about to be UC (Brickell City Centre) are funded by offshore institutional and perhaps even sovereign capital that doesn't even know what Jacksonville is.  The only other $500M++ project in the SE has been Atlantic Station in Atlanta, and it was AIG's first foray into real estate (we all know where they have gone since 2008).  AIG wouldn't consider Jacksonville; in fact now they are only doing stuff in Asia.

I bet the city could enlist a firm to create a master plan, set up a TIF program, and allow developers to carve out parcels for their own smaller scope projects as long as they comply with the master plan and TIF guidelines.

A mega-development makes no sense on the Shipyards site. It never made sense and thankfully it never really got started. Before anything gets carved out I hope the city completed a well-conceived master plan that looks not just at the potential of the Shipyards site, but what else the site can do. That site is super-important for the whole city and I think it has greater potential than anyone has given it credit for (even those who favored a glitzy mega-development).

[thelakelander]

+1000

[mtraininjax]

Is the City in the real estate business too?

They have enough challenges with remaining solvent, (cops, firemen, Jags, (insert fire here)) shouldn't they realize that a bird in the hand is better than two in the bush and get what they can now?

[Ocklawaha]

Companies looking at Jacksonville? Hell's Bell's Mr. Mayor, FINISH the Skyway to the Stadium and add streetcar to the Arena and you'd have to beat them off with a stick like you wuz a killin' snakes! (As my weird uncle Al would have said)

[Noone]

I don't think anyone really understands all the issues. 

I know I don't pretend to understand all the issues. But I do know that the Public Trust continues to be crushed in this community and the blow off of Intuition Ale Works is the biggest red flag and just speaks volumes in wanting to say DON'T VISIT JACKSONVILLE!

This city needs a Restroom Alert!

Restroom Alert was one of 5 presenters at the recent CoWorkJax fast pitch the other night Downtown and it's an attempt at humor on my part and not a dig at this company who has a fantastic idea. Our city has some serious bowel movements and the Intuition Ale response by the city should have us all texting an Alert for its citizens.

So is Bay Street Pier Park OUT!
Streetcar to stadium OUT!

Has anyone heard from the Riverkeeper? I'm a member.
Was there a meeting of The SJRA and did anyone go?
Was in Fernandina last night on their Waterfront at a gathering with some of the commissioners of FIND.
We are so LOST.

Will post more on another thread.

Shipyards/Landmar/Ale III. (We need another round over here!)

[Noone]

Who has the say for whether the city will take an offer on the Shipyards?   

Right now the city council has control on the Shipyards 2012-364. I have emailed the city council and the Mayor specifically about the Shipyards/Landmar/Ale Pier. Just the one Public Pier. The Governor is aware of the issue. It's still a local issue. It goes away with a new DIA.

The Public Trust continues to be completely destroyed in this community. Everyone see the front page story about Tony Nelson?

Was there a Board meeting of the SJRA last week? Anyone go?
Still waiting on a resolution from the Riverkeeper after telling a full house at an Urban Core CPAC meeting about this issue.
Did see and shared concerns with some of the commissioners of FIND last week in Fernandina.

Don't be afraid of this people. Florida leads the nation in PUBLIC corruption convictions from 2000 a 2010 according to U.S. Justice Department data. We are a joke.