Khan: Downtown's Laura Street Trio redevelopment deal 'alive but on life support

[thelakelander]

This is another project that will need a portion of that $9 million council wants to take away. None of them work without incentives to fill in the financing gaps. Our DT hasn't reached that level of vibrancy yet.

[ronchamblin]

This is another project that will need a portion of that $9 million council wants to take away. None of them work without incentives to fill in the financing gaps. Our DT hasn't reached that level of vibrancy yet.

"... that level of vibrancy..".  You've broached the idea of the "threshold".  How viable is that idea?

We've been stuck in a pre-threshold environment for decades....its called stagnation.  Achieving the threshold will force conditions more favorable for businesses and residents desiring entry into the core.  In fact, we can probably assume that a post-threshold environment will mean that many will begin to "compete" for entry into the core.... simply because there will be an energy level in the core upon which they can depend.... as if riding upon it. 

The problem is that there has been no vision, no strong leadership, no educating the council members or their constituents, and therefore no sacrifice, hard work, or action to force progress to the much needed threshold which, if achieved, will remove most of the risk for businesses and residents desiring entry into the core.

Most investors have taken the easy, short term, path to profits, which has meant.."the suburbs", not realizing that the achievement of high core vibrancy and infill will greatly benefit the entire northeast Florida area. 

As politicking and profiteering increases, true leadership decreases..... and the bullshit show goes on.

[JFman00]

A great story of how the catalyst for the turnaround of downtown Cleveland almost single-handedly thanks to one family: How One Family Made Cleveland (Yes, Cleveland) Cool

Developers were reluctant to invest in urban residential and mixed-use projects in an unproven market. An urban development in a distressed area is a significantly more complicated, expensive, and time-consuming endeavor than planting a subdivision in open space. "It took us eight years just to buy all the property, and we got no returns for that period of time," Maron says. It helped that MRN wasn't beholden to preconceptions about how to make money in real estate. Its leadership consisted of Maron, a trained violinist; his dad, a contractor; and his brother, an accountant.

Urban projects also require a lot of cooperation with city hall, to make sure they are integrated with existing infrastructure and comply with city laws. The 16 buildings on East Fourth had 250 owners crowded onto their land-leases. MRN managed to acquire 80 percent of the property, but to free up abandoned or extremely neglected buildings, the city had to exercise eminent domain. Realizing Maron's vision required working with the city to waive parking-ratio requirements and to make sure fire trucks could still access a street closed to vehicular traffic.

Financing the project was even more complicated. "What we call 'baklava financing' has been the way we've approached urban projects," Maron says, referring to the Mediterranean layered pastry. Federal and state historic tax credits provided a layer of funding for every apartment building, restaurant, or entertainment venue. Cleveland Development Advisers, a subsidiary of the regional chamber of commerce, provided loans and New Markets tax credits.

MRN was forced to get creative. Restaurateurs were wary of taking a chance on a largely abandoned area, so MRN opened its own Mexican restaurant, Irish pub, and bowling alley. "We're in the hotel business, and the restaurant business—things that, at the time, we were forced to do because it was the only way for us to prove that there was a market for this kind of product," Maron says.

But each project got easier to finance. The 224 apartments filled up almost as fast as MRN could build them. Crowds gathered at East Fourth's entertainment venues, attracting new businesses and new investment. Today, tenants include Chef Jonathon Sawyer, whose Greenhouse Tavern was named one of the 10 best new restaurants in America by Bon Appetit. Rents on East Fourth have gone up 60 percent in the last decade, Maron says, and restaurant retail sales are double what MRN first expected. "As the market continues to grow, there's less and less need for the baklava financing," Maron says.

CoJ either needs to pick a winner or get out of the way.

[ProjectMaximus]

Really glad to see something coming, but the delay clearly had to do with changing the plans. What happened to the student housing component, which was sort intriguing of all! And the possibility of a pharmacy would have been great. Obviously all the residential has been wiped out as well.

Still, that can come in the future, as long as we have adaptive reuse and additional infill I'm stoked.

[kbhanson3]

Most investors have taken the easy, short term, path to profits, which has meant.."the suburbs", not realizing that the achievement of high core vibrancy and infill will greatly benefit the entire northeast Florida area.

I think the point you made there, which I completely agree with, is that at this point in time Downtown needs "benefactor" investors - patient money that is more purpose driven than return driven.  Does Jacksonville have enough deep-pocketed local investors with a passion for Downtown?  I believe that "benefactor" projects would go much further to advancing Downtown in the early stages of revitalization than any government incentivized project could, although that element is essential too.  The Trio project is dependent on New Markets Tax Credits to help make the numbers pencil. But we can't count on the availability of incentives/tax credits lasting forever. And frankly, Downtown will not be "revitalized" from a real estate investment standpoint until they are no longer needed to make projects economically viable.

[thelakelander]

A great story of how the catalyst for the turnaround of downtown Cleveland almost single-handedly thanks to one family: How One Family Made Cleveland (Yes, Cleveland) Cool

I met Ari Maron at the Vanguard Conference. A few of the events were hosted at their 4th Street and Uptown developments.  Cleveland helped facilitate what they were trying to do.  Historically, we've been more of a stumbling block for private development.

Take note of this paragraph:

Cleveland's urban revival has required leadership at every level. Business owners voluntarily raised their taxes to fund special improvement districts. Cleveland State University built space for nearly 1,200 additional dorm beds downtown. A Transportation Department grant helped fund a bus rapid-transit line between the business district and the university, hospital, and arts district. City hall modified building codes to encourage historic preservation and created new walkable neighborhood zoning.

There's little political opposition, in large part because gentrification isn't an issue. "No one's being displaced," Hill says. Downtown, in University Circle, and along the lakefront, new developments are replacing vacant office space, empty warehouses, and parking lots.

This makes a world of difference between the haves and the have nots.

[thelakelander]

Most investors have taken the easy, short term, path to profits, which has meant.."the suburbs", not realizing that the achievement of high core vibrancy and infill will greatly benefit the entire northeast Florida area.

I don't blame them. In general, investors are investing to make money instead of losing it trying to achieve risky feel good stories. Most aren't headed to the burbs.  It's not like our burbs are booming these days either. Instead, they take their money out of town and invest in other areas across the globe that are safer bets.  We can turn things around but it's not going to happen until we can be trusted to take leadership in investing in downtown and truly facilitating development instead of pulling the rug from under it or throwing grenades in its way.

[ronchamblin]

Most investors have taken the easy, short term, path to profits, which has meant.."the suburbs", not realizing that the achievement of high core vibrancy and infill will greatly benefit the entire northeast Florida area.

I think the point you made there, which I completely agree with, is that at this point in time Downtown needs "benefactor" investors - patient money that is more purpose driven than return driven.  Does Jacksonville have enough deep-pocketed local investors with a passion for Downtown?  I believe that "benefactor" projects would go much further to advancing Downtown in the early stages of revitalization than any government incentivized project could, although that element is essential too.  The Trio project is dependent on New Markets Tax Credits to help make the numbers pencil. But we can't count on the availability of incentives/tax credits lasting forever. And frankly, Downtown will not be "revitalized" from a real estate investment standpoint until they are no longer needed to make projects economically viable.

Good terms that I must remember... "benefactor" investors .... "purpose driven" than return driven.

"Downtown will not be "revitalized" from a real estate investment standpoint until they (incentives/tax credits) are no longer needed to make projects economically viable."

Right on!  There will be no need for lasting incentives and tax credits simply because a post-threshold condition will finally exist, wherein there will exist a momentum, a buzz, an excitement that downtown "finally" is producing its own energy... as if a fire, to which one has been giving labor to ignite, has finally burst into flames.... thus allowing the heat energy to do, without further assistance, the work only a fire can do.

Most investors have taken the easy, short term, path to profits, which has meant.."the suburbs", not realizing that the achievement of high core vibrancy and infill will greatly benefit the entire northeast Florida area.

I don't blame them. In general, investors are investing to make money instead of losing it trying to achieve risky feel good stories. Most aren't headed to the burbs.  It's not like our burbs are booming these days either. Instead, they take their money out of town and invest in other areas across the globe that are safer bets.  We can turn things around but it's not going to happen until we can be trusted to take leadership in investing in downtown and truly facilitating development instead of pulling the rug from under it or throwing grenades in its way.

Absolutely.  Leadership is a "key" requirement.  The mayor, the city council, and others in positions of influence can, if they can see past politics and attempt to educate their constituents as the huge gain for "their" neighborhoods once full vibrancy in the core is achieved.... there can be great moves toward the goals, as the usual roadblocks and wasted energy can be eliminated. 

Nothing will happen until strong leadership, with vision, exists.  And that's why the next elections are so important.  The problem with elections however is that it's difficult to separate those who say anything to get elected from those who actually speak what we might call the truth..... a rare thing in America.  It's called the forked tongue disease, which can be cured with a combination of vitamins containing integrity, honesty, sacrifice, and vision.   

[I-10east]

www.jacksonville.com/business/real-estate/2013-08-17/story/hotel-restaurants-bank-planned-historic-laura-street-trio

[river4340]

It'd be a great thing for downtown if it happens. I hate to use the cliche of "the thing that pushes it ..." but it could be a great stimulus for more activity.

[ronchamblin]

Any completed projects in the trio and the Barnett building will certainly be a boon for the area. 

My work on the 225 Laura Building is not yet started because GUS & Company will not be out of the building for several more weeks, and because I've been tied up on other projects.  GUS is moving to a spot on the south side of Adams street, I think west of Julia..... closer to the courthouse.   

BTW, the six apartments planned for the two upper floors of the 225 Laura building (GUS's) are already spoken for... already rented when completed.  Seems that everybody wants to have a view over the park, and near a restaurant, which will be located just below in the current GUS & Company location.   

In any case,  let's hope the renovation work on the trio will begin before I complete the renovation of the 225 building, which should be finished in 2015.

It would be nice to have more of the "little" buildings in the area, buildings such as the 225 Laura, so that more of the average Joe's without megabucks could "do" more renovation projects.  There is not much left on Laura.... buildings small enough for a worker-bee type of person to renovate. 

Of course, there is the building occupied by Magnificat, and the adjacent one around the corner, behind Magnificat, both having the same owners..... who, I believe, live out of town.  But then, these two buildings are being, for the most part, occupied, and are not in desperate need of renovation.  I think the two buildings were left by Blanch Pavles (sp), to two of her sons.  Being a long time customer and friend, she once said that she would consider selling one or both to me, but she passed away about three years ago.  I think too, that her sons own one of the buildings on the north side of Adams, between Laura and Hogan. 

Must be nice to be "left" real estate.... basically for free.  But, as some might say, its better to work for what you have, so that it's more appreciated.

[I-10east]

Marriott approves hotel franchise for the Trio.

www.bizjournals.com/jacksonville/news/2013/09/13/marriott-approves-hotel-franchise-for.html

[ben says]

Marriott approves hotel franchise for the Trio.

www.bizjournals.com/jacksonville/news/2013/09/13/marriott-approves-hotel-franchise-for.html

Fantastic news.

[edjax]

Now we sit back and watch our city leaders screw it up.

[thelakelander]

Here's the press release:

Marriott International Approves Laura Trio Hotel

Jacksonville, Fla – Following the release of the proposed redevelopment plans for the Laura Street Trio in downtown Jacksonville by SouthEast Group on August 19th, Marriott International, Inc., today announced its formal approval of the developer's franchise for the 131-key hotel to be operated under the company's Courtyard by Marriott flag. In a letter addressed to SouthEast Group principal and managing director Steve Atkins, Marriott conveyed its Development Committee's approval and scheduled execution of operational and trademark licensing.

Upon completion of the redevelopment, the new hotel will establish singular brand representation of the Marriott
hospitality system in downtown Jacksonville. The new hotel will be one of the exclusive adaptive reuse, historically-themed products featured by Marriott in select markets around the country. Similarly styled hotels have become downtown hotspots in Boston, Philadelphia, San Diego, Seattle, Tulsa, Cincinnati, Washington D.C., Denver and Miami.

While distinct from the typical Courtyard model, this select service product also takes advantage of the Marriott Rewards Program. The exclusive offering by Marriott has nearly 40 million members worldwide and is the largest program of its kind in the hospitality industry, allowing users to earn and redeem points at any of 14 distinctive brands and over 3,700 hotels in 70 countries and territories. The Rewards network is particularly popular with today's business traveler, making Marriott the leader in that market category. In addition, Courtyard by Marriott is now the official hotel of the NFL, providing additional opportunities to link downtown's Sports District to the city's core with pre-game and post-game events, as well as off-season programming throughout the year.

"This can be a game-changer for downtown Jacksonville" said developer Steve Atkins. "The relationship with Marriott is the key to making this redevelopment successful. The Trio can be transformative for the Central Business District. Having the biggest name in the hospitality industry located in the epicenter of Jacksonville is a major piece of the puzzle, now it's time for the City to embrace the opportunity and be bold in its support of the project," Atkins added. "Great cities invest in themselves by creating dynamic urban environments that foster activity. Here is a chance for Jacksonville to become a greater city."

With an overall project scope of around $40MM, the developers are seeking participation with the city through publicprivate-partnership. Groundbreaking is scheduled for early 2014, with a grand opening in late 2016.

SouthEast is a commercial real estate development firm based in Jacksonville, Florida, providing a full complement of
development services, capital management and general contracting performance across the southeastern region of the United States. The company specializes in integrated design-build services, new construction, preservation and
development consultation programming, with a focus on sustainable construction and redevelopment.

SouthEast is licensed for operations as a Certified General Contractor in the states of Florida, Georgia, Alabama,
Mississippi, North and South Carolina and has been qualified for operations in Tennessee and Kentucky. Specializing in design-build construction methodology, company principals have more than 80 years of industry experience and a resume of more than $500 million dollars in total development volume throughout the region.