Jacksonville investor on Downtown: 'They’re still in the Dark Ages'

[Cheshire Cat]

Silly article, Let's ask a sprawlville investor to talk about downtown. 

+1

[vicupstate]

Why criticize this guy for saying the same thing that everyone else says on this forum.  He is saying he would be foolish to invest in the core until the leadership of the city shows that they actually have a clue.  Can't argue with that.

The fact that the city is even considering cutting down the trees and taking out the benches in Hemming Plaza, or letting anyone and everyone build the most suburban designs imaginable in the core, and not lifting a finger to preserve historic buildings in the core or Springfield, is pretty damning evidence that the city leaders still don't have a clue as to what it takes to create an urban renaissance.     
   

Exactly Vic, he is doing what "everybody" else does!  Perhaps we have become too used to hearing these criticisms and allowing or agreeing with them without question.  I stated in my response to his post that we all well know the need for political change.  That however is a national problem and not exclusive to Jacksonville.  No news here, but when someone disses Jacksonville as in the dark ages without listing valid reasons or sharing a single idea to change what is "wrong" or offer any "solutions" to the perceived problems it's nothing more than casting dispersions without any desire to do the work to create change. 

I think we in Jacksonville need to stop the habit of so readily believing things will not and cannot change when so many, including a bunch of folks on this forum, are working so hard to better things.  If the person doing the criticizing will not buy into change or solutions, I frankly have no patience with their view about a lacking city.   Just my opinion.

He did list a reason: Weak leadership. And I think it is reasonable to infer a solution, 'change the leaders mindset or change the leaders'.   And from my take on it, he means LOCAL leadership.  Obama and even Rick Scott are not responsible for revitializing Jacksonville's Urban Core.  The mayor, the city council , the business community and grassroots leadership are. 

Let's stop being offended by those that point out the problems (killing the messenger), and start being offended by those that aren't FIXING the problems, when they are paid quite handsomely to fix them (ie the mayor and council for starters).  In my original post, I listed three examples of what has to change. 

Instead of bashing Mr. Gonzales, you should be thanking him for giving credibility to your collective cries of 'get a clue Jacksonville, you're stuck in the '80's and you need to wake up'. 

[Noone]

Please allow me a little venting.

I'm becoming increasingly disappointed in individuals like Gonzales, not intending to pick on him personally of course, but some of these fellows obviously have some cash, and the ability to borrow.  Unfortunately the comfortable fellows, with the money to engage investment, seem unwilling to take the urban core risk.  I find myself disappointed and even angered by the repeated decisions by investors and businesses to avoid the core...... to take the easy routes ....to remain unwilling to engage the challenge of the core. 

Risk is a valid factor to consider of course, but I sense that we’ve in our era, and our northeast Florida environment, too many comfortable fellows who seem to lack the balls and the vision to do anything but take the easy routes ... routes which stabilize with mediocrity in the suburbs .... when they could achieve high marks and make great changes if they would “initiate” a renaissance in the core instead of waiting for somebody else to do it.  Get a vision and take a little risk fellows.

Although there are some bold and innovative investors and movers and shakers in northeast Florida, our area seems to be infected with too many comfortable and moneyed fellows who have no balls, vision, or desire to make Jacksonville what it could and should be.

I feel better now.   

   

 

Ron, How would you like to see the Northbank Urban Core from the St. Johns River our American Heritage River a FEDERAL Initiative and when we are paddling by Berkman and the Shipyards III in as much as I would then like to get out at the new Riverwalk connection at Bay St.and then buy you a round at Mark's you are NOT ALLOWED. Instead we will continue to paddle on to a real dead zone.

I feel better now.

[Cheshire Cat]

Vic, I understand what you are saying about leadership and I have acknowledged that on this thread more than once, but this is not news.  We are all painfully aware of our lack luster leadership and there are many who are working to change that. If we were not, perhaps his "inferred solution" would have meant something, but he is just stating the obvious and the citizens are well aware of this issue.  We can simply agree to disagree about the message being needed or a reinforcement of already established views regarding our shortcomings.  At this point I don't see the repeated dissing of Jacksonville as a solution to anything but rather reinforcing the inclination of some to simply throw up their hands in disgust and give up on our city.  I also don't feel as though commenting on the mans views is "bashing" him.  lol  I guess it's okay for him to "bash" Jacksonville and we are to remain mute if we don't agree, is that it?    I find nothing in this mans views to thank him for as he is simply repeating the same negative statements others before him have proclaimed.  I am not saying he does not have that right however his views are not a "revelation" and just more negative noise in my opinion.  This has nothing to do with "killing the messenger" as he has not delivered any news, he has just tendered an opinion as I am stating mine. 

Vic, I looked for your original post with the three suggestions you said you made and don't see it.  Was it on this thread?
 

[JayBird]

^in the midst of a brewing storm, always seek the calm an collected one to keep you on point +100

[Tacachale]

"Shooting the messages" means someone delivered a message. That didn't happen here. His comments could mean anything- perhaps he means that the leadership should be more effective in creating the downtown environment so many of us want, but perhaps he means they should create an environment like suburban office parks, which is his actual focus. Those comments just disparage downtown without adding any insight. But of course folks are willing to accept any negative comment about downtown as unarguable truth even when there's zero content to it.

[spuwho]

I am familiar with someone who attempted to "go downtown", this was someone who had a history of office park turnarounds and he wanted to "go urban".

He made an effort to acquire a downtown property..but the lending environment for downtown Jax was toxic. Many of the lenders in the market didn't want to be exposed to this part of the city. 

I can't speak for the lenders, but they need confidence that a developer can generate the required cash flow to support the project. This maybe why someone like  Mr. Kahn had to help back the Laura Trio project.

So it maybe easy to jump on Mr. Gonzales initially, but his lenders may be reluctant to work with him on downtown projects due to the poor leadership politically.

Lenders want reduced risk. Instead of COJ subsidizing projects to reduce the risk, some firmer civic planning would probably go a long way to help.

[Tacachale]

Yes, perhaps he has a great point. However we'll never know because he didn't say what it was. Perhaps he's someone who'll never be comfortable investing in the downtown environment.

[vicupstate]

The fact that the city is even considering cutting down the trees and taking out the benches in Hemming Plaza (1) , or letting anyone and everyone build the most suburban designs imaginable in the core(2), and not lifting a finger to preserve historic buildings in the core or Springfield(3)

This is the part of my earlier post (on this thread) that I was referring to, Cheshire Cat.  [ I added the numbering in this post, though]

Basically, if Mr. Gonzales had posted his comment on this website, we would all be in agreement with him, that the leadership sucks.  But because he said it to a reporter, he is to be shunned.  Given the fact that he is a DEVELOPER, he brings credibility to our common refrain, IMO. 

That said, I DO understand that when someone says something negative about the place you live, it brings a reflexive response to  dismiss the commenter.  But  remember, this is his home too.  So he must feel very strongly, to be so candid and negative.

I think it behooves us to weigh his comments on their MERIT, and put aside the 'hurt' that the truth often brings.

I think a follow-up interview is a great idea Stephen.

[InnerCityPressure]

perhaps we should do a follow up interview.

Excellent idea.

Not it.

[Cheshire Cat]

The fact that the city is even considering cutting down the trees and taking out the benches in Hemming Plaza (1) , or letting anyone and everyone build the most suburban designs imaginable in the core(2), and not lifting a finger to preserve historic buildings in the core or Springfield(3)

This is the part of my earlier post (on this thread) that I was referring to, Cheshire Cat.  [ I added the numbering in this post, though]

Basically, if Mr. Gonzales had posted his comment on this website, we would all be in agreement with him, that the leadership sucks.  But because he said it to a reporter, he is to be shunned.  Given the fact that he is a DEVELOPER, he brings credibility to our common refrain, IMO. 

That said, I DO understand that when someone says something negative about the place you live, it brings a reflexive response to  dismiss the commenter.  But  remember, this is his home too.  So he must feel very strongly, to be so candid and negative.

I think it behooves us to weigh his comments on their MERIT, and put aside the 'hurt' that the truth often brings.

I think a follow-up interview is a great idea Stephen.

Vic you will get no argument from me that the items you listed, tree's, park furniture etc are indeed egregious and this is largely a function of leadership who in turn participates and allows for these types of foolish and destructive ideas and actions.  If I am not mistaken, each and every issue you mentioned has been a topic of considered discussion on this board and at city hall.  These are your insights and not those of the developer quoted in this article however.   

Let me assure you had he made the same statement on this forum, I would have had the same response.  Lets not engage in statements that would attempt to claim  Mr. Gonzalez is being "shunned" for his opinions.  Responses to his comments that are not in agreement with them are not tantamount to shunning the man for heaven sakes! lol  Let me also state that my comments are not a result of "hurt" feelings about this particular statement but rather about taking this opportunity to say that continually focusing on what is lacking or wrong in our city is a view out of balance.   Things are not all good but neither are they all bad and this is true for the city and the urban core.  To announce the urban core as being in the "dark ages" is to deny and ignore the positive steps being taken for improvement in the core, as well as the attention and commitment to better things happening downtown like "One Spark", sale of the old library etc!  I really think it is a reach to say on this forum that people are not willing to look at what is holding us back in this city or are sensitive to criticism, in fact the opposite is true.  This forum, its readers and citizens like myself have had a laser focus on what needs to be addressed be it politics, planning, transportation or policy. 

Clearly Mr. Gonzalez is content to develop in the suburbs and let others take the risks downtown as is his choice.  I have always personally held that you don't get to "complain" about something if you are unwilling to do something yourself to change it.  I feel the same way about politics and folks "moaning" about outcomes, many of them not even bothering to vote or campaign for competent, forward thinking political candidates.
Actually it is the inclination to call the core bad without at the same time pointing to any of the positive there that is in my opinion an overworked knee jerk response. In many ways a statement that "shuns" downtown and it's potential. IMO

It would be interesting to know if Gonzales has any ideas or specific suggestions to better our core or to deal with poor leadership.  I know I would be more than willing to listen to those suggestions. 

[Tacachale]

The fact that the city is even considering cutting down the trees and taking out the benches in Hemming Plaza (1) , or letting anyone and everyone build the most suburban designs imaginable in the core(2), and not lifting a finger to preserve historic buildings in the core or Springfield(3)

This is the part of my earlier post (on this thread) that I was referring to, Cheshire Cat.  [ I added the numbering in this post, though]

Basically, if Mr. Gonzales had posted his comment on this website, we would all be in agreement with him, that the leadership sucks.  But because he said it to a reporter, he is to be shunned.  Given the fact that he is a DEVELOPER, he brings credibility to our common refrain, IMO. 

That said, I DO understand that when someone says something negative about the place you live, it brings a reflexive response to  dismiss the commenter.  But  remember, this is his home too.  So he must feel very strongly, to be so candid and negative.

I think it behooves us to weigh his comments on their MERIT, and put aside the 'hurt' that the truth often brings.

I think a follow-up interview is a great idea Stephen.

Dude, that's exactly the problem. There's no "MERIT" to his comment because he didn't say anything. That statement is nothing but handwaving.

[JeffreyS]

I think for investors they want to see what we talk about with fixed transit over rubber wheels.  A firm set of rules that people can count on, lenders can count on and they know that the next investor can count on. You want to know what is going on and how the area you are investing in will be managed.

Sprawlville investor isn't going downtown he seems irrelevant. I hate that we have wasted time arguing over someone who barely stated the obvious.

[simms3]

People, tough stuff that's hard to hear, but likely true.  Stephen - interview him!

Most people think of developers as exclusively this or that.  Not true, though most do have some sort of focus, whether it's a submarket, region, product, or maybe they are a preferred interest or mezzanine debt only in all their deals and it's more of how they invest.

My own firm is a dream firm for any city like Jax to come in and do something, and people often only think of my firm as owning trophy office buildings and doing great redevelopments of warehouses and street retail.  However, we actually own a suburban lot entitled for multifamily in either southern Duval or northern SJC (Nocatee...we're sitting on it).  Within the firm I have worked on a portfolio of suburban shopping centers in S FL we owned as the LP with Weingarten and I worked on a ground up garden style multifamily deal in the fringes of Cary, NC.  We have an industrial park we are building in Charleston and land deals that are still sitting for master-planned development like you wouldn't believe.

It all comes down to the money.  Everything we have in the SE or as land to be developed is in opportunity funds, of which we have raised 5 in total.  Financing for projects in these funds is different (and we are a great sponsor, so we have some of the best access to the capital markets, whether it's securitized, construction, etc), and these two latest opportunity funds were closed in 2008 at the worst possible time back when more folks were doing more of these (so money raised in '06-'08).  Literally everyone got burned, even in larger markets.  Jax is traditionally one of the top 5 or 10 risky top 50 markets in the country across any and all product types...this is no secret.

Aside from Prudential playing safe with garden style apartments on the SS or Regency going for their 5-6% yield on the newest Publix SC on a fully developed corner on the SS, most folks need a super ridiculous return to justify Jax, especially areas that aren't the core of the SS (i.e. DT or elsewhere).  There simply aren't enough deals or opportunities to make this return in the city for the kinds of developments we want because the job growth isn't happening DT and leadership and public vision is sorely lacking.  It's happening on the SS, allowing the life companies and REITs who do gamble on the market to make their lower stabilized yield and a few developers to make their fees.

Along with everyone else just about, we've gone exclusively core/core plus, which means no development, focus on office/retail, and 70% of everything we buy in terms of asset value has to be in either NYC, Boston, DC or SF.  Many REITs with a similar or lower cost of capital as us and a different platform have gone from doing deals in top 40 or top 50 markets to basically just top 10 or top 20, picking and choosing a few special markets.  Jacksonville simply doesn't have the boxes in general to check to bring the kind of capital from outside of the city (like Austin and Charlotte do).

220 Riverside is an all equity deal.  The major source is MAA out of Memphis, which was just acquired by an Inland REIT entity (or vice versa).  It already has suburban Jax pegged as a target market and it already has like 7 or 13 apartment deals there.  It's a SE focused REIT, along with Colonial.  There aren't many more, especially on the office side (a couple of office REITs will dabble in Atlanta, Miami, Houston, Charlotte, Austin and Dallas, but even these markets aren't typically core enough).

The other source is Hallmark, which is one of the only developers local to Jax with significant credible experience in doing more complex deals such as urban infill, and it has access to capital.

Maybe Khan finds Jax a Tony Giarratana (Nashville's resident big money developer who partners in literally everything - I worked on a deal there where he was a very small partner).  Charlotte has big family name developers who do everything from suburban office to downtown office/mixed-use, and they have access to life company equity and debt, similar to folks in Atlanta.  Jax simply doesn't have these local developers, but unfortunately the chance of seeing one pop up soon aren't great, and remember, Khan himself is not a developer - he probably just wants to find one soon, and he probably realizes he needs to try to work with other local leaders above the noise of elected leaders to get anything done!

[tufsu1]

It is clear that getting lender financing in downtown Jax is pretty tough....but all its going to take is one major success (perhaps 220 or Barnett Bank) to change that