Laura Street Trio in Trouble? Updated status of six key Downtown projects

[tpot]

Problem is, from what I can see the city has no vision or plan that it is actively pursuing or promoting for downtown revitalization.........there are multiple projects being talked about in different parts of the city but no plan to implement or connect them.......

[tpot]

The last plan I can recall for JAX was Better Jacksonville........why would an investor want to invest into a downtown with no plan for improvement....especially a downtown that is a disaster......

[Glue182]

Agreed, there's a lot that's needed.  But I don't think you get there without it.

And more importantly, the project steps through an open door into a different model of finance that doesn't depend on Jacksonville to invest heavily into a project.  Because of 30 years of development and planning, the Jville money is betting on sprawl and that is where it is invested.  They literally see no reason for them to spend money in the core.  This is something that you can ask Alex Coley about in fact. Or the Hardens (who built Everbank Plaza and have a place in the Olympian heights of the Peninsula)

So while no one project is going to restore downtown, building instead of demolishing is a good step.  Outside financing (which is exponentially larger than local) is a good step, and firms with experience building urban density is a good step.

There are a few people who object to the Developer because he doesn't already have their millions in the bank and therefore doesn't 'deserve' to have access to this kind of project with this kind of financing.  It kind of pisses them off that one of the crabs is crawling out of the box, I suspect.  But other than 'Who is he?' it bears noting that no real criticism has been levelled.  Just the impudence of not belonging to the hot girls clique at private school.

So, there are millionaires in Jacksonville who don't want this to proceed because they don't like "Atkins"?  That seems very small town to me.  Are these some of the critical people (WIJG) here?  Have they offered to invest in this project? Are they competitors?

[tufsu1]

The last plan I can recall for JAX was Better Jacksonville........why would an investor want to invest into a downtown with no plan for improvement....especially a downtown that is a disaster......

the Better Jacksonville Plan was a list of projects that would be built if voters passed a local sales tax. 

As for downtown plans, here is the history following Better Jacksonville

http://www.coj.net/departments/downtown-investment-authority/downtown-development.aspx

And earlier this year, the downtown CRA and associated Business Investment & Development Plan were passed

http://www.floridaplanning.org/wp-content/uploads/2015/05/3-Document-2_CRA-Plans.pdf

http://www.coj.net/departments/downtown-investment-authority/docs/20150202_bid-plan.aspx
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[heights unknown]

Thanks heights unknown!

You're welcome Stephen!!!

[heights unknown]

Hello to All - I've read for a long time but am new to posting this forum.  I'm not sure if all these comments come from people who are "in the know", but it seems like there are personal agendas here.  I for one am very interested in seeing the Barnett and Laura Street Trio redeveloped, and I went to the meeting at DIA last week and listened to the plans very carefully.  I will say that I was quite impressed with what is being proposed from the developer team.

Atkins and his team seem to have a firm grip on this project and the investment they are proposing is a substantial one.  The City would be wise to make the proposed public investment as this would revolutionize the center of downtown.  One of the previous comments suggested that Atkins shouldn't be involved.  That seems like a ridiculous statement as the man owns the property.  I happen to know a surgeon that operates out of a facility that Atkins developed and owned years ago. He swears by the guy and says he's the best landlord that he's ever had.  Aside from that, the folks he is working with, contractors, architects, etc. are all names that say success.  Seems like that is the real deal.

For as long as those buildings have sat vacant in the middle of downtown and based on the condition that they are in, we should all probably be very supportive of anyone willing to make it happen, especially with the tenants that are signed-up (Chase, Marriott, the Marble Bank restaurant). If those type of companies are on-board, then the plan must be solid.

Why do we continually tear down the stuff we keep saying we need and the people trying to make it happen.  Seems to me that is what has held our city back. Set personal agendas aside and let's get it done.  If not this, then what?? I haven't seen anyone else step-up. I say thanks Mr. Atkins!

My sentiments exactly; well said my Friend, and I agree; thanks for attending the meeting and intently listening and seeing whether 2 + 2 does indeed equal 4 for all parties.

[CCMjax]

If this project ever gets started and or completed, it's going to take a lot more than this single project to turn downtown JAX around.....this is a start but it's wrong to think that this project will fix all that is wrong with the core of downtown JAX....

I agree but I don't think anyone in this thread has suggested that this project alone will solve all of downtown's issues.  It is the fact that there will be no start to a renaissance without this project happening.  And tearing them down will only yield negative criticism of a backwards thinking city, demolition will not lead to new buildings going up in their place.

[CCMjax]

The last plan I can recall for JAX was Better Jacksonville........why would an investor want to invest into a downtown with no plan for improvement....especially a downtown that is a disaster......

They may start looking in Jax (and many already have) when equivalent properties in places like Miami are 10 times what you can get in Jax.  Not saying Jax is the same city as Miami, in fact it is extremely different, and right now that may be a good thing for someone making an investment here. 

Another thing, downtown Jax isn't exactly a disaster in my book . . . . go to Gary, Indiana or Flint, Michigan and you will see downtown economic disaster zones.  Jax actually has the infrastructure and buildings in place in the core of downtown (centered around the Barnett, Trio and Hemming Park), it just needs these buildings to be brought back to life.  DT at least has activity at certain times, it is just not 24/7 because there aren't enough people living or staying down there outside of weekday business hours.

[CCMjax]

Actually, I take that back about Flint.  They have done a decent job recovering from a disastrous last couple decades.  Gary on the other hand is still pretty awful.

[RattlerGator]

But the point, CCMjax, is still valid -- downtown Jacksonville isn't a disaster.

However, let me try my question again because there seems to be a determined insistence to not address the particular elephant I'm interested in:  If this type of package is not unheard of and actually a pretty good deal for a major revitalization spark project for a city the size of Jacksonville -- why are these outside entities taking what seems to me the extraordinary step of requiring city mandated investment before they will even CONSIDER evaluating their real involvement? It seems exceedingly convenient to blame the inability of the project to come together on the supposed layers of incompetent bureaucracy within the City of Jacksonville or on a cadre of disinterested local power elite or on Atkins not belonging to the correct clique.

All of those takes are conveniently subjective (IMHO) and they don't address the objective requirement. I admit my curiosity may arise completely from my freely admitted naiveté on this type of development project -- but can someone show something similar occurring in some other municipality? Or, conversely, has this type of thing blown up in a city's face?

I'm not skeptical about the merits of the project, I'm just more curious than anything else.

[thelakelander]

But the point, CCMjax, is still valid -- downtown Jacksonville isn't a disaster.

However, let me try my question again because there seems to be a determined insistence to not address the particular elephant I'm interested in:  If this type of package is not unheard of and actually a pretty good deal for a major revitalization spark project for a city the size of Jacksonville -- why are these outside entities taking what seems to me the extraordinary step of requiring city mandated investment before they will even CONSIDER evaluating their real involvement? It seems exceedingly convenient to blame the inability of the project to come together on the supposed layers of incompetent bureaucracy within the City of Jacksonville or on a cadre of disinterested local power elite or on Atkins not belonging to the correct clique.

All of those takes are conveniently subjective (IMHO) and they don't address the objective requirement. I admit my curiosity may arise completely from my freely admitted naiveté on this type of development project -- but can someone show something similar occurring in some other municipality? Or, conversely, has this type of thing blown up in a city's face?

I'm not skeptical about the merits of the project, I'm just more curious than anything else.

Giving big incentives to launch catalyst projects (especially when utilizing large old buildings) are pretty common in second rate cities attempting to breathe life back into their morbid downtowns. In the 1990s, Lakeland gave empty city-owned buildings away for something like $1 to lure companies like Publix to shift some of their corporate office departments to downtown.

Florida Trend - April 1, 1995

Downtown Lakeland readies for an influx of new workers, while the region's rural counties struggle to create new jobs.

Unemployment remains stubbornly high in much of South Central Florida, but from industrialized Lakeland to the farmland of Hardee, Okeechobee and counties in between, there's a new determination to capitalize on the area's natural resources and geographic location.

In Lakeland, it hasn't been easy to jump-start development in the city's core business district, with its hodgepodge of low-rise office, retail and industrial buildings. But this year and next, two local businesses will take the lead. Watkins Motor Lines and Publix Super Markets are renovating a total of 260,000 square feet of commercial space and bringing 850 jobs downtown.

What convinced the businesses to make the move? Free rent. Both Watkins and Publix are moving into buildings donated, by Burdines and J.C. Penney, to the Lakeland Downtown Development Authority (LDDA) in exchange for tax credits. The LDDA, desperate for downtown activity, offered Watkins and Publix 20-year leases at $1 a year.

Since the Watkins and Publix announcements, other businesses have followed with commitments to the city. ...

https://www.highbeam.com/doc/1G1-17001348.html

Lakeland also had an early 20th century hotel in similar condition to the Trio. Back in 1998, that city ended up selling the vacant 10-story building for 50% less than what they paid for it. They also allowed the developer to lease 40 spaces in a nearby parking garage for $35 month.

https://news.google.com/newspapers?nid=1346&dat=19960510&id=laZNAAAAIBAJ&sjid=qvwDAAAAIBAJ&pg=5301,6886261&hl=en


A decade ago, Detroit gave big money to get the long abandoned Book Cadillac hotel renovated into a Westin. Here's how that deal broke down:

How the Book Cadillac deal stacks up

Financing for renovation and rehabilitation of the Book Cadillac Hotel pending closing:

Loans:
iStar Financial Inc. first mortgage - $ 48.0 million
Section 108 HUD Loan- $ 18.0 million (includes $8.25 million Michigan Magnet Fund loan/New Markets Tax credits)
Detroit General Retirement System - $9.0 million
Downtown Development Authority (includes $1 million Wayne County grant)
Development Loan - $5.8 million
Remediation Loan - $6.7 million
MSHDA/State Loan - $6.0 million
National City New Markets Tax credits loan* - $1.0 million
National City Bank condo construction loan - $6.0 million
Lower Woodward Housing Fund Gap Loan - $2.5 million
Total: $103 million

Tax Credits:
State of Michigan Historic Tax Credits - $4.6 million (includes Shorebank bridge loan)
Federal Historic tax credits - $ 20.0 million
Single Business/Brownfield tax credits – Hotel: $7.4 million, Condos: $1.1 million
Total: $ 33.1 million

Equity:
Developer equity - $15.0 million (includes $12.5 million loan from First Independence National Bank)
Conservation easement equity (National City Community Development Corp.) - $ 28.0 million

Total: $43.0 million

Grand total: $179.1 million

*Converts to equity
Note: Additional funds totaling $4.7 million are available if needed from iStar ($2 million); National City New Markets ($1.7 million); and Maget Loan Fund ($1 million).

Sources: Detroit Economic Growth Corp.; Book Cadillac development agreement; Crain research.

http://www.crainsdetroit.com/article/20060612/SUB/60609029/one-for-the-book

Orlando gave a couple million in tax breaks and incentives to get a project with an urban Publix off the ground in the midst of the 2000s urban real estate boom:

"A full-service grocery store is one of the last pieces of the puzzle in making downtown the 24-hour city we all envision," he said.

David Eichenblatt, an Atlanta developer who is wrapping up the conversion of the former Four Points by Sheraton Hotel to condominiums, said the introduction of a downtown grocery store is a big deal.

Stan Gerberer, an associate with Fishkind & Associates, an Orlando-based economic consulting firm, said that a grocery chain's interest in building downtown means that the industry is recognizing downtown's worth.

After all, it costs at least twice as much to build a store in a downtown than it does in the suburbs because of land costs and infrastructure.

"If the volume isn't there, they could see huge losses," he said. "Absolutely, it's a milestone for downtown Orlando."

While the name of the grocery was treated as an open secret when developer Kevin Lawler, with a newly formed Tampa development partnership, made a presentation Wednesday afternoon to the Community Redevelopment Agency Advisory Board, Lawler repeatedly said a 29,000-square-foot grocery store is central to the plan.

CRA board members repeatedly called it a Publix while Lawler, with Thornton Park Partners, said that he is obligated to keep the name secret for now.

If it is approved by the City Council, the $75 million project -- dubbed the Thornton Park project -- would be built at the corner of Central Boulevard and Lake Avenue.

It will also have about 312 residential units and about 5,000 square feet of retail space and about 3,000 feet of office space -- as well as underground parking for residents and shoppers.

The project got the approval of the CRA, including about $3.7 million in incentives and tax breaks, which will go before the City Council in mid-November.

http://articles.orlandosentinel.com/2004-10-28/news/0410280235_1_downtown-grocery-mayor-buddy-dyer-downtown-orlando

Philly implemented one of the most forward looking public sector incentives packages 15 years ago. Their 10-year city-wide tax abatement program immediately resulted in a 263% increase in new construction in the early 2000s.

http://www.biaofphiladelphia.com/ufiles/abatement_report.pdf

I could go on, but you should be able to get the gist. You have to pay to play when you're the ugly duckling wanting Grade A type developments that are too risky for private money. The key to these type of deals is to make sure that the money being invested stimulates a ROI that's more than just seeing this particular block of old buildings restored.

[vicupstate]

It would be harder, by far, to find a city that DIDN'T incentivize the first major project or two that got the ball rolling.

I would remind everyone that the money involved is less than HALF of what the city paid in incentives to get the The Carling rehabbed.  Ditto for the 11 E. building. Also, that is after a DECADE of construction inflation. 

This deal involves FOUR buildings, five if you count the new garage, versus only one with those other deals.       

[CCMjax]

It would be harder, by far, to find a city that DIDN'T incentivize the first major project or two that got the ball rolling.

I would remind everyone that the money involved is less than HALF of what the city paid in incentives to get the The Carling rehabbed.  Ditto for the 11 E. building. Also, that is after a DECADE of construction inflation. 

This deal involves FOUR buildings, five if you count the new garage, versus only one with those other deals.       

And how much did the city give Khan for the stadium upgrades?  Wasn't it more than half the total cost?  They sure did jump on that pretty quickly, and you can't even tell what they upgraded with that $60 million until you get all the way into the stadium and see the world's largest D-E-F-E-N-S-E displayed across the sky and glance over and see small pools floating in space at one far end of the stadium.  The rest of the stadium still looks lost in the mid-90's.

RG - The point is, the city can come up with the money if they really think it is worth it, which it is 110%.  People need to realize this is an investment for the city as well, not just the developers.  This is not going to be a totally private endeavor.  We need to stop thinking a developer is going to waltz into a city with a struggling downtown and magically offer to throw 100% of their own money at a project like this with higher than average risk just because he or she really wants to see the downtown succeed . . . . it ain't gonna happen.  Not now, not 5 years from now, not 10 years from now, it's not how large developers work.  They are asking for incentives to potentially cover the risk and always do in situations like this, nothing earth shattering or shady about the concept.  The developers are willing to cover 80 to 90% of the cost without city money, the city should jump on this opportunity if everything checks out.  Everybody knows this project has to happen in order for downtown to really take a leap, it's just a matter of how and when.

[thelakelander]

Hard to compare apples to apples. The city owns the stadium and has a revenue source dedicated for such improvements. It does not own the Trio and Barnett buildings and there is no revenue source directly set aside for their restoration. With that said, I also agree that the money can be found if the deal is determined to be worth the risks.

[thelakelander]

Inside the dilapidated buildings that developers see filling a big hole in Downtown

By David Chapman, Staff Writer

There's a hole in the middle of the Barnett Bank building.
Seventeen holes, actually. One right after the next, starting on the second floor up to the 18th. The alignment creates an almost hypnotizing pattern for those who peer upward through the historic Downtown building.

The holes weren't for show, though. They had purpose for a former developer. Instead of piping out debris through windows, the thought was to push it down the holes and have it come crashing down into a pile.

The idea worked. The plan for the building didn't. It was scrapped, another stop in a series of starts.

When developer Steve Atkins bought the building and the neighboring Laura Street Trio, the debris collected from all the floors above was still there.

"He was chest deep in it," said Lisa Goodrich, director of marketing and community engagement for Atkins' development team, SouthEast Group.

But instead of keeping the holes and putting an elevator in their place, Atkins wants to fill them in and save the space. Much like he does the trio of buildings across Laura Street.

"Most people previously only saw value in the Barnett," said Goodrich. "For the Trio, it was 'tear them down and put up a parking garage.'"

Saving all four buildings was Atkins' driving motivation, she said.

Full article: http://www.jaxdailyrecord.com/showstory.php?Story_id=546577