O.K. Seriously....why isn't there a taco bell downtown?

[simms3]

^^^It's almost *never* feasible to develop for people who can't pay market rate.  This is a huge issue in San Francisco.  The crazy leftist population here is trying to demand that developers build 100% affordable housing, but that's just not how it works, especially when land alone costs ~$200K+/unit.

Building below market rate (BMR) housing, whether for rent or as condos, requires public assistance and a whole different structure to get it done.

Unfortunately, there are very few if any buildings of scale downtown that can be converted to lofts/cheaper housing, on the cheap.  Most buildings need A LOT of work are difficult buildings to work with, to begin with (Laura Trio for instance...horribly inefficient and falling apart).

The more people that see this, and the more that leaders wake up to reality and how it works for private sector deal underwriters, the more "work" we can do downtown to get people living there.  The other huge component would be jobs.  There doesn't appear to be any actual job growth downtown, perhaps there is actually contraction instead.  We are seeing that in Pittsburgh, and a few other markets we don't really want to touch if we don't already have exposure in them.

Jax doesn't have jobs contraction overall, obviously, but if downtown itself does, then it loses the most important thing going for it.

[Adam White]

I always thought a smart thing would be for the city to develop shared ownership housing downtown. I don't know if that's a thing in the USA, but it's where the person buying the property purchases a percentage of the property and pays rent on the remaining amount (which I believe is - or was - relatively low). They run a lot of these schemes for so-called "key workers" - teachers, nurses, police officers, firefighters, etc. This allows people to get on the property ladder - and helps redevelop areas that need it.

Riverside had a tough stretch in the 80s, but it managed to become a success story because people like artists, musicians and students moved there when rents were cheap and made it the kind of place that had character. The kind of place people want to see Downtown.

One of the problems with downtown is that all the buildings that could be rented out for cheap and turned into artists' lofts keep being torn down. So you're left with expensive new developments or parking lots.

[simms3]

^^^But explain to me these buildings that can be rented out for cheap and turned into "artists' lofts".  Which buildings are you referring to?  Define "cheap".

[Adam White]

^^^But explain to me these buildings that can be rented out for cheap and turned into "artists' lofts".  Which buildings are you referring to?  Define "cheap".

My point is that Jax has a history of tearing down buildings that are unoccupied. It would seem make sense to rent out those properties at below-the-market rates in order to encourage people to live there rather than just tear down the buildings and leaving a foundation. I could be totally wrong about this. I've had friends who lived in less salubrious parts of NYC in the 80s and 90s and rented out unfinished spaces that they sectioned up into rooms and made an apartment out of. And they got these spaces for cheap. If you can do it in NYC, surely you can do it in Jax?

[simms3]

I have known people to squat in NYC and kind of make their own home.  I have known places like LIC to be filled with artists, but it's also so gritty looking, still, that some people in Jax (especially those opposed to billboards and signs over businesses) would literally have a heart attack just drivng through to get to the Midtown Tunnel.  That's a place where the buildings are actually still structurally sound and in better shape than many of the buildings in Jax, and it's LIC, not desirable parts of Manhattan down the street from Burberry or a JPM office (and this is *rapidly* changing).  I have worked for a firm that invested in LIC and found an old building to rent out to urban industrial groups, super cheap office space relative to Manhattan, which was the thesis.

If you're referring to big lofts in lower Manhattan or in Harlem, yea, for a short while some may have been rented out to artists for cheaper than market rate in then desirable neighborhoods.  You won't find those anymore, and all those buildings were and are basically ready to be occupied.  Buildings in Jax are often in TERRIBLE condition and are uninhabitable.  Also, there are only a few buildings in Jax, and they are all quite visible.  Not exactly what we need for squatters.

I don't think "if you can do it in NYC" is fully applicable to little Jacksonville (little being the key word).

[Adam White]

I have known people to squat in NYC and kind of make their own home.  I have known places like LIC to be filled with artists, but it's also so gritty looking, still, that some people in Jax (especially those opposed to billboards and signs over businesses) would literally have a heart attack just drivng through to get to the Midtown Tunnel.  That's a place where the buildings are actually still structurally sound and in better shape than many of the buildings in Jax, and it's LIC, not desirable parts of Manhattan down the street from Burberry or a JPM office (and this is *rapidly* changing).  I have worked for a firm that invested in LIC and found an old building to rent out to urban industrial groups, super cheap office space relative to Manhattan, which was the thesis.

If you're referring to big lofts in lower Manhattan or in Harlem, yea, for a short while some may have been rented out to artists for cheaper than market rate in then desirable neighborhoods.  You won't find those anymore, and all those buildings were and are basically ready to be occupied.  Buildings in Jax are often in TERRIBLE condition and are uninhabitable.  Also, there are only a few buildings in Jax, and they are all quite visible.  Not exactly what we need for squatters.

I don't think "if you can do it in NYC" is fully applicable to little Jacksonville (little being the key word).

I had friends in Williamsburg in the 90s. You can't afford it anymore, but back then they had what was basically a big garage that they sectioned up into rooms. Back in the 80s it was (comparatively)  cheap to live in lower Manhattan.

I'm not too clear on what Jax's building stock is like - I moved away over 8 years ago. But my point overall was that - based on the stuff I've read on Metro Jacksonville - we've torn down so many buildings over the past 20 years or so. While I'd imagine many of those weren't in great shape (or fit to be habitable), they can't all have been that bad.

In any event - you can't just skip forward to a fully-developed neighborhood with a thriving nightlife and cafe culture. It takes those wilderness years where those willing to deal with the lack of amenities, etc move into the area and slowly breathe live into it and make it cool or exciting or whatever.

[vicupstate]

One of the problems with downtown is that all the buildings that could be rented out for cheap and turned into artists' lofts keep being torn down. So you're left with expensive new developments or parking lots.

Exactly. Which is why the few buildings still left need to remain.

^^^But explain to me these buildings that can be rented out for cheap and turned into "artists' lofts".  Which buildings are you referring to?  Define "cheap".

Elena Flats comes right to mind, but any older vacant building in DT or Springfield would certainly be on the list of potentials.

In any event - you can't just skip forward to a fully-developed neighborhood with a thriving nightlife and cafe culture. It takes those wilderness years where those willing to deal with the lack of amenities, etc move into the area and slowly breathe live into it and make it cool or exciting or whatever.

+1000.  And that is why JAX is getting nowhere.  It wants to walk before it even crawls.  Forget pie in the sky Shipyard proposals that will never happen.  Get the Laura Trio done and save Elena Flats and other similar  properties. 

[MusicMan]

Quote from Mtrain: "Its obvious as hell that no one wants to live downtown."


That is not true. Metropolitan Lofts, 11E, The Carling are all full to capacity. Berkman sales are brisk and have recovered nicely from 2009-1010, even the funky Churchwell Lofts are moving pretty well. If there was another building downtown with similar units available right now I believe it would fill up quickly.  Pretty sure The Strand is near capacity. Many people who move here from other cities want to live downtown, not in the 'Burbs. They just don't have many choices right now. And many young people/professionals want to live downtown as well, they don't want yards and neighborhood associations to deal with.

[simms3]

In any event - you can't just skip forward to a fully-developed neighborhood with a thriving nightlife and cafe culture. It takes those wilderness years where those willing to deal with the lack of amenities, etc move into the area and slowly breathe live into it and make it cool or exciting or whatever.

+1000.  And that is why JAX is getting nowhere.  It wants to walk before it even crawls.  Forget pie in the sky Shipyard proposals that will never happen.  Get the Laura Trio done and save Elena Flats and other similar  properties. 

Unfortunately, the reality is that Laura Trio, while on a different scale and with a different "face", is about as pie in the sky as the Shipyards.  With enough demand, there are more developers who know how to put up well done new construction, easily.  There are very few developers who actually know what they're doing with really old buildings such as the Laura Trio.  Add to that the fact the Laura Trio itself is not built for today's uses.  Meaning, it needs A LOT of work just to be brought up to code, but it also needs complex additions just to get a floorplate that accomodates today's code and space needs for [insert use/tenant here].  That is absolutely not cheap and can't be "value-engineered".

Williamsburg in Brooklyn was mentioned by Adam White, as was Long Island City, by me, as places with a lot of old "no frills" buildings that could be converted to artists' lofts or cheap housing/creative office space/light industrial.  Even today under insane demand/rent pressures and widescale changes, these two areas remain those kinds of places in New York City.  Jax doesn't really have any equivalents.  It has a few sporadic buildings that are probably in good enough shape to house a use or some renters/"artists" for dirt cheap.  The Laura Trio is not one of these buildings, and unfortunately, Jacksonville landlords and the City of Jacksonville have not only torn down or allowed to be torn down too much of the building stock, but a lot of what remains is truly on the verge of needing to be torn down.  There will come a point of no return for some buildings - whereby they cannot feasibly be retrofitted or restored to a new use, if there is no urgency to get stuff done.  And the amount of money to get some of the more important buildings done (Laura Trio, likely Barnett Bank building too, and of course the little guys like Bostwick and Marble Bank) means that the only thing that can justify the funds spent is some upper market use (i.e. a fancy steakhouse, or market rent yuppie renters, a hotel chain like Marriott/Courtyard, etc etc).

The city needs to understand this and decide if it wants these buildings restored, or not.  Because to restore them is going to require city funds.  A lot of city funds.  The private sector will not be able to underwrite doing anything to these buildings without that huge leap by the city.

[simms3]

Quote from Mtrain: "Its obvious as hell that no one wants to live downtown."


That is not true. Metropolitan Lofts, 11E, The Carling are all full to capacity. Berkman sales are brisk and have recovered nicely from 2009-1010, even the funky Churchwell Lofts are moving pretty well. If there was another building downtown with similar units available right now I believe it would fill up quickly.  Pretty sure The Strand is near capacity. Many people who move here from other cities want to live downtown, not in the 'Burbs. They just don't have many choices right now. And many young people/professionals want to live downtown as well, they don't want yards and neighborhood associations to deal with.

In most markets, there are no better experts than the real estate community, particularly investment managers.  If they aren't plunking $$$ down to build apartments in the city, then there is some underlying reason why.  We've seen some money recently come into the city that could be part of a diversification strategy, or because those firms are bullish on the urban core of the city - remains to be seen.  There isn't much of a price differential on land/unit between downtown and well-located SS parcels, nor is there a difference in construction costs.  So it could be more of a macro bet on the market with a tint towards downtown optimism for a longer term hold.  We'll know for sure if there is a burgeoning demand from young people to live in the city if 220 Riverside and the other one lease up quickly at ask.

If not, there is either a lack of people who can pay those rents (which means there is a lack of high paying jobs...and while we know that to be the case relative to some cities, we know there are high paying jobs in Jax with certain rental rates achieved out by SJTC that have broken area records), or it means there really is not much demand.

Just consider that even with Strand and 220 Riverside, asking rents in Jacksonville are now a solid 20-30%+ below what similar developments are asking in Nashville and Charlotte.

The smaller 1 BR plan at 220 Riverside is asking $1170/mo for 701 sf for a 12 month lease, which is about $1.66/sf.  Easily would be $2.25+ in Charlotte, Atlanta, or Nashville.  Probably $1.85+ in Birmingham if you can believe it.  More I'm sure in Orlando/Tampa (though I don't know those markets at all).  Easily close to $3/sf in Austin, and probably ~$7-8/sf in San Francisco (well it would be a 701 sf 2 bedroom for $6.50/sf )

[vicupstate]

Unfortunately, the reality is that Laura Trio, while on a different scale and with a different "face", is about as pie in the sky as the Shipyards.

Color me skeptical to say the least.  What is wrong with what Steve Atkins proposed as far as uses? The buildings are gutted to the exterior walls are they not?  What would be the 'code violation' in a total gutted building?

Will it need incentives?  Of course, that is a given, but nothing compared to what the Shipyards will require ($35mm just for remediation and you KNOW that is just the beginning).  There are Historic Tax Credits available for the Trio that would not be available for Shipyards or any new construction as well. 

The problem is the city has no money and without that, the deal simply doesn't work. Put the same buildings/situation in any other city and it would happen.  It is not the buildings themselves or their specific location that is the problem.  Lack of demand for offices and residential does make things more complicated but that would apply to Shipyards too, only more so. 

[simms3]

^^^Relativity is what is important here.  Incentives as a percentage of the capital stack of the deal?  Much much higher for Laura St Trio.  And I don't consider the city spending $35M to clean up its own land before the private sector can come in and develop it "incentives".  It's just necessary procedure that should have been done as soon as the Shipyards were closed.

In terms of code, I'm sure Lakelander, who is an architect by trade and knows those buildings, has an idea of the kind of work necessary to obtain a certificate of occupancy.  But beyond that, I don't think there's much feasibility, if any at all, to just restore the present day floorplate.  It could potentially be incrementally cheaper per square foot to add new construction to these buildings to expand the floorplates and increase the range of uses, which makes not doing that absolutely moronic.  Not to mention, bathroom cores/stairwells/elevators and fire access are all different under today's codes than they were 100 years ago when these buildings were built.

The difficulty is not only restoring the buildings as they are, but in going with the wise (and potentially necessary) choice to expand the floorplates with add-ons, one cannot fuck up the design and integration of mixing styles and eras.  There are relatively few people in this entire country who have the appropriate taste and expertise to do that at all, let alone well.  It generally requires high quality materials and a more old world craftsmanship of construction, both of which you won't find easily in cheaper Sunbelt markets like Jax (and neither is inexpensive).

[vicupstate]

^^ There have been many 1920's era buildings restored to productive use, including in the SE.  11E. and The Carling being two. The SF of either of those buildings probably exceeds the three Trio buildings combined. Again the buildings are gutted.  How can a bathroom be non-compliant with ADA, if it no long exists?  Are you not free to build to whatever specifications required within the exterior walls?  Can you not building a new stairwell/elevator core adjacent to the new buildings. I believe that is in fact what was planned.

The remediation is still $35mm no matter what you call it. It is money the city will have to front and doesn't have.   

[simms3]

11 East and the Carling were not in as bad a shape as the Laura Trio, and their floorplates were far more conducive to strict rehab without any new additions or major modifications.

In terms of compliance, no you cannot just build a bathroom as you see fit.  Besides the obvious ADA compliance (which changes about every 2 years and has likely changed several times over just in the time there has been a proposal to rehab the Trio), there are riser issues and capacity issues that are treated no differently than ADA in the eyes of local/state code.  That's just the bathrooms.  Then there is code for fire access up and inhabitant access down.  Then there are specifications for elevators.  Then there is trying to fit all this in an efficient manner in those tiny, inefficient buildings while leaving enough space to generate an income stream by selling/renting space to third party(s).

Speaking of, in a hotel or rental/condo configuration, you then have to create "stacks" of floorplans, each with its own bathroom/kitchen/utility infrastructure.  If you are talking to a certain hotel or trying to get an operator for some boutique, they will have their own thoughts on what kind of room configurations work.  The rental market in DT Jax, particularly at Carling and 11 East, has proven to be difficult, at best.  And those buildings were easier!

My whole point is that this is one very complex endeavor, even if small by most standards.  It is made easier when the endeavor is made a little larger by expanding the floorplates of these buildings (the cost to rehab core and shell of existing structure on a per square foot basis is so great that you'd need serious record record rents to make a return that justifies the risk...and getting those rents is a major part of that risk!).

My other point, following from that, is that it may actually be cheaper, per square foot, to tack on new construction to the existing structures, even if you do it well with quality materials/design.  In that case, it makes NO sense to NOT do that, but it requires a bigger equity check (and it would appear nobody has the equity check to even do just one of these things).

I could go on, but I'm tired.


RE: $35M cost to city to remediate (or in clearer and actually more accurate terms, "clean up") city-owned land along the waterfront that could be developed in the future and potentially generate huge tax earnings if the city doesn't give all that away in incentives, is totally separate from actual incentives for one specific project or a "specific plan" as may be adopted for the Shipyards.

Separate bucket.  Separate responsibility.

So the city doesn't have money.  Welcome to the world of all cities/taxing jurisdictions.  Even cities that do have money to go around must still make choices about priority.  Or decisions to raise or lower taxes.  Jax has all of these options at its disposal.

In an absolute perfect world, a private developer would come in and clean up the land and develop it, and pay the city's ridiculous fees and "legal bribes" and grease palms and make everyone happy and give in to most if not all demands, etc etc.  When and where does this happen, ever?  San Francisco right now.  Not San Francisco 5 years ago.  It really almost never happens anywhere, and will never ever be the case in Jacksonville.  Get used to the city having to pay to clean up its own land and give incentives away to both attract companies for relocations and to get developments off the ground.  Right now the economy is good.  Strike while the iron is hot!  If not done now or within a year or two, it certainly won't get done in the next down cycle when shit hits the fan.

[mtraininjax]

That is not true. Metropolitan Lofts, 11E, The Carling are all full to capacity. Berkman sales are brisk and have recovered nicely from 2009-1010, even the funky Churchwell Lofts are moving pretty well. If there was another building downtown with similar units available right now I believe it would fill up quickly.  Pretty sure The Strand is near capacity. Many people who move here from other cities want to live downtown, not in the 'Burbs. They just don't have many choices right now. And many young people/professionals want to live downtown as well, they don't want yards and neighborhood associations to deal with.

You are fooling yourself if you think there are enough choices for downtown living to entice people to live there as compared to elsewhere in Jacksonville. Just not enough options for them. The last new downtown project was during the Peyton era. The fact that Brown has tried to use an annual event (OneSpark) some smoke and mirrors and a few parties to drive more development is not lost on me or others.

For the same $$$ you can live closer to destination places. No one comes to Jacksonville and says "Hey the action is downtown, I want to live there." Not even young people can be lured with smoke and mirrors these days. I give 'em more credit than being sucked in by a man who offers them a party once a year and then turns them to turn into donkeys.