Seven Decisions That Killed Downtown

[Wacca Pilatka]

We were overbuilt.  Its the reason that the Barnett was called Charlie's Dunce Cap.  There wasn't enough interest to fill the building and many assumed it was going to be a financial disaster.

Yes, I can see being overbuilt by the time the Barnett Center was completed. A good number of companies had already been acquired, disappeared or were on the verge of leaving DT altogether by then.

My recollection is that even though Barnett occupied something like 14 floors of the building, Barnett Center was not more than 60-65% occupied in the first few years after its opening.  And it actually had to be disclosed as a troubled asset on Barnett's financial statements due to the bank's partial ownership of the building.

[fieldafm]

Didn't First Union actually acquire Wachovia?

First Union bought Wachovia, yet assumed Wachovia's name/brand. 

[Wacca Pilatka]

Another "what might have been" thought on 1980s overbuilding and Stephen's point about the lack of investment in communications infrastructure downtown...

How different might both of these conditions have been had the Hazouri administration not delayed a commitment to a Skyway extension and the construction of Renaissance Place was greenlighted?

That is, if several more office towers had come online right before the recession and the series of Jacksonville-detrimental mergers and acquisitions hit, would that have incentivized the city to come up with better strategies to address an even more embarrassing vacancy rate?

Of course this opens up a penumbra of what-might-have-beens related to the cost and the TOD impact of an extended Skyway.  Or whether Wilma Southeast would have backed out of building Renaissance Place anyway, given that the writing was probably already on the wall for overbuilding (the Barnett vacancy situation Stephen referenced above, the fact that the AHL building and the Enterprise Center were scaled back from their original plans).

[thelakelander]

I'm familiar with the 1980s Jacksonville Plaza (pictured above) proposal for the block where the courthouse garage now stands. What was Renaissance Place?

[Wacca Pilatka]

^ Renaissance Place was a 1987 plan for that general area, covered at length in James Crooks' book about post-consolidation Jacksonville.  If I recall correctly, it was intended to include four office towers, a hotel, and a performing arts center and was billed as the Rockefeller Center of Jacksonville and a city within a city.  The developer was Wilma Southeast, an Atlanta subsidiary of a large Dutch company.  The new Hazouri administration seemingly hyped the project as part of the overall goal of a 24/7 downtown area, in synergy with the then-brand new Omni and Landing and some proposals for housing. 

Wilma's conditions for the project included construction of a Skyway extension to the stadium complex, with a stop at Renaissance Place.  However, the legislation authorizing Federal funding for the Skyway would not necessarily cover this extension and the city faced the risk of having to fund it without Federal or state support.  After two years of delayed negotiations, the Hazouri administration essentially settled on a promise that amounted to a soft maybe - the extension would be funded provided a certain level of Federal funding were obtained.  By then it was 1989, the softening of the office market was evident, and Wilma backed out.

I'm not sure whether this predated the Jacksonville Plaza you cited or whether they were differently scaled iterations of the same plan.  This is the first I've heard of Jacksonville Plaza, so I'd be thrilled to know more.

[Captain Zissou]

My family moved here in the middle of '86 so that my father could work at Baptist downtown.  At the time, I'm sure it looked like a real turnaround was happening and the city was on the brink of real growth.  The article above sounds very similar to something that could have been written in 2006-2007.  29 years later and very little has changed in the landscape. 

[Wacca Pilatka]

Did the St. Johns Center referenced in the article ever happen, and if so, what is that?  I can't think of what that would be as a 1988 project - it's not the Barnett Center or AHL/Jacksonville Center, the Florida National building was already complete as was the building that now houses SteinMart, the Alltel complex that's now Fidelity didn't come along until a few years later...

[Tacachale]

My family moved here in the middle of '86 so that my father could work at Baptist downtown.  At the time, I'm sure it looked like a real turnaround was happening and the city was on the brink of real growth.  The article above sounds very similar to something that could have been written in 2006-2007.  29 years later and very little has changed in the landscape.

I think most people just saw it as continuing decline, which had been happening since the 50s. That's definitely how my parents describe it. Even as the corporate presence grew (or at least held its own with the suburbs), retail and restaurants continued to die. Downtown, that is; the city as a whole has continued to grow.

This happened in every city that overbuilt in the 1980s.

We weren't "overbuilt" until we lost the companies using the spaces they had developed for themselves.

They simply leased out floors to other companies (the same thing that they are doing now actually) This wasn't a new strategy to fill a corporate HQ btw.  You could have built ten more towers to accommodate the information based businesses and call centers that dominated the new economy.  But the DDA simply didn't want or understand the needs of those new industries.  We didn't even have a usable T1 connection downtown except for Southern Bell and the City Hall when I moved next door in 1999.

Yes, we were not the only city to suffer from mergers. Such a point was never expressed in the article. In fact, the article provides no solution to the situation. It only highlights how much of the skyline was developed and how we ended up with a glut of empty office space in a relatively short period of time. Any strategy talk on how to fill that space would be a good follow up article itself.

The truth is that the city was too busy giving away 35 million dollars for "The Shipyards" to downtown messiahs like Ed Burr and similarly nonsensical projects (in retrospect) instead of investing in hi tech infrastructure that would have let it survive as a contender past the 1990s.  the southside did not make this mistake (and there weren't any blue ribbon panels operating on the ethos of the 1960s standing around blocking them from investing.

^This is literally every city in the country.

I think the article makes a good case for its thesis. The office infrastructure in Downtown Jacksonville was largely built by formerly significant companies that have mostly been bought out or relocated. I think you could go one further and say that the fact that all those purpose-built towers are already there made it more difficult for companies that wanted their own buildings designed their way. You'd either have to move into an older building designed for a different purpose, or risk build a new building in a market already oversaturated with vacant office space. I think that's one reason so many companies (St. Joe, Everbank HQ, FIS, Haskell) built on Riverside Ave in Brooklyn in the 90s and 00s. If you wanted your own building near downtown, that was pretty much the safest option.

[spuwho]

Jacksonville has probably been hurt by consolidation in the insurance and banking industry as much or more than any city.  Too bad some of those companies were not the acquirer instead of the one acquired.  Nothing to do in the wake of that but find new tenants and hopefully grow some new companies that will fill the old space and become the new pillars of business.

For decades Charlotte was the big winner in this aforementioned banking consolidation, but now there are legitimate fears that BofA will move it's HQ functions to NYC. Of course Wells is HQ'd in SF instead of Charlotte, although the Wells presence is still quite substantial.

My 2 cents.

Bank of America has a HQ in Charlotte in name only. The decisions and base of authority is clearly in NYC.  It shifted to NYC right after Ken Lewis was forced to resign. And even if he didn't, his heir apparent at one time, John Thain from Merrill Lynch had no intentions to move south.  The current CEO, Brian Moynahan lives in Boston (he came from Fleet Boston) and commutes to NYC 3-4 days a week.

I laugh when the Charlotte Biz Journal keeps asking Moynahan how much time he spends in Charlotte as the CEO.  He has an office in Hearst, (barely). He spends his time at BOAT (Bank of America Tower) in NYC.

As far as Jacksonville goes, lets face it, the Barnett's could have gone on for a great many years without having been bought out. It was well known that Nations Bank overpaid to get Barnett's Florida market share. So if you were a Barnett board member at the time, do you go for the big bucks of the Nations buyout, or do you bide your time and make the acquisitions yourself? With Nations overpaying for any bank that could breathe, they clearly panicked, went for the gold and cashed out.

Barnett had something that Nations could never acquire, a quality reputation. It was a major blunder by Barnett to sell and a reflection of the short term culture the US embraced. Atlanta based SunTrust resisted Chase and BAC by doing a stock poison pill using their largest depositor (Coca Cola Inc.) Hence they are still independent and have no interest in a merger with a NYC based bank. Barnett could have easily pulled off the same arrangement had they tried.

This evaporation of power is no stranger to other cities. The relaxed banking laws has had a huge impact on what used to be the 2nd largest banking city in the US, Chicago. JPMC has consolidated its footprint into NYC and Columbus, Ohio. Fortunately, Chicago has had a rise in replacements similar to EverBank. Lets hope that they don't forget how to build a franchise instead of falling for the first shiny nickel to come down the road.

[thelakelander]

I'm not sure whether this predated the Jacksonville Plaza you cited or whether they were differently scaled iterations of the same plan.  This is the first I've heard of Jacksonville Plaza, so I'd be thrilled to know more.

Jacksonville Plaza was a different proposed project. It was supposed to be built on the block bounded by Forsyth, Pearl, Clay and Adams Streets. Chase Properties of Birmingham was a part of the development team and it seemed like a go, when Mayor Godbold announced it in 1980. However, they were expecting to get a $3 million Urban Development Action Grant from the feds for building in an area deemed by HUD as a "pocket of poverty". I guess the grant money never materialized.



Anyway, the development was supposed to be twin towers. One tower was going to be a $17.5 million, 300-room Howard Johnson hotel....their first urban hotel of the 1980s. The other steel and glass tower was supposed to be a 500,000-square-foot office building. In addition, the development would have had an 800 space parking garage.

[I-10east]

IMO there was no way in the blazing hell the Jax was gonna keep those seven defunct companies, no matter what. The ball was already in motion, and there was nothing anyone in Jax could do to stop those companies defunct statuses or acquisitions.

Stuff like that went on all over the country (Philadelphia Savings Fund Society, Southeast Banking Corp from MIA, Woolworth etc); Those are just specks of sand from a sea of examples. Jax (and many other cities) is the beneficiary of acquisitions also (CSX, FNF and others). I don't agree with this 'something could've been done to stop what was already in motion, savings the defunct Jax HQ companies' logic. 

[I-10east]

^^^Explain...eh nevermind...

[thelakelander]

The article pretty much states in the opening paragraph that the events that led to these companies being erased from the skyline were beyond Jacksonville's control.

[I-10east]

^^^I think that those 'decisions' made were very commonplace in the US; Nothing outta the ordinary during those eras in US business history. 

[thelakelander]

^^^I think that those 'decisions' made were very commonplace in the US; Nothing outta the ordinary during those eras in US business history. 

I believe everyone pretty much agrees that there was nothing Jacksonville could do to keep Hurricane Andrew from ripping apart Miami and sending Independent Life down the tubes or the 1980s oil glut from sending Charter spiraling into bankruptcy.