Berkman II: Ideas floated for blighted building

[thelakelander]

Gaffney said the Jacksonville Downtown Investment Authority is already in discussions with Atlanta-based Choate Construction Co., which was the original contractor for the building and now owns the structure.

Choate essentially is a de facto owner of the Berkman Plaza II property after the original owner, a condominium development firm, foreclosed on the property in 2014.

Choate Chief Operating Officer Michael Hampton said the company is a general contractor and does not want to own properties.

In fact, the Berkman Plaza II site is the only property the company owns. Choate's desire to get rid of the property, worth an estimated $12.4 million, was evident when the company put it up for auction shortly after assuming ownership in 2014.

There were no takers.

"That's why a construction company ended up owning that property," Hampton said in a phone interview Thursday. "What we've been trying to do is find a developer, and we've been working with a developer who's trying to create an opportunity to finish the building.

"Unfortunately, they have not been able to make the economics of that work out to where the project could be restarted," Hampton said.

Choate was contacted by the city of Jacksonville in October to clean up the site, clear out weeds and reduce some of the overgrowth prior to the Florida-Georgia football game at EverBank Field. Hampton said Choate obliged and provided maintenance work prior to the college game.

Meanwhile, Hampton said Choate continues negotiations with Cocke Finkelstein Inc., an apartment development firm in Atlanta, for a possible plan to finish the building. He said Choate is trying to balance that with ongoing and increasing concerns about the Bay Street property and deterioration of the site.

"I don't know that there's anything Choate can do," Hampton said. "All I know is we have a developer who is trying to work out a way to finish the project. And if they were able to do that, then we would be their contractor."

Full article: http://jacksonville.com/news/metro/2016-02-20/story/ideas-floated-blighted-building-jacksonville-downtown-riverfront

[whyisjohngalt]

I assumed the owners were being fined daily so we don't end up with another Bostwick situation.
Something needs to be done now.

[strider]

It actually says in the article that the property is not being fined.  It can't be until it is a case heard in front of the Special Magistrate.  Even then it not an automatic fine.

While the city does often put rolling fines on property, for the most part, they recognize those fines and the actions of the Municipal Code Compliance Department do little good for the residents of the city.

In rare instances, the rolling fines do allow things to progress, like in the case of the Bostwick building where the property was foreclosed on by the city and then sold.  But as everyone can see when they drive by, it was way too late to truly save the building and we now get nothing but most of an old facade. In this case, still a good thing.  But what the Bostwick and just about every single case of rolling fines illustrates is that first the process from MCCD contaminates a property and makes if far less desirable. And creates an atmosphere around the property that all but guarantees that it will sit and rot for years to come. Then if the property is lucky enough to end up with new owners wishing to restore the structure, the rolling fines generate some small amount of the cost of the process back to the city but far from all the costs. MCCD is actually one of the more wasteful departments the city has.

There needs to be a better system but then MCCD would loss some of their power over the residents of Jacksonville.  In the case of structures like Berkman II owned by larger corporations, even MCCD recognizes the futility of rolling fines and so works with the owners to get a resolution to the problems rather than trying to use their usual bulling tactics.  That is a good thing because we are far more likely to get a positive resolution this way.

[jaxjags]

Interesting that the article states that Choate and the developer cannot make the economics work, yet Riverside 200 is progressing. Number of units is similar(190 versus 209 +/-, although I think as apartments the number of units was supposed to be higher in Berkman II). Is this the difference between the cost of steel/concrete high rise versus mid rise wood structure? Does the retail portion of 200 Riverside change the economics of that project? I know the high rise must have a central HVAC and more elevators, but does that impact rental rates substantially? Maybe it's demand. If I worked in the core, I would prefer Berkman, but if I worked outside of DT I think I would prefer Brooklyn. Just not sure I understand why the difference in the economics.

[thelakelander]

Is this the difference between the cost of steel/concrete high rise versus mid rise wood structure?

^Yes.

[MusicMan]

Cutting through all the BS, there are two choices.

1. Finish it as condos, apartments, or hotel.  (Or all 3?).

2. Tear it down.

The current owner can only go so long before one choice tops the other.

[coredumped]

I assume the land is free of contaminants or they wouldn't have been able to work on it in the first place
If that's the case, why can't they sell such a prime piece of property? Does it now cost more to demo it or finish it than it would do a building from scratch?

[thelakelander]

That's a pretty small site and if you're going to go vertical, using concrete and steel, it cost more to demo and rebuild from scratch. There's a reason we don't have any highrises going up.  They aren't feasible in our market right now. One of the benefits of Berkman II is that there's something like 20 stories of structure already in place.  If they are still struggling with numbers, it further validates that the market can't support highrise construction right now.  I wonder what the financial gap is. For all we know, it could be in the same ballpark as paying to demolish a structure that size.

[coredumped]

Thanks Lake, that makes sense. So as far as you know, the existing structure is in good shape?

[thelakelander]

Thanks Lake, that makes sense. So as far as you know, the existing structure is in good shape?

They claim it's in good shape structurally. It's basically concrete and steel.

[heights unknown]

That's a pretty small site and if you're going to go vertical, using concrete and steel, it cost more to demo and rebuild from scratch. There's a reason we don't have any highrises going up.  They aren't feasible in our market right now. One of the benefits of Berkman II is that there's something like 20 stories of structure already in place.  If they are still struggling with numbers, it further validates that the market can't support highrise construction right now.  I wonder what the financial gap is. For all we know, it could be in the same ballpark as paying to demolish a structure that size.

(Heights clearing his throat)....I think, Lakelander, in all due respect, that your post should read "THEY AREN'T FEASIBLE IN THE JACKSONVILLE MARKET RIGHT NOW." Other major Florida cities have high rises in the construction and planning stages moving forward and of course upward; so, something needs to be done, by those leaders in Jax government, to ignite the local market so that "HIGH RISES WILL BE FEASIBLE IN THE JACKSONVILLE MARKET."

[thelakelander]

Yes, when I mentioned "our market", I was referring to Jax specifically.  Florida's other major cities aren't suffering from some of our issues, in regards to downtown revitalization.

[I-10east]

http://www.news4jax.com/news/local/jacksonville/berkman-ii-building-still-sore-spot-for-city

[Houseboat Mike]

http://www.news4jax.com/news/local/jacksonville/berkman-ii-building-still-sore-spot-for-city

City Councilman Reggie Gaffney, who represents the area, said it's one of the biggest complaints he receives from people in the area. He wants something done now.

"I can tell you this: I am beyond being frustrated to the point that I am going to be talking to the mayor's office to see if I can introduce some type of legislation or ordnance to deal with blighted projects downtown," Gaffney said.

hmm...great idea, legislation to deal with blight. If only we had a department that dealt with that. Oh wait....

[Downtown Osprey]

8 years it's been sitting there? 8 years?!!! That is completely embarrassing for our city.