San Marco Publix Site Plan and Renderings

[remc86007]

Are they worried about the units coming online at the same time as the Broadstone? I don't understand the constant delays. It seems like a profitable investment. Perhaps the developer is concerned that contractor costs are going to increase quickly as a result of the lack of workers and the heavy demand for construction around the city?

[thelakelander]

I can't imagine anyone being worried about Broadstone. That's a different product and construction type.  I suspect there are more profitble investment opportunities out there than putting a parking garage and multiple floors of residential on top of a Publix in Jacksonville, FL.

[thelakelander]

build the stinkin publix and be done with it

Pretty much.  If the numbers are too risky for this type of product at that location, it may be time to try something else. Perhaps, straight retail, straight residential or mixed use with retail and residential in completely separate buildings and without a significant sized parking garage, if possible. However, I guess the amount of money already invested in the site may be playing a significant role in the outcome.

[Bativac]

Straight from the article, "According to Jacksonville Council President Lori Boyer, who represents District 5, ArchCo Residential of Atlanta, primary developer of the project, "declined to move forward with the purchase," during its closing March 13." The developer just decided not to purchase the property but that was three weeks ago. Which means the constant reassurances that building is going to happen are just typical press releases  issued by the current owner, Regency Centers, trying to keep some kind of heat on the property.

I grew up around the corner from this plot of land and vividly remember the Bank, the florist, and the gas station that sat on or near the corner. I desperately want to see something go in there. ANYTHING at this point. I was still in college when the bank was torn down and the sign went up.

Numerous projects like this where there's a full tear down and then....nothing... are part of what convinced my wife and I to finally leave Jacksonville. I hope someone can get something happening on the site one of these days.

[jaxnyc79]

Is the issue a stacked mixed-use development at this particular location?  Given the success?? of the Riverside Avenue projects, perhaps not. 

Is it that the ground floor component is a grocery store?  Well, that model has worked very well in many other cities and is seen as a major source of convenience for residents; however, I've generally seen those projects include Whole Foods or Fresh Market or some other health and organically-centered grocer. 

Is the land-use intensity too extreme for this location?  I mean, the Square is pretty much a single-level strip of shops packed around a statuary, and much of the surrounding residential are single family homes with relatively sprawling lots for an in-town neighborhood.  But that shouldn't matter for future tenants - more an issue for existing neighborhood residents/homeowners.

Is there concern that the project won't pull enough of the flow of stacked-living enthusiasts from places like Gate Parkway, the Beaches, and perhaps Brooklyn?  It's only 200 or so units.

Is REIT Financing slackening? 

[Tacachale]

If it was a Publix only it would have been built years ago. I was once told that the problem is that there's too much invested in the property for a Publix to make a return by itself without the condos, and there's not enough space to include both Publix and residential and parking unless it's multi-story.

It sounds like it's the risk that got them this time. Mixed use projects like this have only come to Jax in the last few years, and there are still only a few examples to judge success by. It really sucks for those of us in the neighborhood. San Marco still qualifies as a food desert for lack of a grocery store.

[thelakelander]

Is the issue a stacked mixed-use development at this particular location?  Given the success?? of the Riverside Avenue projects, perhaps not.

There's only one development in Brooklyn with residential over retail. That's 220 Riverside and I'm pretty sure it recieved some tax breaks/incentives to make the numbers work. I don't believe East San Marco includes public subsidies and it's much more complex in that it includes a ton of more retail and a significantly sized multi-story parking structure.

Is it that the ground floor component is a grocery store?  Well, that model has worked very well in many other cities and is seen as a major source of convenience for residents; however, I've generally seen those projects include Whole Foods or Fresh Market or some other health and organically-centered grocer.

If it was a single level strip center without a parking garage, like Riverside's Publix, it would have been built a decade ago.  It's hard to compare this to other peer cities because most of our peer cities are far ahead of us in regards to urban infill development.  If the numbers are iffy in San Marco, they probably work in a similiar city like Nashville or Charlotte. Thus, if I'm investing with my own money, my priority would be the project that provides me with more return.

Is the land-use intensity too extreme for this location?  I mean, the Square is pretty much a single-level strip of shops packed around a statuary, and much of the surrounding residential are single family homes with relatively sprawling lots for an in-town neighborhood.  But that shouldn't matter for future tenants - more an issue for existing neighborhood residents/homeowners.

I don't know the details of this project, but I'm sure it deals with risks involved around financing.  Whatever, the number was, it appears the developer or whoever was providing them with financing, decided the terms of the current deal wasn't worth it.

Is there concern that the project won't pull enough of the flow of stacked-living enthusiasts from places like Gate Parkway, the Beaches, and perhaps Brooklyn?  It's only 200 or so units.

Is REIT Financing slackening?

I doubt any of these are reasons for the developer walking away from the deal that was on the table.

[thelakelander]

If it was a Publix only it would have been built years ago. I was once told that the problem is that there's too much invested in the property for a Publix to make a return by itself without the condos, and there's not enough space to include both Publix and residential and parking unless it's multi-story.

I can see this. This project is similiar to Berkman II in that both were started right before the 2000s real estate cash.  If the deal involves an attempt to try to recoup the initial investment from that era of crazy real estate values, then it's no surprise the numbers may not have worked out for the best, in the end.

[jaxnyc79]

Rates rising, higher ROIs demanded...new underwriting standards from the REIT partner issued...more project delays...
Not enough owners of capital taking a chance on Jax - is Jax so fundamentally different than a Charleston or Nashville or Greenville, where these projects appear to have worked
Perhaps an Urban Jax Infill REIT - with a special incentives partnership with the COJ and State - is this allowed?  is this in existence?  lol

[thelakelander]

If this project is trying to also recoup real estate bubble investment numbers, I'd argue this could be a special case.  Let's see how some of the other developments turn out before assuming East San Marco defines Jax's market.

[ProjectMaximus]

Is the land-use intensity too extreme for this location?

Or is it not intense enough? If they were allowed to add another 100 units would it be more feasible? The neighborhood certainly would have concerns but maybe all the delays are enough to get a higher density/higher construction approved...

[ProjectMaximus]

^Maybe a good project for fundrise?  Numbers might still not work though.

[vicupstate]

is Jax so fundamentally different than a Charleston or Nashville or Greenville, where these projects appear to have worked

I would say those other markets are dramatically different, especially the first two.

Interestingly a stand alone Bi-Lo in Midtown Charleston will be demolished and replaced with a multi-story mixed use project with a grocer on the ground floor.  The design is not out yet, but it sounds a lot like East San Marco.

I think one thing that hurts this project is that there is NO surface parking at all, IIRC. 

The Publix in DT Greenville has residential above it but does have 'quasi' surface parking, as you drive onto the top level of a two level garage to access the store.

Harris Teeter is about to start a project in Greenville in a neighborhood very close to DT. It has additional retail, apartments and a garage but they are separated from the grocer and there is some surface parking for HT as well.

http://www.crhrealestate.com/northpointe     

[thelakelander]

^Maybe a good project for fundrise?  Numbers might still not work though.

No way. If I were a fundrise investor, I'd want no part of it.  If the options were apples to apples, I'd rather risk my investment money on a similar project in NYC, Chicago, San Francisco or Miami.

[thelakelander]

Too bad there's no fixed rapid transit system serving the area.  This is a great example of a project where the numbers would work if they didn't have to build such a massive parking structure to accommodate the needed amount of retail and residential units.