JEA hunt for headquarters site is silent on evacuation risk

[Kerry]

The Kings Ave station isn't bad at all.  Connected to free mass transit and free parking across the street.  For employees there are plenty of lunch options and easy freeway access.  For contractors and consultants there are two hotels right next door.

[KenFSU]

Going into last month, Kings Avenue was considered third to the other two proposals.

They think, or at least thought, the property might be too small and claustrophic with the highway.

What's interesting is that JEA is quietly looking to sell $50-$100 million in real estate holdings to finance their new headquarters.

I'm curious as to what this might mean.

The financial details of the three proposals aren't public, but wouldn't this figure suggest outright ownership, rather than leasing space from Cordish?

Who knows, maybe calmer heads will prevail.

[Charles Hunter]

Wouldn't the financial details be available through a Sunshine public documents request?

[KenFSU]

Wouldn't the financial details be available through a Sunshine public documents request?

JEA's procurement code has a clause regarding ex parte communication that allows them to keep proprietary/financing details under lock and key.

In theory, it's not a terrible thing, as it allows JEA to evaluate each proposal based on its merits alone without the three firms tearing each other to pieces, and also forbids any back-channel contact between JEA's board members and Cordish, Balanky, or Ryan during the decision-making process.

Things obviously get muddier when we're potentially talking about taxpayer dollars, but part of the reason that JEA is looking to offload land to pay for the new headquarters is to ensure that whatever decision they make, it doesn't come at the cost of increased rates for local customers.

[Charles Hunter]

This could go in several threads, but, since the title of this one mentions "evacuation risk", I picked this one.
Nate Monroe has a good opinion piece about the Sea Level Rise Task Force.  Of course, since Lenny doesn't believe in that, it has a more obfuscating name.
https://www.jacksonville.com/news/20190327/nate-monroe-flood-study-should-include-areas-that-actually--uh-flood

This quote was interesting

Tucked into the city's application for federal grant money to tear down the functional Hart Bridge ramps — which we've been told must happen for Khan's development to take shape — city officials concede they "will address the flooding issues in recent years caused by the rising water level of the St. Johns River."

So, the City's application for federal funds for a portion of the cost of removing the Hart Ramps says the City will address flooding issues in the area.  Yet, the "new" East Bay Street will be at precisely the same elevation as the existing one.

[marcuscnelson]

We have numbers!

In none of the offers will JEA actually own their office.

Location		Square footage		Lease per square feet		First year's lease		Total development cost
King's Avenue		176,230		$34		$5.6 million		$81.7 million
Northbank		195,426		$32.97		$6.4 million		$72.2 million
Lot J		176,320		$26.99-$28.92		$4.7-5.1 million		$81.23 million

Cordish & Iguana are apparently offering anywhere between a 15-25 year lease.

The Northbank/Ryan proposal seems to have a lot going for it. It's the closest to JEA's requested square footage, it'll be the earliest available, and while the lease price is high the overall development cost is the lowest. Interesting that they've chosen next door to the Courthouse as the chosen site.

Interesting note on the final vote:

On Tuesday, only four of the seven board members are expected to cast votes – Alan Howard, April Green, Camille Lee-Johnson and the Rev. Frederick Newbill.

Board member John Campion is out with an illness, Kelly Flanagan is abstaining because she is the CFO of the Jaguars, and one seat on the board remains vacant.

The meeting is scheduled for 2 p.m.

[Steve]

That tells me they're going with Lot J. Lowest Lease Per Square Foot.

- The key to me was that unless there was zero financial argument they could make about Lot J they were going with it.
- Kings Ave is surprisingly the highest overall - I wasn't expecting that.

To me, the Northbank one is the better deal financially for them.

[acme54321]

I don't know how much a million dollars difference in rent is going to weigh in vs other factors mentioned.  JEA's operating budget is around $2B a year.  A million dollars is practically a rounding error. 

[Charles Hunter]

If transit access is an important evaluation factor, the ranking should be Northbank, King's Avenue, then Lot J.  With the Total Development Cost of Northbank the lowest, it should be an easy decision.

[Captain Zissou]

That tells me they're going with Lot J. Lowest Lease Per Square Foot.

I can't wait for the April Fools article.  Some of the actual headlines this year have been so unbelievable that it's going to take a real doozy to surpass them.

[Steve]

One (legit) question I do have: The Adams Street proposal is like 20k SqFt larger than the others. Someone mentioned it was closer to JEA's ask. What was the JEA ask?

[jaxlongtimer]

That tells me they're going with Lot J. Lowest Lease Per Square Foot.

- The key to me was that unless there was zero financial argument they could make about Lot J they were going with it.
- Kings Ave is surprisingly the highest overall - I wasn't expecting that.

To me, the Northbank one is the better deal financially for them.

I read where the lease per square foot numbers are not comparable.  The lower ones exclude the parking facility while the higher ones include it.  Can't tell if that accounts for all of the difference, but likely does most of it.

The devil is in the details.  Would JEA also pay a bit more for a superior location, a more architecturally pleasing building, ability to make desired leasehold improvements (which will apparently fall to JEA), preferred floor plates and column spacings, public visibility, connectivity and appropriateness to the surrounding area, amenities, maintenance and operational costs, security, resistance to natural disasters, attractiveness to recruiting employees, proximity to internet and communication hubs, etc.? They should be putting a value on intangibles like this, not just the pure numbers.  Unless the developers are really greedy, you usually get what you pay for in a contest like this.

There is also the quality of the developer's contract such as guarantees on pricing and timelines for completion, common area arrangements, handling of change orders, etc.

[minder]

Whats next for Cordish/Jaguars if JEA choose one of the other sites? Would they be able to attract a major company from the suburbs to anchor the office development, i.e. Web.com, Fanatics, Firehouse etc?

[marcuscnelson]

Whats next for Cordish/Jaguars if JEA choose one of the other sites? Would they be able to attract a major company from the suburbs to anchor the office development, i.e. Web.com, Fanatics, Firehouse etc?

No way they get Web.com. They're about to move into a brand new building by Town Center. Unless Cordish is about to buy them out of that lease and then make them wait 3 years for a new office, that just isn't happening.

Fanatics and Firehouse? Anyone's guess.

[thelakelander]

We have numbers!

In none of the offers will JEA actually own their office.

Location		Square footage		Lease per square feet		First year's lease		Total development cost
King's Avenue		176,230		$34		$5.6 million		$81.7 million
Northbank		195,426		$32.97		$6.4 million		$72.2 million
Lot J		176,320		$26.99-$28.92		$4.7-5.1 million		$81.23 million

Cordish & Iguana are apparently offering anywhere between a 15-25 year lease.

The Northbank/Ryan proposal seems to have a lot going for it. It's the closest to JEA's requested square footage, it'll be the earliest available, and while the lease price is high the overall development cost is the lowest. Interesting that they've chosen next door to the Courthouse as the chosen site.

Interesting note on the final vote:

On Tuesday, only four of the seven board members are expected to cast votes – Alan Howard, April Green, Camille Lee-Johnson and the Rev. Frederick Newbill.

Board member John Campion is out with an illness, Kelly Flanagan is abstaining because she is the CFO of the Jaguars, and one seat on the board remains vacant.

The meeting is scheduled for 2 p.m.

So this goes down today?  Any last minute predictions?