Mixed-use project proposed for Ambassador Hotel block

[jaxlongtimer]

Didn't we give incentives for this? Jeez.

Incentives that are not paid out until the project is complete

I believe an issue with incentives is that they sometimes (1) seduce developers into thinking the project risk is much less to them than otherwise so they, and their backers/financiers, are less cautious/thorough in vetting their projects which enables projects to go forward that possibly should not and/or (2) act as "found money" for developers who initiate projects they think will enable them to grasp the "golden ring" at the project's end, blinding them to the risk of doing the project.

Developers tend to be the ultimate optimists and risk takers, based on my observations, so you could knock some of them over with a feather... effectively the role played by incentives in some cases.

While the City may not be out many dollars if a project doesn't get completed, the process soaks up lots of time and resources that could be more productively used advancing the City's interests.  Further, an incomplete building is a blight on the neighborhood and it may be difficult to salvage the efforts already made for many years, if ever, making a future project for the subject site even more difficult to get done.

If someone is "fool enough" to give them incentives, developers are likely going to do whatever it takes to "earn" them.  That tells you that incentives may not be necessary, at least to the degree offered.*

* While not a developer, Jinko Solar does demonstrate that people ask for incentives just because they can: 

Nate Monroe: Solar company under federal scrutiny reveals valuable lessons for city officials

COMMENTARY | The topsy-turvy tale of JinkoSolar took an intriguing twist this week: the company, whose Westside manufacturing plant was raided last month by Homeland Security agents, said it would still move forward with a planned $50 million expansion despite the Jacksonville City Council withdrawing legislation that would have provided the company a multi-million dollar tax break.

City officials had previously said that financial incentive was a necessary pot-sweetener to convince JinkoSolar to expand in Jacksonville "as opposed to another location."

Apparently it wasn't....

https://www.jacksonville.com/story/news/columns/nate-monroe/2023/06/16/what-a-troubled-solar-company-can-teach-city-hall-nate-monroe/70329832007/

[simms3]

^^^I'm very open to your line of reasoning here.  In many cases with residential projects, our downtown simply doesn't have the rents to pencil most projects.  They received incentives in the form REV Grants, however, both Vista Brooklyn and the Doro are either achieving rents at north of $2.50psf or asking rents at north of $2.50psf (blended for each).

Riverside St. Johns not far behind, Southerly at Southbank a bit further behind.  The Barnett also does pretty damn well in terms of rents.  If Doro achieves what it's asking and has a pretty strong leasing velocity, then I think that will be a signal to the market.  We need existing signals of underlying achievement to prove out the concept of downtown living and the often significantly higher downtown living proforma demands.  It should "de-risk" downtown investment to a degree (I think).

Maybe with Doro we'll get to a place of sustainability and there will be increased interest and activity from outside investors who can better take on these sorts of projects.

[thelakelander]

I was afraid this would happen. When I went by the Ambassador sight there was no sight of any workers or work having been done on the building in months and was told they still had a problem ordering the windows but it just seemed this project had died a slow death. But unfortunately, it appears this company, already way over their head working on the Ambassador, has financial problems also affecting the Independent Life building (which did seem to have some construction activity) and any future plans for the Central National Bank building.

https://www.jacksonville.com/story/news/local/2023/06/28/downtown-jacksonville-developer-deals-with-liens-and-foreclosure-suits/70331767007/

Hate to think of this as another Desperate Downtown Desperately Disperses to get Desperate Developers situation...

I just walked by these buildings. No movement going on at the Ambassador today. There are workers on-site inside the Independent Life building.