I remember Rick Mullaney wanting to establish a medical district in the urban core, when he unsuccessfully ran for mayor a few years back. What Florida Blue has decided to build in Orlando would have been a nice anchor in said medical district.
(http://media.bizj.us/view/img/1277861/lake-nona-innovation-center*600.jpg)
QuoteWhy Florida Blue's new innovation center is in Orlando and not Jacksonville
When plans for the Florida Blue Innovation Center in Orlando were announced last week, an obvious question was raised: Why not Jacksonville? Because Jacksonville isn't ready for a facility like the one planned, a Florida Blue executive said.
full article: http://www.bizjournals.com/jacksonville/news/2013/10/28/why-florida-blues-new-innovation.html
Seems pretty silly, since there is lots of space at the Deerwood campus for something like this.
When they mention not ready, they aren't referring to land availability.
Orlando has the UCF medical school to manage this, Jacksonville has no medical school besides the UF branch. And they have people in place to coordinate the planning. Those are the things that make Jacksonville "not ready".
Quote from: mbwright on October 29, 2013, 08:41:17 AM
Seems pretty silly, since there is lots of space at the Deerwood campus for something like this.
You should visit the Lake Nona facility in Orlando. That's the type of collaberative research campus that Rick Mullaney talked about when he ran for mayor. That was his vision. Mayor Brown's vision was to have an NBA team and a Winn Dixie downtown.
That's what Renee Finley (who btw, worked on the Mayor's team as the director of public-private partnerships) means when she says that Jax isnt ready for this yet. She's right.
Always thought that Radcliffeville in Charleston (USC's medical school is located in that neighborhood) would be what Springfield could look like if the 8th Street corridor was filled with medical research facilities.
Note that the end of the article mentions the Healthbox incubator Florida Blue is partnering on. This 16-week program is taking place at CoWork Jax in downtown, and fits with the entrepenurial/creative spirit envisioned by One Spark.
Quote from: fieldafm on October 29, 2013, 09:17:23 AM
the Lake Nona facility in Orlando. That's the type of collaberative research campus that Rick Mullaney talked about when he ran for mayor. That was his vision. Mayor Brown's vision was to have an NBA team and a Winn Dixie downtown.
That's what Renee Finley (who btw, worked on the Mayor's team as the director of public-private partnerships) means when she says that Jax isnt ready for this yet. She's right.
Lake Nona is roughly a 40 minute drive from my parent's house. I have a few images from September but I haven't gotten around to making a story out of them. Here are a couple for those who aren't familiar with Lake Nona. I wish it were a bit more walkable but the concept of clustering medical related facilities that can feed off each other is a great idea. This cluster will feed supporting residential and commercial development in the years to come.
(http://photos.metrojacksonville.com/Learning-From/Orlando-2013/i-tbWXnjP/0/M/P1670631-M.jpg)
(http://photos.metrojacksonville.com/Learning-From/Orlando-2013/i-pSnZLbp/0/M/P1670603-M.jpg)
(http://photos.metrojacksonville.com/Learning-From/Orlando-2013/i-PrfnhhD/0/M/P1670599-M.jpg)
(http://photos.metrojacksonville.com/Learning-From/Orlando-2013/i-kG8Gf9h/0/M/P1670619-M.jpg)
(http://photos.metrojacksonville.com/Learning-From/Orlando-2013/i-G36VCHw/0/M/P1670625-M.jpg)
(http://photos.metrojacksonville.com/Learning-From/Orlando-2013/i-Kxc8BvX/0/M/P1670614-M.jpg)
Great shots above.
A quote in the JBJ article jumps out at me.
QuoteIn addition to its central location and the bevy of direct flights at Orlando International Airport, Orlando is years ahead of Jacksonville's efforts to bring together its health care sector, despite the First Coast presence of major players like Mayo Clinic, the University of Florida and of course, Jacksonville-headquartered Florida Blue.
The presence of the Mayo Clinic and UF Shands is nice. But they are over 20 miles apart.
Mullaney's desire was to build around UF Health and the new VA Clinic. Basically what Field described above.
So it was all merit based not any Corprate welfare tipping the scales?
UCF and FIU should have never even been given med schools a few years ago, as there wasn't much need from a demand perspective. They were complete pork projects pushed for heavily by their local lobbists and legislators. In the same way that Orlando was able to get UCF a med school, they were also able to recruit a pretty ridiculous amount of medical research and services to the Lake Nona Medical Campus. Like Field said, its impressive. With the amount of research going on there, and the creation of the Florida High Tech Corridor from Central Florida to Tampa, we're so far behind, I'm not sure there is a way to compete. Not having a research university makes it even harder.
What Jacksonville/North Florida needs to do is find an economic development niche that isn't already being filled, create a long term strategy, and go all in like Orlando did with the Medical City idea. Military research related to the Navy could be one, creating an entrepeneurial haven for creative, artistic millenials is another, becoming even more of a haven for financial services operations globally could be one, taking the port/logistics/manufacturing to the next level could be one. I don't know what the answers are, but I do know that we need a comprehensive economic development strategy that all local legislators, lobbyists, and officials attempt to implement...and it also needs to be something that transcends terms of politicians. In other words...a mediocre mayor or council shouldn't be able to stop it from happening. To do that, it could be put in the Comp Plan with objective goals and intent.
Jax does seem impossibly far behind Orlando, and as has been pointed out, hasn't been aggressive at lobbying for itself to have certain things. Orlando's been known as the tech center and research center of FL ever since I've been reading descriptions of the FL cities in real estate and economic magazines since the 90s. They also have a research university and they are the squeaky wheel.
Infrastructure in place
Research university
Political will
Orlando's easily the 2nd most "important" city in FL from a legislative and economic development perspective, after Miami of course.
I said all of this ~1-2 years ago and got hushed by people saying "but we have Mayo and UF" bla bla bla. Jax doesn't really have anything and it's all spread out, as has also been mentioned.
Thread I started back in May that is totally relevant:
"Life Science & Biotech Clusters"
http://www.metrojacksonville.com/forum/index.php?topic=18514.0
This thread from 2010 is even better:
"Is Jacksonville Ready for an Urban Medical District"
http://www.metrojacksonville.com/article/2010-sep-is-jacksonville-ready-for-an-urban-medical-district
This thread I started in 2012 also might be relevant:
"Less Than 20% of Young Adults in Jacksonville Have 4-Year Degress"
http://www.metrojacksonville.com/forum/index.php?topic=14998.0
As is this thread from 2009:
"Peyton's Struggles: FSU Medical School"
http://www.metrojacksonville.com/article/2009-jan-peytons-struggles-fsu-medical-school
The list goes on. My company is under contract on over $300M of lab/life sciences office space right now. I have some fascinating OMs on lab space in Cambridge, MA, which is equivalent to the Silicon Valley of biotech/life sciences research. I can also share some recent photos of Mission Bay here in SF at some point when I have time - the W Coast version of Cambridge, lots of stuff going up, all basically driven by UCSF which has the #4 medical research university behind Harvard, Stanford (also major SF presence), and Johns Hopkins.
You can basically go down the list of both Top-Ranked Medical Research Universities and Top-Ranked Engineering schools (especially in Bio-engineering), and deduct which cities are seeing massive amounts of research, infrastructure, and attraction to smart people.
Top Medical Research Universities
1. Boston - Harvard
2. Bay Area - Stanford
3. Baltimore/DC - Johns Hopkins
4. Bay Area - UCSF
5. Philadelphia - Penn
6. St. Louis - Wash U
7. NYC - Yale
8. NYC - Columbia
9. Raleigh-Durham - Duke
10. Chicago - Chicago (my gfather attended med school here)
11. Detroit - Michigan
12. Seattle - U Dub
13. LA - UCLA
14. Nashville - Vanderbilt
15. San Diego - UCSD
16. NYC - Cornell
17. Pittsburgh - Pitt
18. Houston - Baylor
19. NYC - Mt. Sinai
20. Chicago - Northwestern
21. NYC - NYU
22. Atlanta - Emory
23. Raleigh-Durham - Chapel Hill
24. Dallas - UT SW Medical Center (UT Dallas?)
25. Cleveland - Case Western
Top Overall Engineering Programs
1. Boston - MIT
2. Bay Area - Stanford
3. Bay Area - Berkeley
4. LA - Cal Tech
5. Atlanta - Georgia Tech
6. Pittsburgh - Carnegie Mellon
7. Chicago - U of I
8. Indianapolis/Chicago - Purdue
9. Detroit - Michigan
10. LA - USC
11. Houston - Texas A&M
12. Austin - UT
13. NYC - Cornell
14. San Diego - UCSD
15. NYC - Columbia
16. LA - UCLA
17. NYC/Philadelphia - Princeton
18. Milwaukee - UW Madison
19. DC - Maryland
20. Chicago - Northwestern
21. LA - UC Santa Barbara
22. Philadelphia - Penn
23. Boston - Harvard
24. DC - Virginia Tech
25. DC/Baltimore - Johns Hopkins
Top Biomedical Engineering Programs
1. DC/Baltimore - Johns Hopkins
2. Atlanta - Georgia Tech
3. San Diego - UCSD
4. Raleigh-Durham - Duke
5. Boston - MIT
6. Bay Area - Stanford
7. Philadelphia - Penn
8. Seattle - U Dub
9. Houston - Rice
10. Bay Area - Berkeley
11. Detroit - Michigan
12. Boston - Boston U
13. St. Louis - Wash U
14. Cleveland - Case Western
15. Austin - UT
16. Pittsburgh - Pitt
17. Nashville - Vanderbilt
18. Chicago - Northwestern
19. Bay Area - UC Davis
20. NYC - Columbia
21. NYC - Cornell
22. Milwaukee - UW Madison
23. Boston - Harvard
24. Indianapolis/Chicago - Purdue
25. Minneapolis - Minnesota
It was interesting to reread the article regarding FSU's medical school. The most interesting portion was how the article pointed out the lackadaisical attitude of the City in pursuing the opportunity. The sentiment from years ago seems to mimic the sentiment of our Governor today regarding Jacksonville's efforts to boost the economy.
Quote from: icarus on October 29, 2013, 01:17:46 PM
It was interesting to reread the article regarding FSU's medical school. The most interesting portion was how the article pointed out the lackadaisical attitude of the City in pursuing the opportunity. The sentiment from years ago seems to mimic the sentiment of our Governor today regarding Jacksonville's efforts to boost the economy.
I almost mentioned it in my earlier post, but I heard back at that time that UF/Shands did not want FSU stepping on their turf and actively worked against it opening here or forming a strong partnership with Mayo. Another poster alluded to that as well in the article. How true that is we'll never know.
UF has had no problem partnering with UCF and USF on the Florida High Tech Corridor though. I know there are a lot of UF grads in this town that are very successful and do great stuff for the city....but us getting left out of the Florida High Tech Corridor is a potentially catastrophic loss to the city in the long term.
Quote from: fieldafm on October 29, 2013, 09:17:23 AM
Quote from: mbwright on October 29, 2013, 08:41:17 AM
Seems pretty silly, since there is lots of space at the Deerwood campus for something like this.
You should visit the Lake Nona facility in Orlando. That's the type of collaberative research campus that Rick Mullaney talked about when he ran for mayor. That was his vision. Mayor Brown's vision was to have an NBA team and a Winn Dixie downtown.
That's what Renee Finley (who btw, worked on the Mayor's team as the director of public-private partnerships) means when she says that Jax isnt ready for this yet. She's right.
Always thought that Radcliffeville in Charleston (USC's medical school is located in that neighborhood) would be what Springfield could look like if the 8th Street corridor was filled with medical research facilities.
This is the project that Michael Maher turned down the DIA ED spot for:
http://charlestonhorizon.com/
QuoteMayor Brown's vision was to have an NBA team and a Winn Dixie downtown.
Classic!
Yes, Renee Finley is a sharp lady, she used to live down the street from me and I used to see her over at the BCBSF campus from time to time passing from meeting to meeting. She is from Jacksonville and knows Jacksonville, so when she says its not ready, that is a slap to Mayor Brown that he needs to get going to ramp up Jax.
One would think with the presence of Mayo and Shands Jax, there would be more excitement, and with our local economy pulling 20% of its growth out of healthcare, one would think.....
But Orlando is on fire now, real estate has come back in the residential market. It is one of the top 10 thriving markets in the country, jobs are more plentiful there. And its a destination city, like Miami, as compared to Jax. It will always be a destination city, to see them add another feather, medical, to their cap really will be hard to overcome.
Jacksonville has no real game changer, no real draw, this is what the leaders need to work on and build on for the future.
UF Health/Shands is primarily a teaching hospital, not research focused, though I do think they do some research here. On the other hand UF opened a 100,000 square foot medical research facility at Lake Nona. http://learnlakenona.com/medical-city/uf-research-center/
There is also the Sanford-Burnham medical research institute at Lake Nona. That is why Florida Blue choose to open a research facility there. Lots of synergy and opportunities for partnerships there.
Mayor Brown doesn't know what he's doing, but he's not exactly at fault for this. Like I said earlier, these are the type of things you have to plan and work on years in advance.
Quote from: CityLife on October 30, 2013, 09:38:07 AM
Mayor Brown doesn't know what he's doing, but he's not exactly at fault for this. Like I said earlier, these are the type of things you have to plan and work on years in advance.
Yeah, reading through this thread, it's as if a snap of the fingers instantly bring in a powerhouse hospital research cluster overnight, like voila. I don't necessarily think that Jax has to stand out boldly in that particular field, like it's the last thing on Earth or something. Hopefully Florida Blue will 'be here for us' and do something with the Barnett Building DT though.
Another factor to consider is that a lot of the land for these projects was either free or heavily reduced as a development strategy for a large master planned community. It would be like Nocatee giving UNF 50 acres of free land for R&D, and saving a few hundred acres for spinoffs.
IMO, there are only a few places where something of this scale could be done in Jax. Downtown with COJ's countless vacant/underutilzed properties or another spot that I don't want to blow up.
Quote from: CityLife on October 29, 2013, 01:30:45 PM
I almost mentioned it in my earlier post, but I heard back at that time that UF/Shands did not want FSU stepping on their turf and actively worked against it opening here or forming a strong partnership with Mayo. Another poster alluded to that as well in the article. How true that is we'll never know.
I can believe that. UF didn't want the proton therapy but once an independent group moved ahead with it, they were eager to be a part of it. I have a lot of respect for UF's medical program but in this case, they may have done our city a disservice.
Quote from: CityLife on October 30, 2013, 10:28:39 AM
Another factor to consider is that a lot of the land for these projects was either free or heavily reduced as a development strategy for a large master planned community. It would be like Nocatee giving UNF 50 acres of free land for R&D, and saving a few hundred acres for spinoffs.
IMO, there are only a few places where something of this scale could be done in Jax. Downtown with COJ's countless vacant/underutilzed properties or another spot that I don't want to blow up.
I think Mullaney's idea and many others was to promote a Medical corridor in either Downtown or Brooklyn. But, a lot of people seem to think that developing anything Downtown is such a no-brainer. Yes, there is a lot of vacant land but most if not all of it is broken into smaller parcels with disparate ownership. A great deal of the owners have rather unrealistic expectations of the value of the real estate as well, i.e. the Bostwick Building and the various parcels and buildings owned by Hionides and others. And, don't even dream about trying to work with COJ to get anything done. While the COJ employees are very helpful and accommodating, no one is capable of making a decision.
Sadly, it is much easier to develop anything meaningful outside of Downtown. A medical research park would be much easier to develop say at Baptist South or even in the area surrounding WGV.
I believe Mullaney was targeting the area around UF Health/Shands. Parcels are fairly large, considering it's an urban area and there's already a medical presence in the vicinity to build around (ex. UF Health, VA clinic, Duval County Health Department, etc.). With that said, I know some were after locating a medical school in the general area but I doubt you would have been looking at a research park. Instead, it just would have been a heavy concentration of complementing uses/workforce within a compact setting (still an economic coup and anchor for the revitalization of the urban core).
I'm a big proponent of such an endeavor but I don't see it working there.The area is essentially limited to West of Broad Street, South of the S-Line rail/trail and North of 6th and Jefferson. The only way such a development would work would be to repurpose some existing parcels, namely parking lots. Even if redeveloped, there is no connectivity to the rest of the Urban Core.
Connectivity comes in the form of the S-Line (future commuter rail corridor) and existing bike trail. There's also the proposed streetcar and BRT routes that would run through there. It's actually just about the best place in the urban core such a concept.
Yea I don't think connectivity is the issue with that site for reasons Lake mentioned. I think the real difficulty would be assembling the land to create a unified development. The only way to do so without adjacent property owners overinflating sales prices of land, is to have a private developer with deep pockets buy the different parcels up on the down low...and even then the developer would need assurances of what would get built and who would be coming. Which of course would be difficult to keep quiet.
That said, like Icarus said, you could repurpose some of the exisiting parcels at and around UF/Shands. There are definitely a lot of surface lots to build up on and older buildings (that aren't architectually significant) to potentially tear down. I'm sure a good design team could make some magic happen there.
Quote from: CityLife on October 29, 2013, 10:28:19 AM
UCF and FIU should have never even been given med schools a few years ago, as there wasn't much need from a demand perspective. They were complete pork projects pushed for heavily by their local lobbists and legislators. In the same way that Orlando was able to get UCF a med school, they were also able to recruit a pretty ridiculous amount of medical research and services to the Lake Nona Medical Campus. Like Field said, its impressive. With the amount of research going on there, and the creation of the Florida High Tech Corridor from Central Florida to Tampa, we're so far behind, I'm not sure there is a way to compete. Not having a research university makes it even harder.
What Jacksonville/North Florida needs to do is find an economic development niche that isn't already being filled, create a long term strategy, and go all in like Orlando did with the Medical City idea. Military research related to the Navy could be one, creating an entrepeneurial haven for creative, artistic millenials is another, becoming even more of a haven for financial services operations globally could be one, taking the port/logistics/manufacturing to the next level could be one. I don't know what the answers are, but I do know that we need a comprehensive economic development strategy that all local legislators, lobbyists, and officials attempt to implement...and it also needs to be something that transcends terms of politicians. In other words...a mediocre mayor or council shouldn't be able to stop it from happening. To do that, it could be put in the Comp Plan with objective goals and intent.
We couldn't be so lucky. It would be nice to have politicians actually fight for this city for once, instead of running for office only to be a destructive force.
The main piece we're missing is a medical school. That's the driving force in the research and organization. Even without one there's a lot more that could be done, but it's definitely true that it would take us voting for the leaders who shoot for more than basketball, Macy's and 7/11.
There are tons of fields of research that don't require a Med School though. So if we know we don't have one, and presumably can't attain a new one, then maybe we should focus on those instead. Chemsitry, materials, engineering, robotics, military...the list goes on. I'm not a science guy by any means, but know that there is a lot more out there than just med and biomed research.
It seems like politicians around here got stuck on these bizarre projects and when the next one comes along, they scrap it all for another project that will save the day. Why not just work to make the city a great place for people to live. Why not work to make Klutho park nice before we dump money into a park at the shipyards. When she says we are not ready... We are not. It really is the simple stuff. I was going through the area around Shands today, and the whole area looks like shit. What do we expect.
I guess when comparing our medical district to other cities' medical districts. You would never think anything important happens in that area.
Quote from: jcjohnpaint on October 30, 2013, 05:09:32 PM
It seems like politicians around here got stuck on these bizarre projects and when the next one comes along, they scrap it all for another project that will save the day. ...
+1
Quote from: icarus on October 30, 2013, 05:27:19 PM
Quote from: jcjohnpaint on October 30, 2013, 05:09:32 PM
It seems like politicians around here got stuck on these bizarre projects and when the next one comes along, they scrap it all for another project that will save the day. ...
+1
Which is normal for a municipality that doesn't have a robust strategic plan. They move from tactical (whim) to tactical hoping it is the silver arrow.
Then we try to be everything to all and we end up being mediocre to many.
Relative Success = Cecil Commerce
Relative Fail = Prime Osborne
Quote from: icarus on October 30, 2013, 10:47:00 AM
Yes, there is a lot of vacant land but most if not all of it is broken into smaller parcels with disparate ownership. A great deal of the owners have rather unrealistic expectations of the value of the real estate as well, i.e. the Bostwick Building and the various parcels and buildings owned by Hionides and others.
Quote from: CityLife on October 30, 2013, 12:56:48 PM
Yea I don't think connectivity is the issue with that site for reasons Lake mentioned. I think the real difficulty would be assembling the land to create a unified development. The only way to do so without adjacent property owners overinflating sales prices of land, is to have a private developer with deep pockets buy the different parcels up on the down low...and even then the developer would need assurances of what would get built and who would be coming. Which of course would be difficult to keep quiet.
That said, like Icarus said, you could repurpose some of the exisiting parcels at and around UF/Shands. There are definitely a lot of surface lots to build up on and older buildings (that aren't architectually significant) to potentially tear down. I'm sure a good design team could make some magic happen there.
Agree on most points but I don't think sellers in and around downtown are mostly unrealistic. I wouldn't be a seller either. They are simply holding out for ANY market to return, and some may be taking even longer positions if they have patient enough money. Anyone selling out now is giving away their land to a developer who may or may not actually be serious or who may even have money that's even more patient than the seller's (in that case what's the point of selling if you can hold out?). Most developers are clearly still only developers if the city gives them enough incentives that cover upfront costs like land (which in effect means that property owners ARE literally giving away their land for free), or at minimum takes down their tax liability to a certain scale over a certain period of time (usually a longgg period of time...long enough for them to buy, hold, build, hold, then sell AND pass on tax benefits to next buyer).
Crescent Heights is surely also not looking to develop. They did not follow their usual course of action by buying development sites (if there was any concern for new competition in either apartments or condos if they go condo conversion in the future, they would have probably bought adjacent waterfront development sites for their own control and future development). Instead they bought a single stabilized multifamily asset in the smallest market they now play in. Pricing may have set a new watermark for the entire metro, but I guarantee you that at $183K/door it's still well below replacement cost, especially with land value considered. CH is clearly not worried about another developer coming in and putting up new high-rise/mid-rise condos or apartments and diluting their rent growth or their future condo sales velocity.
Their only competition in the near term will be 220 Riverside, and it's an entirely different product in an entirely different submarket. At minimum given their basis ($183K/door), they don't have to necessarily worry about 220 Riverside dragging rents down with lower than market for Type III construction in this kind of market (lease-up concessions at most, but nominal asking won't be a concern). Strand is Type I construction, which is more expensive since it requires concrete/steel and more intense contract/sub work. Despite this, 220 Riverside will likely even have higher effective rents than the Strand before upfront concessions, perhaps driving more people to look at the Strand in the long term. Anyway, I digress - no matter how cheap that riverfront land is next door, they still saw no reason to make a move on it to hold for later. If they aren't buying it, nobody is. And if nobody's interested in prime waterfront development sites in a growing FL city with a warm climate and during a booming multifamily lending market, they sure as hell aren't interested in office development sites in desolate or unsightly as-yet-to-be gentrified "urban" markets in an otherwise suburban city with no market or labor force for R&D.
Bottom line - NO market. Nowhere for the market to go but up. If you are young and aren't concerned about fixed income shortfalls or certain tax liabilities, then hold and even discreetly double down while the market is still at the bottom! LoL
Blame city leaders for not doing Jax economy any favors, not local property owners not yet willing to give away their property. If the city wants a small "Jacksonville" version of Cambridge or Silicon Valley, wherever in the city, then it needs to somehow focus on the basics - lower crime, improve area schools, beef up local secondary programs and work with state institutions rather than turn them away to competitive markets like Orlando, increase quality of life so that mobile professionals will actually want to move here, and the Chamber should have clear goals and relatively narrow focus playing to area's strengths, rather than trying to get whatever it can, etc etc.
QuoteMayor Brown doesn't know what he's doing, but he's not exactly at fault for this. Like I said earlier, these are the type of things you have to plan and work on years in advance.
You are right, not fair to blame Brown, but the lack of vision by Peyton and Delaney (although he did give us the BJP and legacy is built on capital improvements) is an easy target. Not to hijack the thread, but I have yet to see Brown in front of a Medical facility for a press conference to hype what we offer locally in medical services. He is quick to jump into a sports press conference, but real growth seems to elude his legacy.
Transit will be a real issue no matter what is built. Any medical center will need a stream of patients and as people age, they won't drive, should not drive either, and public transit needs to be available. A center would thrive if it is on a good transit line in close proximity to its customers. Or maybe you follow Baptist' lead and build their neighborhood centers?
Quote from: simms3 on October 30, 2013, 11:07:47 PM
Agree on most points but I don't think sellers in and around downtown are mostly unrealistic. I wouldn't be a seller either. They are simply holding out for ANY market to return, and some may be taking even longer positions if they have patient enough money. ...
...Crescent Heights is surely also not looking to develop. ... Anyway, I digress - no matter how cheap that riverfront land is next door, they still saw no reason to make a move on it to hold for later. If they aren't buying it, nobody is. ...
Blame city leaders for not doing Jax economy any favors, not local property owners not yet willing to give away their property. If the city wants a small "Jacksonville" version of Cambridge or Silicon Valley, wherever in the city, then it needs to somehow focus on the basics - lower crime, improve area schools, beef up local secondary programs and work with state institutions rather than turn them away to competitive markets like Orlando, increase quality of life so that mobile professionals will actually want to move here, and the Chamber should have clear goals and relatively narrow focus playing to area's strengths, rather than trying to get whatever it can, etc etc.
Simms - Not all owners downtown are unrealistic and several are in for the long haul hold. Unfortunately, I have been on the acquisition side trying to deal with some of the smaller parcel owners and some of the larger. The values asked weren't just above market, not just above market 5 years later but just not market rates. And, I'm not just talking downtown proper but Phillip Randolph area and others. The properties remain vacant unoccupied or demolished. I think the recession has tempered some of the irrational exuberance but it would still take some deep pockets to aggregate and hold the parcels. And, I agree that the downtown Jacksonville market is just not strong enough to support that kind of investment now or in the near future. Especially, when the City has a 19 story office building 2 blocks from the new Courthouse for sale for just $3.5m and no takers.
I don't know that I can agree that no one is interested in developing multifamily sites downtown but as a developer why would you when it can be done so much cheaper as low rise mid rise in already established areas. I think as the market recovers there will be more demand especially once Publix is in San Marco. But, Crescent or any other developer can wait on the sidelines to pick it up at that time with out tying up their capital. Its not like there is a shortage of vacant or available waterfront land.
As for your bolded opinion, I wholeheartedly agree and completely blame the lack of vision and planning on our current and former politicians.
Quote from: icarus on October 31, 2013, 11:11:19 AM
I don't know that I can agree that no one is interested in developing multifamily sites downtown but as a developer why would you when it can be done so much cheaper as low rise mid rise in already established areas. I think as the market recovers there will be more demand especially once Publix is in San Marco. But, Crescent or any other developer can wait on the sidelines to pick it up at that time with out tying up their capital. Its not like there is a shortage of vacant or available waterfront land.
Too many things at play. When it all comes down to it, multifamily follows jobs (and grocery merely follows rooftops - 3rd in the chain of command), which is why apartments of many types are being built in mass AND financed on the SS (220 Riverside was not financed as a reminder).
CH bought the most expensive apartment building in Jax for well below its replacement cost, based on in-place rents and forecasted rent growth. That alone is an indicator that high-rise apartments aren't feasible in the Jacksonville market, and with land such a negligible component of apartments anywhere in Jax, it's not even about land prices. Current rents simply aren't high enough and rent growth predicated on job growth is not going to overcome this anytime soon. Apparently there's not nearly enough job growth of the higher end variety in Jax, especially downtown, for anyone to be bullish on further development. Which is probably the only reason CH didn't buy any adjacent or nearby land. They aren't bullish on the market and know that nobody else is either.
They saw a value add opportunity (even though it's a "core" stabilized multifamily deal) and they struck. Given the area risks and Jax as a market, they are definitely going for mid-teens or higher leveraged IRR in a hold strategy (even with 5+ year hold - I don't think anyone sees DT jobs roaring back within 2-3 years), probably well north of 20-25% IRR if their business plan is for a condo conversion), whereas if this building were picked up as it were - stabilized and prime location with high watermark rents for area - in another more "core" city, buyer would be holding and maintaining status quo, looking for 5% annual yield and an almost equally low leveraged IRR (definitely sub-10). Also of note - their returns are going to be that much lower IF this was a cash transaction. My memory is telling me this was a cash transaction and wasn't even financed (either because lenders couldn't underwrite a condo conversion or lenders don't touch DT Jax, as we saw with 220 Riverside).
IF there was the threat that others would enter the DT market for high-rise condos, or apartments (or even more Type III deals like 220 Riverside), I'm sure they would have either reconsidered their acquisition or made room to tie up land that would otherwise go to a competitor. Low land costs and low interim taxes are an easier known in-place cost/risk than a returning market with competing developers and more expensive land where delivery sensitivities as they relate to rent growth are hard to forecast given the narrow depth and short history of the market.
My take - and it semi-relates to Jax not being ready for a biotech cluster, lol.
Quote220 Riverside was not financed as a reminder
Incorrect.
^^^Who's lender? I thought all articles said it was an all equity deal between the JV.
There is an equity partner, but that doesnt mean the entire deal isn't financed.
^^^There's a BIG difference between equity "financing" and traditional financing by a bank. We are a preferred equity partner in countless deals - like any other preferred partner or LP, we are much more expensive than debt right now. Preferred returns are more similar to mezz debt (even higher though I'm not in capital markets so I'm not the right person to be commenting), the difference being that if you are equity you must be silent whereas if you are mezz you can bitch and whine and butt in when you want with approvals and this that or the other. We could be talking hundreds of BPs difference "cost" - equity is more expensive than debt.
Hallmark probably has a promote and as GP collects fees, but MAA is probably demanding a super high return (especially given nature of project, experience of partner in multifamily, and the local market/submarket), which easily eats into exit proceeds, let alone interim CFs once development is complete and stabilized, before Hallmark can collect on anything.
If the deal were leveraged, after debt service a more common and equitable equity structure would have been pari passu where both parties receive an upfront return relative to each's respective interest in the deal before the waterfall trickles down to favor one over another.
So overall, for most situations a traditional C-Loan is preferred, and obviously a perm for stabilized acquisitions. A really experienced operator would be able to convince at least A lender to do a low interest short term loan for even the most complex or risky of deals. We just received 3-yr financing from JP Morgan for a really complex deal I'm working on. Much cheaper than finding an LP to be the silent equity partner.
I am acutely aware of the differences.