Considering all of the delays that Jacksonville has had regarding fixing up old structures (trio, Ambassador, Berkman 2, etc) and the need for more residents downtown. Is there a reason why we can't give the new owners of the office buildings downtown some sort of incentive to convert free floors into condo / apartment space?
I know of 6 buildings that have recently changed hands (past 2 years) and are up for renovations by their new owners. Would it be possible to incentivize these sales / future sales by allowing mixed use within the buildings? Surely it would be cheaper/faster to appropriate some funds/tax credits to converting a few floors to residences than to try to fix up some of the older structures.
Obviously, there would be a need for some businesses to change floors in order to consolidate "business floors" and "residence floors". There would also need to be some legal work done to make the buildings multi-use. I feel like if this was possible you could open up a significant amount of residences immediately in the core and continue "feeding the fire" downtown. With more people you can sustain more businesses. With more businesses you make downtown more desirable, bustling, etc.
The ultimate goal would be, when the office buildings were full developers would be much more likely to step in and renovate the old structures as they would be the only remaining spaces.
Prime examples of this can be found in Orlando. Aspire, Vue, 310 Lakeside, etc around Lake Eola.
The Metropolitan Lofts are a good example in DT Jax.
From a zoning perspective, it should not be hard, and maybe can be done already. I think a better option would be to take a Class B or C building that is vacant or mostly vacant and convert the whole thing to Residential, like Metropolitan. From an investing/leasing perspective there are a lot of differences between residential vs. office.
That would be ideal, but with the lack of housing downtown I feel like this could be a short term solution. It would be significantly cheaper to only convert part of the building and it would boost building occupancy / profits for the owners.
It wouldn't be cheap or short term once you start investing in adding bathrooms and kitchens for every residential unit. Depending on the building's foorplate, you could also run into problems reconfiguring space efficiently. Ideally, the older office buildings (Barnett, 218 Adams, Lerner Shops, etc.) are more suitable for residential conversion due to their smaller floorplates. Unfortunately, they also need the most work to bring back to life.
Would have to be multi-million dollar condos if you're talking a conversion of floors in any of the major and/or new office towers downtown. Relatively few examples of such a conversion anywhere, but Two Liberty Center in Philadelphia is one (1990s building). Also, the Woolworth Building in NYC (1900s building). The two halves of the tower are under different ownership, with Alchemy taking the top half and converting to condos. I think they were asking $30M or $50M for the Penthouse. Maybe even more.
Most of the downtown building owners are also fairly mom & pop fund shops with limited expertise, and certainly limited capital (seems they make opportunity plays based on pricing/market rather than any sort of value add strategy, which this could be considered on).
Also, think this through. You're not going to spend that kind of money on just a few rentals (where your achievable top dollar rents are among the lowest in the country and the conversion price per door is suitable for selling rather than renting). So you're stuck selling. Once you sell, there is nothing short term about that (???). Also, if you were thinking rentals - in thinking about it as a short term play - were you thinking it would be logical to spend that money to create rental apartments for your building for 12/24/36 months or however long it takes for the office market to come back, and then spend a fortune again to reconvert to office? Keep in mind that not all tenants have landlord relocation rights and so are not necessarily bound to relocate at landlord's request, and those that do will need to be paid $$$ and be able to locate to like-kind space in the same building (i,e same square footage and likely similar view since that is what many tenants pay for).
The feasibility of what you talk about is the closest thing to an impossibility in the real estate industry as there is one. But I can appreciate the thinking outside the box mentality.
Quote from: thelakelander on August 10, 2015, 03:24:00 PM
It wouldn't be cheap or short term once you start investing in adding bathrooms and kitchens for every residential unit. Depending on the building's foorplate, you could also run into problems reconfiguring space efficiently. Ideally, the older office buildings (Barnett, 218 Adams, Lerner Shops, etc.) are more suitable for residential conversion due to their smaller floorplates. Unfortunately, they also need the most work to bring back to life.
What type of work are you talking for the Barnett? It was already gutted right? Isn't it pretty much open spaces wall to wall minus columns and shafts or am I thinking of another building? Is there damage that needs to be remediated?
^^^You'd have to construct restroom/emergency/stairwell cores for any type of use. You'd have to create stacks of lots of restroom and kitchen cores for a residential use, or hotel use. Possibly floor risers.
Residential has more "cores" for restrooms than hotel, which has more than office. Office likely to be cheapest, but worst market in Jax and likely most difficult to finance and exit. But office rents are likely > $20/sf full service (~$1.67/sf/mo) whereas residential rents are likely <<<$1.50/sf/mo.
Talking through any of these numbers in 30 seconds makes it difficult to imagine that conversion is feasibly possible at all. There are reasons that these kinds of projects haven't really happened yet, and the few that have have been financial failures from many standpoints.
Quote from: simms3 on August 10, 2015, 05:34:31 PM
^^^You'd have to construct restroom/emergency/stairwell cores for any type of use. You'd have to create stacks of lots of restroom and kitchen cores for a residential use, or hotel use. Possibly floor risers.
Residential has more "cores" for restrooms than hotel, which has more than office. Office likely to be cheapest, but worst market in Jax and likely most difficult to finance and exit. But office rents are likely > $20/sf full service (~$1.67/sf/mo) whereas residential rents are likely <<<$1.50/sf/mo.
Talking through any of these numbers in 30 seconds makes it difficult to imagine that conversion is feasibly possible at all. There are reasons that these kinds of projects haven't really happened yet, and the few that have have been financial failures from many standpoints.
It may not make financial sense if funded entirely by private investors and expected to make a profit. This is perhaps where federal grants come in??? How hard is it to get Landmark status for a building like the Barnett to ease the financial burden of trying to convert something like this? I'm not sure if projects like the Trio and Barnett are ever going to get done in the next 20 years if the city and feds don't chip in. I suppose there is a long waiting list for grants. But with that said I've heard nothing about these buildings being structurally unsound (which is a real project killer) so tear down should not be an option.
No offense to the Barnett, but why would the Feds of all entities chip in to renovate a building in DT Jax from the 1920s that looks like hundreds of other buildings around the country of similar state/stature from the same era. Is this really something the Feds need to get involved in? I mean the best the Feds can really do is put a building on the NRHP, and quite frankly, as beautiful and grand as she is, I can count dozens and dozens of similar buildings I've seen around the country that are similar and are not on the NRHP, and the Barnett is really not all that special at all, except that she's a dying breed in a city that doesn't give two shits about its downtown or its history (at its own expense/fault, nobody else's). I think the people of Jax just need to suck it up, shit, or get off the pot. Because frankly the city is where it is because of the people that live there, not because the feds helped or didn't help. It's just a matter of pride. The most pride I see from a distance in the city from the overall city's collective soul (not the small base on this board that definitely doesn't represent the Jax base) is pride in jumbotrons at the stadium. It's just a matter of priorities, that's all.
As far as NRHP goes, either it qualifies or it doesn't, the number or status of buildings elsewhere is irrelevant. IF it qualifies, it is eligible for Tax Credits on the renovations, which is not insignificant. Such tax credits do not have to be sought in competition with other buildings either. If it is on the NRHP, and is done to specifications, it receives the credit. That said, the regulations and paperwork are precise and cumbersome to some degree.
With these buildings (Barnett and Trio), COJ will have to pony up some subsidy money plain and simple. The one large empty office building COJ owns that would probably make for a decent residential conversion would be the old city hall annex.
(http://photos.metrojacksonville.com/photos/1783914133_83WrnK7-600x1000.jpg)
Quote from: simms3 on August 10, 2015, 10:11:59 PM
No offense to the Barnett, but why would the Feds of all entities chip in to renovate a building in DT Jax from the 1920s that looks like hundreds of other buildings around the country of similar state/stature from the same era. Is this really something the Feds need to get involved in? I mean the best the Feds can really do is put a building on the NRHP, and quite frankly, as beautiful and grand as she is, I can count dozens and dozens of similar buildings I've seen around the country that are similar and are not on the NRHP, and the Barnett is really not all that special at all, except that she's a dying breed in a city that doesn't give two shits about its downtown or its history (at its own expense/fault, nobody else's). I think the people of Jax just need to suck it up, shit, or get off the pot. Because frankly the city is where it is because of the people that live there, not because the feds helped or didn't help. It's just a matter of pride. The most pride I see from a distance in the city from the overall city's collective soul (not the small base on this board that definitely doesn't represent the Jax base) is pride in jumbotrons at the stadium. It's just a matter of priorities, that's all.
It's a chicken or the egg argument. Sometimes pride comes after some good leaders with good vision set about to change things. My hometown (Kalamazoo, mi) was a fairly economically depressed mid sized Midwestern city with very little sense of pride growing up (there really wasn't much to be proud of). A few good leaders came around with a vision and started to fix up the downtown. It started with restoring the vacant historic buildings that everyone forgot existed. That combined with improving the streetscapes changed peoples' opinion of their city. I know it changed mine. People went from having complete apathy for their town to having a real sense of pride and the downtown became much more vibrant again. I would say pride came after the citizens saw action in that case. Maybe the people of Jacksonville will have more pride once the momentum kicks up downtown and they actually see results.
As far as the Feds, you're right why should they care about Jax? But isn't landmark a federal designation and landmark buildings are able to recieve funding through grants? The Barnett and trio aren't too different than some of the landmark buildings in Chicago really. I'm just a nerdy engineer so I'm not too familiar with all the details of these federal grants but I remember doing some repairs for landmark buildings in Chicago and the owners talking about what a blessing landmark was when it came to maintenance and repair costs.
QuoteIt's a chicken or the egg argument. Sometimes pride comes after some good leaders with good vision set about to change things. My hometown (Kalamazoo, mi) was a fairly economically depressed mid sized Midwestern city with very little sense of pride growing up (there really wasn't much to be proud of). A few good leaders came around with a vision and started to fix up the downtown. It started with restoring the vacant historic buildings that everyone forgot existed. That combined with improving the streetscapes changed peoples' opinion of their city. I know it changed mine. People went from having complete apathy for their town to having a real sense of pride and the downtown became much more vibrant again. I would say pride came after the citizens saw action in that case. Maybe the people of Jacksonville will have more pride once the momentum kicks up downtown and they actually see results.
This is exactly what happened in my home, Greenville SC. The city as a whole wasn't economically depressed, but Downtown was. Since the 1980's that has completely changed. Downtown is the epicenter of development for the whole county now. It has the highest rents, lowest vacancies in every sector. Prices are soaring, construction is everywhere, including over 3,000 apartment units recently completed, under construction or approved for construction. National retailers have taken notice and moved in too.
Your point about pride is especially true as well. Whether it is an economic development prospect or an old college friend visiting, Downtown is always on the first thing on the itinerary.
Other than the riverwalks, Laura and Bay Streets, there hasn't been much investment in DT streetscapes since the 1990s.