QuoteGaffney said the Jacksonville Downtown Investment Authority is already in discussions with Atlanta-based Choate Construction Co., which was the original contractor for the building and now owns the structure.
Choate essentially is a de facto owner of the Berkman Plaza II property after the original owner, a condominium development firm, foreclosed on the property in 2014.
Choate Chief Operating Officer Michael Hampton said the company is a general contractor and does not want to own properties.
In fact, the Berkman Plaza II site is the only property the company owns. Choate's desire to get rid of the property, worth an estimated $12.4 million, was evident when the company put it up for auction shortly after assuming ownership in 2014.
There were no takers.
"That's why a construction company ended up owning that property," Hampton said in a phone interview Thursday. "What we've been trying to do is find a developer, and we've been working with a developer who's trying to create an opportunity to finish the building.
"Unfortunately, they have not been able to make the economics of that work out to where the project could be restarted," Hampton said.
Choate was contacted by the city of Jacksonville in October to clean up the site, clear out weeds and reduce some of the overgrowth prior to the Florida-Georgia football game at EverBank Field. Hampton said Choate obliged and provided maintenance work prior to the college game.
Meanwhile, Hampton said Choate continues negotiations with Cocke Finkelstein Inc., an apartment development firm in Atlanta, for a possible plan to finish the building. He said Choate is trying to balance that with ongoing and increasing concerns about the Bay Street property and deterioration of the site.
"I don't know that there's anything Choate can do," Hampton said. "All I know is we have a developer who is trying to work out a way to finish the project. And if they were able to do that, then we would be their contractor."
Full article: http://jacksonville.com/news/metro/2016-02-20/story/ideas-floated-blighted-building-jacksonville-downtown-riverfront
I assumed the owners were being fined daily so we don't end up with another Bostwick situation.
Something needs to be done now.
It actually says in the article that the property is not being fined. It can't be until it is a case heard in front of the Special Magistrate. Even then it not an automatic fine.
While the city does often put rolling fines on property, for the most part, they recognize those fines and the actions of the Municipal Code Compliance Department do little good for the residents of the city.
In rare instances, the rolling fines do allow things to progress, like in the case of the Bostwick building where the property was foreclosed on by the city and then sold. But as everyone can see when they drive by, it was way too late to truly save the building and we now get nothing but most of an old facade. In this case, still a good thing. But what the Bostwick and just about every single case of rolling fines illustrates is that first the process from MCCD contaminates a property and makes if far less desirable. And creates an atmosphere around the property that all but guarantees that it will sit and rot for years to come. Then if the property is lucky enough to end up with new owners wishing to restore the structure, the rolling fines generate some small amount of the cost of the process back to the city but far from all the costs. MCCD is actually one of the more wasteful departments the city has.
There needs to be a better system but then MCCD would loss some of their power over the residents of Jacksonville. In the case of structures like Berkman II owned by larger corporations, even MCCD recognizes the futility of rolling fines and so works with the owners to get a resolution to the problems rather than trying to use their usual bulling tactics. That is a good thing because we are far more likely to get a positive resolution this way.
Interesting that the article states that Choate and the developer cannot make the economics work, yet Riverside 200 is progressing. Number of units is similar(190 versus 209 +/-, although I think as apartments the number of units was supposed to be higher in Berkman II). Is this the difference between the cost of steel/concrete high rise versus mid rise wood structure? Does the retail portion of 200 Riverside change the economics of that project? I know the high rise must have a central HVAC and more elevators, but does that impact rental rates substantially? Maybe it's demand. If I worked in the core, I would prefer Berkman, but if I worked outside of DT I think I would prefer Brooklyn. Just not sure I understand why the difference in the economics.
QuoteIs this the difference between the cost of steel/concrete high rise versus mid rise wood structure?
^Yes.
Cutting through all the BS, there are two choices.
1. Finish it as condos, apartments, or hotel. (Or all 3?).
2. Tear it down.
The current owner can only go so long before one choice tops the other.
I assume the land is free of contaminants or they wouldn't have been able to work on it in the first place
If that's the case, why can't they sell such a prime piece of property? Does it now cost more to demo it or finish it than it would do a building from scratch?
That's a pretty small site and if you're going to go vertical, using concrete and steel, it cost more to demo and rebuild from scratch. There's a reason we don't have any highrises going up. They aren't feasible in our market right now. One of the benefits of Berkman II is that there's something like 20 stories of structure already in place. If they are still struggling with numbers, it further validates that the market can't support highrise construction right now. I wonder what the financial gap is. For all we know, it could be in the same ballpark as paying to demolish a structure that size.
Thanks Lake, that makes sense. So as far as you know, the existing structure is in good shape?
Quote from: coredumped on February 21, 2016, 10:28:41 PM
Thanks Lake, that makes sense. So as far as you know, the existing structure is in good shape?
They claim it's in good shape structurally. It's basically concrete and steel.
Quote from: thelakelander on February 21, 2016, 07:43:05 PM
That's a pretty small site and if you're going to go vertical, using concrete and steel, it cost more to demo and rebuild from scratch. There's a reason we don't have any highrises going up. They aren't feasible in our market right now. One of the benefits of Berkman II is that there's something like 20 stories of structure already in place. If they are still struggling with numbers, it further validates that the market can't support highrise construction right now. I wonder what the financial gap is. For all we know, it could be in the same ballpark as paying to demolish a structure that size.
(Heights clearing his throat)....I think, Lakelander, in all due respect, that your post should read "THEY AREN'T FEASIBLE IN THE JACKSONVILLE MARKET RIGHT NOW." Other major Florida cities have high rises in the construction and planning stages moving forward and of course upward; so, something needs to be done, by those leaders in Jax government, to ignite the local market so that "HIGH RISES WILL BE FEASIBLE IN THE JACKSONVILLE MARKET."
Yes, when I mentioned "our market", I was referring to Jax specifically. Florida's other major cities aren't suffering from some of our issues, in regards to downtown revitalization.
http://www.news4jax.com/news/local/jacksonville/berkman-ii-building-still-sore-spot-for-city
Quote from: I-10east on February 24, 2016, 04:23:50 AM
http://www.news4jax.com/news/local/jacksonville/berkman-ii-building-still-sore-spot-for-city
QuoteCity Councilman Reggie Gaffney, who represents the area, said it's one of the biggest complaints he receives from people in the area. He wants something done now.
"I can tell you this: I am beyond being frustrated to the point that I am going to be talking to the mayor's office to see if I can introduce some type of legislation or ordnance to deal with blighted projects downtown," Gaffney said.
hmm...great idea, legislation to deal with blight. If only we had a department that dealt with that. Oh wait....
8 years it's been sitting there? 8 years?!!! That is completely embarrassing for our city.
I keep hearing how bad it looks, how bad it reflects on the city and yet how else was this supposed to be handled? It was tied in lawsuits and now the owner wants to do sell it to someone who can do something with it. I suppose we tax payers could foot the bill to tear the thing down, but is spending that kind of money to make the skyline look alittle better the best use of our limited resources? Would not funding things like the Laura Street trio a better investment and end up doing more positives for Jacksonville than this structure still sitting can ever hurt us?
Quote from: Downtown Osprey on February 24, 2016, 09:12:39 AM
8 years it's been sitting there? 8 years?!!! That is completely embarrassing for our city.
Jax is not alone in this. The Orlando area has an office tower just off I-4 that was never finished (and is rumored to be torn down soon), and downtown Clearwater has a condo shell too.
I was told it would cost at least $3 million to demolish. What's currently in place is roughly $12 million of infrastructure. Evidently, although the structure is sound, there's some extra costs associated with modifying the design from larger condos to smaller apartments.
Quote from: tufsu1 on February 24, 2016, 09:44:17 AM
Quote from: Downtown Osprey on February 24, 2016, 09:12:39 AM
8 years it's been sitting there? 8 years?!!! That is completely embarrassing for our city.
Jax is not alone in this. The Orlando area has an office tower just off I-4 that was never finished (and is rumored to be torn down soon), and downtown Clearwater has a condo shell too.
I don't know if you can equate the Eyesore on I-4 to Berkman. The Majesty Building was proposed by a non-profit and funded by donations. The circumstances of its demise are vastly different than those of Berkman
5 million dollars. The developer asked DIA for 5 million measly dollars several years ago. DIA said no. It's a matter of leadership and priorities.
Quote from: Captain Zissou on February 24, 2016, 09:57:21 AM
I don't know if you can equate the Eyesore on I-4 to Berkman. The Majesty Building was proposed by a non-profit and funded by donations. The circumstances of its demise are vastly different than those of Berkman
Does that change the fact that it's an eyesore? I know, Jax is the only city with problems, that's what people here wanna hear...There's always this 'taking up for every city outside Jax' attitude here, it never fails...
Quote from: downtownbrown on February 24, 2016, 11:58:51 AM
5 million dollars. The developer asked DIA for 5 million measly dollars several years ago. DIA said no. It's a matter of leadership and priorities.
I keep getting the impressions that developers can't develop without governement hand-outs, or did they just ask for infrastructure improvements ?
Quote from: I-10east on February 24, 2016, 12:18:02 PM
Quote from: Captain Zissou on February 24, 2016, 09:57:21 AM
I don't know if you can equate the Eyesore on I-4 to Berkman. The Majesty Building was proposed by a non-profit and funded by donations. The circumstances of its demise are vastly different than those of Berkman
Does that change the fact that it's an eyesore? I know, Jax is the only city with problems, that's what people here wanna hear...There's always this 'taking up for every city outside Jax' attitude here, it never fails...
I'm not taking up for anything. The Majesty Building is still owned by its original developer, who refuses to take on debt and is relying on donations for the additional $14M to finish the project. That's a totally different animal than a building that is currently owned by someone who is actively trying to sell it, but unable to find a buyer due to the financials not making sense. Both are eyesores that may not get finished for a while, or ever, but one is due to a crazy developer's delusions of grandeur and the other is due to market economics not supporting the project.
Quote from: Gunnar on February 24, 2016, 01:32:30 PM
Quote from: downtownbrown on February 24, 2016, 11:58:51 AM
5 million dollars. The developer asked DIA for 5 million measly dollars several years ago. DIA said no. It's a matter of leadership and priorities.
I keep getting the impressions that developers can't develop without governement hand-outs, or did they just ask for infrastructure improvements ?
In a downtown market as unhealthy as DT Jax's, most can't. Without some form of financial assistance, most are better off taking their money and investing elsewhere.
Quote from: thelakelander on February 24, 2016, 02:07:35 PM
Quote from: Gunnar on February 24, 2016, 01:32:30 PM
Quote from: downtownbrown on February 24, 2016, 11:58:51 AM
5 million dollars. The developer asked DIA for 5 million measly dollars several years ago. DIA said no. It's a matter of leadership and priorities.
I keep getting the impressions that developers can't develop without governement hand-outs, or did they just ask for infrastructure improvements ?
In a downtown market as unhealthy as DT Jax's, most can't. Without some form of financial assistance, most are better off taking their money and investing elsewhere.
But shouldn't there be a better way than straight out giving the developers money but instead making the place more attractive to invest in ? Tax credits are one thing, changing rules and regulations another but infrastructure seems like a win-win, too.
Heck, the city could even give property away for free if a developer is going to build something on it (or restore the existing building).
Now, seeing some of the asking prices for downtown ruins or empty lots, I can see where that property would not offer a good ROI in this market, but wouldn't the city giving away incentives serve to artifcially inflate these asking prices ?
QuoteBut shouldn't there be a better way than straight out giving the developers money but instead making the place more attractive to invest in ? Tax credits are one thing, changing rules and regulations another but infrastructure seems like a win-win, too.
Heck, the city could even give property away for free if a developer is going to build something on it (or restore the existing building).
Of course. Several things have to be done simultaneously. However, in the case of Berkman Plaza II, there's not much you can do "short term" to change market conditions to make finishing that project feasible without some type of public assistance.
Quote from: thelakelander on February 24, 2016, 05:20:09 PM
QuoteBut shouldn't there be a better way than straight out giving the developers money but instead making the place more attractive to invest in ? Tax credits are one thing, changing rules and regulations another but infrastructure seems like a win-win, too.
Heck, the city could even give property away for free if a developer is going to build something on it (or restore the existing building).
Of course. Several things have to be done simultaneously. However, in the case of Berkman Plaza II, there's not much you can do "short term" to change market conditions to make finishing that project feasible without some type of public assistance.
that's right. This isn't a normal downtown strategy question. It's a one off budget item to fix the blighted project. Well worth $5M if you ask me.