DIA rejects 3 offers to buy vacant LaVilla building

[thelakelander]

Offers well below appraisal, but developer says site will require costly renovation....

Full article: https://www.jaxdailyrecord.com/article/dia-rejects-3-offers-to-buy-vacant-lavilla-building

[thelakelander]

"The building is falling apart," Caldera said when questioned by DIA board member Brenna Durden about his offer.

"The only way this project is going to be viable is to get the property at a low purchase price, because we're going to have to invest a lot," Caldera said.

Durden suggested scrapping all three bids.

"The purchase price isn't good," Durden said, who was backed by board members Ron Moody and Braxton Gillam.

"We'd like to get it on the tax rolls, but we also have a responsibility to the taxpayers," she said.

The largest offer for the property was $10k. The DIA will never get anything close to their $180k appraisal price. However, the responsibility to the taxpayers was already lost when millions in public funds were used to raze the neighborhood in the mid-1990s. In addition, it appears no money or maintenance has been put into this property since COJ acquired it for $34k in 1994. True value is worth only what the market is willing to pay for it.

[jaxnyc79]

"The building is falling apart," Caldera said when questioned by DIA board member Brenna Durden about his offer.

"The only way this project is going to be viable is to get the property at a low purchase price, because we're going to have to invest a lot," Caldera said.

Durden suggested scrapping all three bids.

"The purchase price isn't good," Durden said, who was backed by board members Ron Moody and Braxton Gillam.

"We'd like to get it on the tax rolls, but we also have a responsibility to the taxpayers," she said.

The largest offer for the property was $10k. The DIA will never get anything close to their $180k appraisal price. However, the responsibility to the taxpayers was already lost when millions in public funds were used to raze the neighborhood in the mid-1990s. In addition, it appears no money or maintenance has been put into this property since COJ acquired it for $34k in 1994. True value is worth only what the market is willing to pay for it.

Lease the land for next to nothing with an accompanying development agreement to the counterparty proposing the most compelling land use and with the depth of proven and documented resources to actually get it done in a reasonable timeframe.

[MusicMan]

The response from Durden perfectly frames the incompetence of the DIA Board members. 

They just don't get it. The RFP was put out. 3 offers came min. They represent what Buyers are willing to pay, TODAY, for the parcel.

Within a few short years it will be accurately assessed at over $500,000 based on the renovations, which EVERYONE agrees will take

several hundred thousand dollars.  It's this type of situation that prevents projects from moving forward ALL OVER DOWNTOWN AND ALL

AROUND JACKSONVILLE. Insisting on ridiculous prices.  I would love to see the comparable SOLD props the city used in arriving at the

valuation. Arms length transactions where Buyers purchased shells of buildings at this price per square foot. I'm betting there aren't any.

[Bill Hoff]

Pretty frustrating.

[jaxrox]

Lake&Music, excellent observations with historical knowledge that I wouldn't know otherwise. This place has potential. Bill, totally frustrating, agreed! All three of those prospects aren't bad ideas, but DIA says no?!?
Once again, greed shall deter progress and will likely destroy another historical building. Arg.

[Jim]

And leaving it sitting there is only going to cause further deterioration, further reducing the "value". 

You had 3 options to put it on the tax rolls.  You failed.  And if the city only paid $34k, then a $10k loss on the sale is peanuts compared to the millions they hand out for future tax incentives for other projects.   

[jaxnyc79]

"The building is falling apart," Caldera said when questioned by DIA board member Brenna Durden about his offer.

"The only way this project is going to be viable is to get the property at a low purchase price, because we're going to have to invest a lot," Caldera said.

Durden suggested scrapping all three bids.

"The purchase price isn't good," Durden said, who was backed by board members Ron Moody and Braxton Gillam.

"We'd like to get it on the tax rolls, but we also have a responsibility to the taxpayers," she said.

The largest offer for the property was $10k. The DIA will never get anything close to their $180k appraisal price. However, the responsibility to the taxpayers was already lost when millions in public funds were used to raze the neighborhood in the mid-1990s. In addition, it appears no money or maintenance has been put into this property since COJ acquired it for $34k in 1994. True value is worth only what the market is willing to pay for it.

Just to play devil's advocate: Market sentiments impact prices, and prices change.  Portfolio Managers often hold on to assets and then off-load those assets when the marketplace will bear out higher prices.  Not to say the city has the best track record on Real Estate Portfolio Management, but the city is under no real pressure to sell the assets into today's marketplace where the properties fetch prices that barely clear $10,000.  If it has a reasonable expectation that other catalysts may improve the attractiveness of this block of buildings, then why wouldn't it wait?   

[thelakelander]

Imo, the city shouldn't be in the real estate development game. Especially when boards that are randomly appointed are in charge of making the decisions. Then, in this particular case, the city has been sitting on the property since 1994. How long is too long to wait? Also, what's the overall goal? Using underutilized assets to stimulate downtown redevelopment as fast as possible (increasing property tax revenue) or being a slumlord waiting for a pay day that may never come? In this case, we're our own worst enemy, if revitalization is the primary goal.

[lowlyplanner]

I think the City is short-sighted to focus on the purchase price.  The real money is in the ongoing tax revenue.

A building assessed at $600,000 will return around $12,000 per year to the City forever.  It will also raise the value of other nearby properties and encourage their renovation.

[jaxnyc79]

Imo, the city shouldn't be in the real estate development game. Especially when boards that are randomly appointed are in charge of making the decisions. Then, in this particular case, the city has been sitting on the property since 1994. How long is too long to wait? Also, what's the overall goal? Using underutilized assets to stimulate downtown redevelopment as fast as possible (increasing property tax revenue) or being a slumlord waiting for a pay day that may never come? In this case, we're our own worst enemy, if revitalization is the primary goal.

Not sure where this block is located relative to the new residential projects coming online in LaVilla, but once the LaVilla projects and a few others are actually completed and occupied, shouldn't that drive some demand for retail/commercial uses?  I'll be the first to say that much of downtown Jax is a wasteland, but $9k or $10k seemed quite low to me.  Market Timing and Buyer Targeting are huge when selling properties.  Every day, it feels like private pensions and private equity firms plow money into far-fetched endeavors.  If we get these properties in front of the right buyers with dry powder to throw around, they'll see downtown properties adjacent to the Business District in a coastal NFL city in Florida, and surely pay up from $9-10k.  Again, I don't know all that was involved in putting these properties out to bid.  Arguably, a bit more active marketing of these properties should be able to fetch a great deal more, even on a net basis.       

[Tacachale]

^I'd take a lowball figure if they're also committing to spend money on fixing up the building. Several grand in taxes every year will overtake the $34k the city spent on the property pretty quickly. But at that point I'd want to see a pretty solid project. No need to just give away the property if all they're willing to do with it is some boring office space, which there's already a glut of.

[Jim]

Imo, the city shouldn't be in the real estate development game. Especially when boards that are randomly appointed are in charge of making the decisions. Then, in this particular case, the city has been sitting on the property since 1994. How long is too long to wait? Also, what's the overall goal? Using underutilized assets to stimulate downtown redevelopment as fast as possible (increasing property tax revenue) or being a slumlord waiting for a pay day that may never come? In this case, we're our own worst enemy, if revitalization is the primary goal.

Not sure where this block is located relative to the new residential projects coming online in LaVilla,

2 blocks to Houston Street Manor, 3 to Lofts at Monroe and 6 blocks to phase 2 of Lofts of LaVilla.   Also, this location is directly across the street from the courthouse.

While that may sound enticing, they need to give up a few things to help move things long.  Then get big money for more worthy holdings later on as the market demands them.

[thelakelander]

It's all fool's gold.  The new projects going up in LaVilla aren't going to result in this particular property increasing in value. In fact, it's declined in value due to no upkeep during 23 years of public ownership. No matter what goes up around it, it's still a property with no off-street parking, no on-street parking, no chance of adding either, that's collapsed on itself, due to neglect by the owner. If COJ was really concerned about sales prices, perhaps the prudent move would have been to maintain the building, so it would at least have value. That didn't happen, so all you have at this point is four walls to work with. If a group is willing to put their money into fixing up this site and returning it to the tax rolls, COJ should take whatever the market is willing to pay.

[heights unknown]

To get a little off topic, I remember this building, or buildings. The one on the left was a barber shop and I used to get my hair cut there when I was in the Navy, towards the end of my Navy career from 1990 to 1994. Yep, my barber was in the 1st section of the building on the left. Memories. I hope they find a good use for the property because the building or buildings are no good, wore out, and should be demolished; they are too old, decimated and are of no use to anyone now. The buildings were old and wore out back then, so I know they are uninhabitable and not useful to anything or anyone nowadays.