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As opposed to providing street retail within the project now, the developer will be allowed to add retail at an undetermined later date. That date will be after the nearby Suntrust Tower achieves 65% occupancy. Occupancy currently stands at 20%.
With this in mind, the City of Jacksonville will give Parador Partners $3.5 million for constructing their 500 space parking garage. In return, Parador will allow 200 daily and 375 night and weekend public spaces on a first come, first serve basis to benefit the Jacksonville Landing and other surrounding commercial businesses and public venues.
The Downtown Development Review Board Staff recommends approval for the following deviations:
1. Deviation from Section 656.361.16 Off-Street Overlay to not provide required 50% retail for the building frontage on Bay Street until retail market conditions warrant subject to DDRB final approval of conditions 1 and 2.
2. Deviation from Section 656.361.18 Transparency to not provide the required 50% transparent design requirement between the height of 2 and 10 feet on 80 feet of the Bay Street building façade frontage until retail market conditions warrant subject to DDRB final approval of conditions 1 and 2; and.
Final approval for DDRB Application 2012-006, subject to the following conditions:
1. In lieu of seeking a deviation to Section 656.361. 16 Off-Street Overlay Requirements to reduce the commercial/retail requirement of 50% of street frontage on Hogan Street, the applicant shall agree to provide building tenant occupancy monitoring reports for the Sun Trust Tower to the DIA Board staff on a semi-annual basis with reports delivered in June and December of each year after DDRB approval of Phase 1 of the project until the 65% tenant occupancy rate of the Sun Trust Tower located at 76 South Laura Street is achieved. Within one year after a 65% occupancy rate is achieved, the applicant shall commence construction of the DDRB approved plan for the commercial/retail space and complete the space with active tenants in place within 12 months of commencement (Applicant’s Commercial/Retail Mitigation Strategy).
2. The applicant to submit to the DDRB Staff for review and approval the architectural and landscape improvements addressing the security and loitering issues for the transition space connecting the proposed garage with the entrance to the Sun Trust Tower prior to permit approval.
Future retail build-out if the adjacent Suntrust Tower reaches 65% occupancy.
Today's 2:00 p.m. Downtown Development Review Board (DDRB) meeting will be held at:
Jacksonville City Hall
117 West Duval Street
1st Floor, Lynwood Roberts Room
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simms3
October 11, 2012, 11:00:21 AMNo renderings from the river side/standard Jax postcard angle?
thelakelander
October 11, 2012, 11:05:54 AMNot surprisingly, no. Also, no renderings or massing of the proposed future retail/plaza at the high profile intersection of Independent Drive and Hogan Street. I've always thought that this intersection had the potential to become one of the most vibrant spots in downtown. Now, I don't know.
fieldafm
October 11, 2012, 11:09:22 AMParador has been trying to find a hotel to construct on Sisters City Plaza for some time now.
Ocklawaha
October 11, 2012, 11:17:36 AMSo they'll build it, sit on it until Suntrust gets about 50% occupancy then unload it to a 'new' corporation that will not be bound by the legal strings.
That hotel on Sisters City Plaza will have a crazy small footprint! Humm? Maybe 10 rooms wide and 70 floors high? Somehow I doubt it.
Ocklawaha
October 11, 2012, 11:19:32 AMThis would be a golden opportunity to bump it up one floor, and dedicate a high ceiling ground floor to our streetcar system, visitors center and maintenance. Okay, I can dream right?
fsujax
October 11, 2012, 11:23:41 AMDDRB will approve this, but give Aetna a hard time about their sign. I really think this group is becoming useless. Except for Flagg. He seems to be the only one really intent on holding these developers to the fire.
tufsu1
October 11, 2012, 11:27:00 AMmaybe they just don't like purple
fieldafm
October 11, 2012, 11:37:14 AMWhen you close off the dead headed street in b/w the plaza and the foot print bleeds over in the area facing Independent Drive on the garage's parcel... you actually get a decent footprint for a hotel with a bottom floor restaurant on the corner of Hogan/Independent.
Agreed. The priorities downtown are completely out of whack.
The architect is smart not to include it. Otherwise, at the garage's current height it sticke out its almost 20 feet above the Landing... so looking at the Northbank from Friendship Fountain, you'd see a beautiful parking garage dotting the skyline.
I don't have a problem with a parking garage... but subsidizing half the cost to build something that goes below code and thereby creates dead space downtown... while simultaneously using the money that was earmarked to satisfy a parking obligation to the Landing that is more than two decades old, to subsidize it's construction... well, I have a big problem with that.
CityLife
October 11, 2012, 11:38:02 AMSomebody please make sure the DDRB makes the retail provision stay with the property and carry over to future owners.
thelakelander
October 11, 2012, 11:41:16 AMBtw, Sleiman continues to claim that this won't satisfy the city's Landing parking obligation.
JaxArchitect
October 11, 2012, 12:01:02 PMTo build this garage on such a prominent site without meeting the retail requirement is ridiculous.
And I'll restate my opinion that the building design is horrible. They changed the colors a bit, added some cornice molding at the top and changed the design of the vehicular entries in an attempt to make it look more "historical" (I guess). They also appear to have eliminated the outward cant (slope) of the stair towers on the corners; that's a minimal improvement at least.
This design would get an "F" in any architectural design course. Why do we have a DDRB if they allow stuff like this to get built downtown. This would never be approved in the majority of other large comparable cities.
Tacachale
October 11, 2012, 12:21:28 PMThis may be the worse publicly funded decision made downtown in years, and that's saying something.
simms3
October 11, 2012, 12:25:09 PM^^^It's not the garage in and of itself that would not be approved in other cities (garages get built all the time in many different permutations/forms), it's the fact that no other city in its right mind would approve a garage with such variances to go on its most prime piece of dirt/premiere postcard site AND/OR essentially subsidize it with City funding sources.
Also, retail in most garages makes no sense, yet cities are strictly enforcing retail's inclusion in walkable areas. Reason why most garage/retail combinations make little sense? Most simply because standalone garages today are being built on the peripheries. I guess mandating retail is "planning for the future."
We can essentially face the fact that the city is making whole a group of like 3 guys invested in SunTrust and trying to eliminate its feud with Toney Sleiman so it can have one less thing to worry about (which it apparently has failed at). If the City were an attorney or broker and the taxpayer the client, we could sue or break contract for breach of fiduciary responsibility here. Nothing has proven this "investment" on the city's part will benefit the City and therefore the taxpayer in any way (tangibly or intangibly).
L.P. Hovercraft
October 11, 2012, 12:38:04 PMAnyone here with mad Photoshop skills that could quickly knock out what a future beauty shot of Downtown's skyline with a fugly new parking garage hovering over the Landing that could be forwarded to the DDRB with a note opposing this project?
simms3
October 11, 2012, 01:00:37 PMIf it's only 20 ft above the Landing it may actually not be that visible considering how far back from the physically riverfront it is.
Dapperdan
October 11, 2012, 02:13:31 PMWhy does it not fulfill the parking promise? This adds 200 daily spots. The current Landing lot is never full during the day unless a special event is happening. It also adds 375 spots for night. This sounds like a good amount of parking. How much more do they need?
copperfiend
October 11, 2012, 02:15:06 PMMain St Pocket Park?
tufsu1
October 11, 2012, 03:01:19 PMthe agreement is for 300 spaces...but the main reason Sleiman doesn't like it is that it isn't his garage...so he doesn't make the profits!
dougskiles
October 11, 2012, 04:48:04 PMIn just the same way that Parador needs dedicated spaces to lease the Suntrust building, Sleiman needs dedicated spaces for the national tenants he is trying to attract to The Landing. Like it or not, that is always an issue in retail development.
thelakelander
October 11, 2012, 04:56:48 PM^Good point.
This would be worse. The park came from a $800 FDOT grant. Other than leveling out some retaining walls, you could easily put a building on it. This garage requires $3.5 million from the city to make the numbers work.
dougskiles
October 11, 2012, 05:43:32 PMI keep hearing that even with the $3.5 million, it doesn't work financially. This all may be for show. Wouldn't be the first time.
acme54321
October 11, 2012, 09:12:27 PMDid they give final approval?
thelakelander
October 11, 2012, 09:44:00 PMyes.
simms3
October 11, 2012, 11:12:20 PMIn addition to demographics, landlord incentive packages, cotenancy, market draw, access, landlord relationship, broker relationship and input, appeal and attractiveness of site, foot traffic, etc etc.
Parking is not going to make or break the Landing. The success of downtown overall and Sleiman's own relationships and experience, as well as creativity, will make the Landing a success. Worked on worse retail locations myself where the team was able to put in a few nationals and many of the best local/regional tenants. Nationals is doubtfully the route to go, it won't draw shoppers (why would they go to Landing when same stores are scattered about town...and forget about top tier retailers forgoing SJTC to test out the Jax market at the Landing!)
Anyway, not saying I could do a better job making the Landing somewhat of a success than Toney, but the guy is just looking for avenues to lay blame elsewhere so that he can't be seen as a failure here. If I were Toney I would have done something to get Black Sheep and other restauranteurs in town to locate in the Landing. Would have more "creative" local events that aren't beerguzzling fests for college football fans who care not where they drink as long as there are TV screens and tall boys, make some impactful yet cost effective aesthetic improvements, improve exterior to draw people in rather than shut world out, etc etc. I don't think he's the right guy for that asset.
Jax ain't a big city like Boston, but I work on a portfolio that consists of approximately 15% of GLA on Newbury St and a few buildings a block off, and believe me...having parking at all would kill that retail destination. Worked on a project in Chattanooga at one point for 6 months...about 300,000 SF of retail and office (larger than Landing). Parking on site with some surface and 1.5 level garage, but not much. The dedicated parking became an issue for tenants such as a yoga instructor who held classes and needed a small block at certain times, or our token restaurant there, which needed parking at night (not for lunch). Even there, a lot of business was walk-up and lots of office workers lived nearby (plus TVA across the street was a boon once word got out about the mercantile food court level). We hosted fashion week there, all the private schools and Junior League etc held events there...so we made publicity that way, food trucks every Tuesday, pop-up shops, etc (and working as an outsider in Chattanooga is A LOT more challenging than being the star developer in your own hometown...the city actually worked against us and viewed us as the big bad firm from Atlanta trying to do as we please in their city). Candidly the office component is a huge success while the retail component struggles (but is still leagues better than the Landing could be even at full potential).
Ocklawaha
October 11, 2012, 11:18:59 PMAs much as I hate the damn thing and the mindless little cluster of Homo habilis and their bipedal friends that approved it, I do think we could make some lemonade out of this lemon. That pass through courtyard could easily be turned into a festive themed market, filled with baskets, coffee's and interesting kitsch. Perhaps something along the lines of Stephen dare's 'Huguenot Arch,' and a French market. I'd even give it a street name al la St. Augustine's Palm Row, Artillery Lane, Bravo or Aviles Street.
LOS ANGELES has their Olvera Street which demonstrates the concept:
thelakelander
October 11, 2012, 11:19:29 PMSimms, I think the national retail Doug is referring to is dining/entertainment oriented.
simms3
October 12, 2012, 12:13:48 AMGotcha. Like a Ten Pen or Lucky Strike? Every development I know of in struggling downtowns (like Houston's Pavilions development) has these national dining/entertainment tenants and none of these developments are panning out at all. wasn't working super-well with the particular mix that was at Atlantic Station either, and new owners have trended local or new-to-market (very expensive). They obviously have a lot more going for them fundamentally than Sleiman and institutional backing.
Wow development 101 issue here that we have run into ourselves on some of our opportunistic investments in riskier small markets like Jax.
Choices:
1) IRR driven - cram tenants in there at any cost and no attention to detail, buy for nothing then sell quickly for a good amount...obviously this is not Sleiman's plan, though it probably could have been in '07 back when retailers were over-expanding and people were idiots and would have bought 200,000 SF of retail on a ground lease in downtown Jax.
2) Multiple driven. Lots of money upfront and babying the deal, lots of creativity necessary, decent hold and big pop for all the hard work at the end. Doesn't seem to be his plan, plus not really possible with any retail deal in DT Jax. This is like Pavilions in Houston or a lot of development deals, but most in riskier submarkets (i.e. Sunbelt) aren't panning out.
3) Dividend-paying. This is a 100% leased Publix-anchored center with major term and no competition, obviously not Sleiman's deal here.
4) Make your money back. Same strategy as multiple...work REALLY hard. LoL Is Sleiman working this center hard? I can't really tell, but it does not seem like it.
Honestly, in similar deals I have worked on we are gambling over our hold by buying tenants, paying a lot for marketing and events, paying a lot to make the asset a really cool space that appeals to local and sophisticated crowd and praying that we can make our desired return on exit. Problem with this is that very few buyers are going to pay more (i.e. lower cap rate) for your hard work in a risky market/submarket like DT Jax. So you put all this money into it (which Sleiman is not doing) and you hope that your tenancy and term fits the same profile that can usually drop your exit cap from 10% to 8% anywhere else to make all of it worth it. Say you put $200psf TI for a new restaurant (basically standard for nationals going into a place like Landing) and you get $20 net rent out of it. 10 year payback, non-discounted (and for Landing the discount rate should be like 20%, making it impossible to catch up ever).
Just saying I can't tell what Sleiman is doing with the center...he isn't following any standard protocols here and maybe he realizes there is no return for him so he's just avoiding the inevitable and trying to protect his reputation in the meantime. I think a rare truly great team on all fronts (marketing, creative, landlord rep, developer, property mgt, etc) can do something with the Landing and come out at least making their money back. It is possible.
dougskiles
October 12, 2012, 06:18:24 AMThe tenant demanded high parking ratios drive me crazy. Lakelander is right, it would be mostly dining/entertainment at the Landing, however, I see it in other developments, too.
Having adequate parking won't ensure a successful commercial development. Not having adequate parking can make a commercial development fail.
In my perfect world, we wouldn't build a new garage for the Landing. We would provide the designated parking in an existing facility. Same with Parador. Then, instead of spending $3.5 million on another parking garage, we would put that money toward a fixed transit system that provides a viable alternative to driving.
thelakelander
October 12, 2012, 06:26:58 AMI don't know what Sleiman is doing with the center now but he only purchased it for $5 million. It cost Rouse $37.5 million to construct. That being said, it's not like the center is empty right now. Nearly all the riverfront/interior courtyard spaces are leased. The food court is empty but I'd argue they need to completely empty it out and consider converting that space into another large scale riverfront dining operation. With that said, I don't know if he needs to radically change the tenant mix there now.
What really needs to be done is better utilization of the existing space so that synergy between it and surrounding uses can take place. Better utilization of space would also save/generate Sleiman money. If you want a food court, it should be relocated to the west side of the mall, overlooking an outdoor plaza facing Hogan & Independent, Suntrust Tower, this garage, Omni, and the performing arts center. Right now, that's a lot of non-leasable space (with a riverfront view) on that second floor that someone is paying the air conditioning and maintenance bill for.
Also, they don't necessarily need to tear the middle of the structure down but it wouldn't hurt convert the center into an outdoor space (perhaps covered to keep retrofit costs down) , opening the courtyard up to the Laura Street corridor. Looking at the interior mall spaces, it probably wouldn't hurt to completely lose the interior enclosed mall. There's no money made air-conditioning all that interior common space square footage. Plus, the idea of filling an interior mall with specialty shops (with limited visibility) and no anchors, makes little long term sense, imo.
You could probably reshape a chunk of the east mall interior into a larger tenant or two and reconfigure/create a few specialty retail spaces along the open connection between the courtyard and Laura Street.
thelakelander
October 12, 2012, 06:29:41 AMYes. Unless, there's a ton of foot traffic, the national tenants are typically going to require dedicated parking, whether its in downtown or the burbs. There's little Jax can do about that at this point but find creative ways to accommodate their site location requirements.
copperfiend
October 12, 2012, 08:10:07 AMTrue. I just cringe everytime I walk by that place.
simms3
October 12, 2012, 08:15:37 AMIf I were Sleiman I wouldn't do anything to the Landing, at all. That's the problem. He's doing well by putting nothing into it. $5M basis for 200,000 SF filled with at least temporary tenants? He probably doesn't even have debt on this thing and all he pays is a cheap COJ ground lease. This alone answers our question. It's too risky to do anything with the center, but he doesn't want that to get out in public (that it was his plan all along to sit on it...doesn't do much for the reputation).
I have to quit harping against him because any owner in its right mind would do the same. Parking, no parking, bla bla bla he's going to sail along as he has. Now it makes sense why a strip mall developer would buy the Landing (wish we had looked at that deal...we would have bought it at $6M!, haha).
thelakelander
October 12, 2012, 08:23:34 AMRouse simply wanted out of Jax, made the deal and bolted out of town.
fsujax
October 16, 2012, 10:28:36 AMToo bad we cant this kind of parking garage in Jax. Instead we get status quo.
http://www.theatlanticcities.com/neighborhoods/2012/10/16-parking-garages-worth-looking/3564/
JeffreyS
October 16, 2012, 11:00:47 AM^We could have had those types of design. Parador was going to build whatever they were required to build. DDRB just sold our asses out.
fsujax
October 16, 2012, 11:02:24 AM^^all except two of them.
vicupstate
October 16, 2012, 01:08:46 PMAs I recall, he doesn't have to pay even that, until the parking is provided.
JayBird
December 28, 2012, 04:08:53 AMIn my email today, thought I saw headline from JBJ that a financial group was leasing new space in SunTrust Building. Which brings up the question again of how will COJ know when the 50% threshold is met? Also, if it has been met with this new office lease, does Paragon have a clause where they back out because they were planning to build retail in 2-3 years down the road? (which I don't believe, but it sounded nice on paper)
thelakelander
December 28, 2012, 07:58:53 AMIs it true that this new Suntrust lease is simply moving across the street from One Enterprise Center?
fieldafm
December 28, 2012, 08:20:18 AMSort of.
Like all mortgage companies right now, their employee count is expanding. They are increasing headcount and they are leasing additional office space in the Suntrust Tower to have capacity for this expanded staff. The Enterprise Center space will still be leased/occupied.
That being said, Parador just acquired additional office condo space (previously under foreclosure) within the Suntrust Tower. Without this additional space, I'm pretty sure this new Foundation Financial lease would represent 50% occupancy of the previously acquired space when they applied for the tax incentives... meaning that they should build the retail portion of the parking garage when they start construction of said garage.
Who wants to take bets that they will now say occupancy is under 50% b/c of the newly acquired office space, and therefore the retail portion of the garage will wait??
As previously mentioned, the Advance Disposal HQ relocation (now going to Nocatee) was the other tenant that Parador dangled in front of the former JEDC for their parking garage incentive. AD got a better $/sq ft lease rate in St Johns County with lower buildout costs(which more than made up for St Johns County lower incentive package).
tufsu1
December 28, 2012, 08:46:42 AMI'd like to bet they don't build the garage at all
dougskiles
December 28, 2012, 08:49:45 AMWas it 50%? For some reason, 70% sticks in my mind.
I was in Charlotte last week and snapped a few pictures of cool parking garages. I think the express ramp is an interested feature. It also allows more flexibility in the interior layout - which would make space for deeper retail on the first floor. I'm not saying that this should be the prominent feature facing the river, however, it could anchor one of the other corners.
Here is another garage with a more interesting facade and successful ground floor commercial space.
tufsu1
December 28, 2012, 09:00:53 AM^ and that last parking garage anchors what is now the northernmost station on the LYNX light rail line
fieldafm
December 28, 2012, 09:09:30 AMMy apologies, we are both wrong... it's 65%.
Still the premise bears contemplating. What consitutes the 65%? The original space Parador controlled when they originally applied for the incentive, or the aggregate ownership level that includes the new space they have since acquired (or future acquistions)?
I think it would stink to high heaven if they count the new space.
You don't even have to go as far as Charlotte to see that. The garage (with ground level retail) bounded by Adams/Forsyth/Hogan has an express ramp. You could easily extend that ramp out in the Parador garage at the corner of Hogan/Independent which would allow for better depth for the retail portion (it's not the available square feet that is the problem-which kept being highlighted at DDRB-it's the depth that limits the type of tenant that would show interest in the space-case in point the Everbank Building on Riverside Ave) along Hogan and Bay.... however, future plans call for Parador to buy the Sisters Cities property for another development so I'm quite sure this is not something they want to do b/c a ramp extension will limit this future site plan.
Again, don't be fooled into thinking the developer is as pro-downtown as the press releases make them out to be.
Noone
December 28, 2012, 09:41:35 AMThe parking and the debt and guaranteed return given by the city for Metropolitan Parking Solutions and this new DIA along with the new legislation 2012-674 needs to be factored in evaluating any new parking related project.
fieldafm
December 28, 2012, 10:20:17 AMNoone makes a good point.
How is the taxpayer assistance the City gave Metropolitan working out?
Why then should taxpayers subsidize a poorly designed parking garage on prime real estate?
dougskiles
December 28, 2012, 10:30:21 AMI much prefer to see city money fund public infrastructure projects that are designed to create an environment attractive to business. If we are going to incentivize private enterprise, it should be in the form of tax rebates upon performance (certain number of residential units created or high-paying jobs created).
cline
December 28, 2012, 10:47:55 AMAgreed. We can't keep selling the farm up front.