The Jacksonville Landing: Catch All Discussion

[simms3]

Rather than hijack the December construction update thread (which I essentially already have done), I thought I'd start a separate thread devoted to the Landing, and where we think it should go.

Holiday season is here and work is slow, so I'm just browsing the internet and posting.  The Landing is very intriguing to me, and historically I have berated Toney and team over their decisions regarding the Landing.  I am done doing that, but I do question the logic that goes into the business plan for the Landing (if there even is one).

I recently read the below two articles:

Jacksonville's Feeding Frenzy - The Rise of Independent Restaurants

Jacksonville Tower Troubles Potentially Resolved

The Salty Fig, a Southern gastropub, is the anomaly among the restaurants opening this year. Owners and brothers Jeff and John Stanford started the concept in July as a food truck known by the same name. The restaurant is expected to open in brick-and-mortar space in Riverside at 901 King St. in November.
 
Jeff Stanford said he financed all of the $500,000 build-out cost through private equity. While financing might still be extremely difficult for new restaurants, Stanford said it’s also a good opportunity, as hard costs like rental rates are still at record lows.

I believe that the Landing holds the largest key to downtown's rebirth, and Toney knows it, which is probably why he's trying to hold the city hostage for incentives.  Maybe the city is PO'd at Toney for doing so, maybe the city is just blind and dumb, but the city just approved millions of short and long term taxpayer based funding for a garage for the majority owners of the SunTrust tower, and this garage does not satisfy the agreement it entered into with Sleiman way back when.

The SunTrust tower leasing up/selling out of all its office condos is not the catalyst needed to bring downtown back.  Everbank's relocation won't do so either (it merely takes an office building backed by CMBS out of special servicing).

A lot of downtown office users seem to be placing a value on "cool" and vibrant environments.  If there is no difference between working downtown and the suburbs, except downtown the floorplans are less efficient, the parking isn't free, and the rents are higher...and your employees are still hopping in their cars for lunch and coffee and after work entertainment, then there is no point being downtown.

The Landing, to me, could facilitate a wave of "cool" to come DT.  It could truly be a cool place, serving area workers, tourists, local/suburban shoppers looking for a different experience with lots of offerings under one roof, etc.

It's also centrally located and has a lot of space available for both retail/F&B and specialty office users.

Why the city is throwing so much money at a garage that wastes a prime piece of developable land and violates every zoning code for the area is beyond me.  For $3MM, the city could actually help Sleiman turn the Landing completely around and set it on a path to righteousness that would do more to attract more office tenants downtown than another parking garage (which so far has failed to attract anybody as has been highly publicized here and in the papers).

Faneuil Hall, Ferry Building, Chelsea Market, Westside Provisions District and others literally reinvented entire areas.  Not only are they now considered trophy assets in and of themselves, attracting the biggest names in private equity and public REITs, they have raised the desirability of their respective areas such that those area have greatly elevated retail and office rents compared to their respective markets.

My own company (private equity) has invested in retail/restaurant prospects, and we often find tenants who are backed by local money (a group of dentists is backing a restaurant we are close to signing in a Nashville development I work on).  Financing is tricky, but the city needs to be smarter about how it throws around taxpayer money (we don't have money to keep lights on or mow the grass or keep libraries open, but we'll divert funds for a garage?), and Sleiman needs to suck it up and realize his dream development isn't going to happen automatically...he's going to have to do it himself.

[simms3]

Ideas:

Chelsea Market

One thing that makes Chelsea Market so great is that there are always pop-ups and events going on.  One time Swamp People wanted to do a fundraiser/awareness event, and so they transformed a 15,000 SF space into a literal swamp filled with alligators.  New Yorkers about died.  Land Rover unveiled its Evoque at CM, where their commercial of people taking pictures of the car over the course of a day was filmed.

CM is a world-class money maker and draw.  Many of NYC's best concepts are either born in CM or brought to CM, so they're all under one roof.  The space is also really really cool.  Office tenants pay Midtown Manhattan rents to be there, and they include Google, MLB, Food Network (where the shows are filmed), Oxygen Network and EMI Records.  CM is now the standard by which all other popular urban markets are measured.











Ferry Building

The Ferry Building is essentially a more open and airy Chelsea Market in a different type of building (ferry terminal) without a large office component.  Again, the concept here is to combine all of SF's top known local brands under one roof within convenience to tourists, residents (aka me now) and office workers in FiDi.








Faneuil Hall Marketplace

Faneuil Hall is definitely more on the touristy side and has a lot more chain retailers/restaurants than the above two, but it's an example of an investment made by private capital for destination retail/market type vendors.  It recently sold for $903psf to an old NY firm (Ashkenazy Acquisitions), but was developed by Rouse!








Pike Place Market

Pike Place is a public entity, but is not as pretty and fixed up or historically significant as the above examples.  There are stores like Sur La Table in there, an actual marketplace, and tons of restaurants who prepare food from fresh items at the market.  Definitely has more of a farmer's market feel to it, but 10 million visitors a year aren't lying that it's a cool center of activity.


Warehouse Row

Chattanooga's best restauranteur has a bar and restaurant there.  The best salons, galleries, design stores (Revival designed Eli Manning's multimillion dollar superbowl party put on by Peyton), a mercantile with more food vendors including a bricks and mortar location of a popular food truck, pilates, yoga studios, cosmetics, paperie, etc etc.  Office space above includes private foundations, engineering firms, a law firm, the GSA (state attorney), and other prominent tenants.

The developer turned the old building from a discount barn into a high end destination marketplace that is on the verge of attracting a national credit retailer that has only recently entered Jacksonville with one store and has previously written off Chattanooga as too small.

Overall it's about 300,000 SF (much larger than Landing) and a $35-40MM project for the complete transformation and hefty TI packages for office tenants.



Orchid Shop


Typical hallway

[simms3]

Disclaimer...Sleiman's ground lease might be very inhibitive in that it doesn't allow for a lot of upside in residual or to "sub-lease" out to someone who will pay up for a nicely leased up and performing center, etc.  This would make it stupid to throw money at capital improvements/TI allowances and just float by, but Sleiman's a smart enough guy and I would think he would have structured a deal with the city favorable to him.

Considering all of the entrepreneurial talent and experience in Avondale, Riverside, Springfield, the Beaches, San Marco and elsewhere...there is no reason a single experienced landlord should not be able to harness all of that potential for himself under his own roof, creating a centralized critical mass and allowing all of these guys to avoid dealing with small inexperienced or stodgy landlords, or the hastle of buying/constructing their own space.  Heck, a landlord like Sleiman would only make finding financing for the retailer/restauranteur easier as the debt or equity, whichever it is, has to have faith in the landlord, too (and a larger landlord can also "invest" in the tenant with TI and rent relief, center capital improvements, etc)

Sleiman has a cool space to work with, relationships with private equity and the debt world, tons of experience, and one of the best assets in the city.  Everyone in retail real estate knows who Sleiman is (just met the CFO of WRI at a WRI holiday party and mentioned I was from Jax and he immediately mentioned Sleiman's name).

Assuming his deal isn't so shoddy and allows him some free reign and upside, if I were him I'd start throwing money at that thing and working it.  My architectural vision would be for a more rustic look, obviously better floors, openings to the street, less "formulaic" shopping center elements which Rouse put in and Sleiman hasn't gotten rid of, etc.  I'd throw all of the best names in Jax and in FL/SE a bone to open up enterprise in the Landing.  I'd want to do a couple 10 year deals with credit tenants for credibility, and then open the rest up to "best in class" business owners and pop-up space and kiosk space for proven budding entrepreneurs.

I think while Rouse believes visitors like flashy new things and Hard Rock Cafe, others have found that visitors respond at least as positively to local stuff.  Visitors go to CM and Ferry Building to get a taste of authentic sourdough (not from Boudin) or Amy's Bread or Blue Bottle Coffee (most popular in SF).  They know or want to know what the locals are producing and eating, and they want quality...not overpriced touristy crap.

If Sleiman can get a Sur La Table and an Anthropologie in there, too...wow.

And then if he can just visit the food court at Westfield SF Centre and try to replicate on the 2nd floor...he'll have every office worker in downtown there every day.  Stuff is good, fresh, and local...yet it's essentially a food court.

My firm was almost viewed as a savior along Newbury St...we are a major landlord that tenants can find stability in, rather than a feuding Back Bay family trust with 1-2 addresses or a failing Irish bank, etc.  As we all know, the landlords in Avondale cannot be the best the city has to offer...and apparently some of the tenants/retailers/restauranteurs aren't either.  Sleiman may be a strip mall king, but he has deeper pockets than just about anyone in the city, experience, and he has shown a willingness to invest (when he bought the Landing).

Anyone have inside information on why nothing is ever happening with this place?  Why the city and Sleiman can't come to terms?  How the deal is structured?  If they know of local operators who would open there if give the chance?

[ubben]

River Fit Gym has been a nice addition. Beautiful views of downtown and the river and only $12 a month. Amazes me that some folks are still paying 60-80 bucks a month at the depressing, firetrap, religion-freaky YMCA. Best reason yet to go to the Landing.

[simms3]

^^Wonder how long that will last.  Is that entry rate for 1-3 months and then there will be a hike up to standard gym rates of $40-$60/mo?  They must not pay rent if that is the monthly rate...even a crowded crap gym in a ghetto strip mall can't turn a profit at a rate that low, LoL.

I have changed my tune (regarding Sleiman).  I want the city to not give one more penny to office or parking.  Not one.  Can't force an office come back if there aren't naturally any downtown office users in the city and no general reason to be downtown or bring your business to the city.

Please city, help landlords like Sleiman and Chris Hionedes create real destination places downtown and bring top of the line independent businesses to the core.  Foster small business growth either with incentives and grants to experienced operators or by simply getting out of the way and letting first time operators have a go on their own.  Maybe then residential and tourism will come, and then after that companies will take note and start considering downtown a submarket to be in (not just companies here, but companies looking for interstate relocation opportunities).

It really impressed me that the only Jax name the CFO of WRI mentioned was Sleiman.  Obviously Regency is a competitor to a degree, but Sleiman is someone he thinks of when he thinks of Jax.  Sleiman knows people and he has the experience.  I have heard he's difficult to deal with, but someone in the city needs to suck it up and deal with him and form a positive working relationship so we can get something done with the Landing that will have long lasting ripple effects for downtown.

Sleiman has capital markets relationships on both the debt and equity side.  His relationships probably run deeper than anyone else in real estate save for Hap Stein/Bruce Johnson of Regency or perhaps Peter Rummell, who while chair of ULI, seems to have done zip for his hometown in the real estate/development department (no pet projects from you? none? really? are there no egotistical maniacal developers in this city?).  Sleiman did take two steps forward initially and take on the Landing...he has shown a willingness to try at least a little bit, and he knows he has the big key to unlocking downtown's potential.

Yes Sleiman can do something with the center without his parking garage and so far as I can tell the ground lease deal is not a hold up for anything, but if he's going to play hard ball and hold the city to their own promise, the city should work with him rather than the Parador group (a trio of guys just using the city like it's never been used before...with nothing to show for it).  Sleiman has personal experience at least 10x the aggregate experience of the partners of Parador in doing real estate deals, and considering the Parador guys are using [entirely?] their own money, obviously Sleiman has the deeper capital markets relationships with which to get the ball rolling on redevelopment.  Why the city is running to the Parador guys and running from Sleiman is beyond me...Parador guys just crept up in the last couple years without an actual deal or promise from the city...Sleiman has been asking the city to honor its end of an actual deal they made with him for the better part of a decade now!

I can see why Sleiman is playing hard ball.  I bet if the city steps up and Sleiman gets rolling on the Landing and then blows his proforma out of the water, you'll see Sleiman create a 2nd business focus on destination intown retail.  Can the city please get the man going?  He's stubborn and won't proceed until you honor your deal with him or at least make him happy.

[Spence]

^^^Simms3
I remember all the seemingly genuine enthusiasm and real excitement felt in the air as Mr.Sleiman delivered his original "It's About TIME!" presentation to the press.
I was there.
His architectural renderings and scale models were eye opening and truly attention grabbers.

An on-site hotel on the west end near the (then) recently revamped Times-Union Center, multi-level parking near the Alsop/Main St. bridge, and like you (and many others) have mentioned; strategically opening some of the ideally situated key lease spaces/store fronts to the street (but not necessarily ALL of them).

My LEAST favorite idea (for reasons of associated costs) was removing a slice of the structure at the south end of Laura St., even though doing so would provide an attractive, enamoring view of the River and Southbank, sailboat masts at the marina connected to River City Brewing Co., leading visitors to cross to Friendship park and possibly reasoning to choose OUR Downtown for any number of uses.

You are right, the Parador partners garage does absolutely NOTHING to enhance the way one experiences our inner core.  Now a streetcar/skyway transit station, ground level retail, over 2,200 parking spaces, AND a covered pedestrian bridge into the Landing may change my mind.

[fsujax]

I have been a member at that gym ever since it was Golds over on Forsyth St. Pam the lady who owns it now, has kept the rates low ever since she took over, downsized it and moved it to the Landing. It has been over three years now, rates are still the same. She does not even turn the air in the summer time! fans and open doors!

[thelakelander]

Here is a look at Sleiman's past plans for the Landing:



This rendering illustrates the concept of relocating the food court to the storefronts that back up to the green space where the Jackson statue used to be.  This would turn the intersection of Hogan and Independent into an activity center and allow the upstairs food court to be converted into addition sit-down restaurants with a river view.



^Sleiman presenting the plan to open the courtyard up to Laura Street.



A model of the plan Sleiman was presenting.

[cline]

I think The Landing's rejuvenation starts with Fuddruckers.

[WmNussbaum]

I think the Landing's rejuvenation will begin with getting the criminal element the hell out of there. When was the last murder or near murder? Yesterday? Heck I'm going to organize an insurance company with a kiosk right outside the Landing and offer a "mayhem policy" that provides benefits in the event the policyholder is beaten, robbed, or killed in or within 100 yards of the Landing perimeter. Of course, given the history, the premium will have to be on the pricey side.

Seriously, when the Landing opened, I had high hopes for a renaissance since I was then an owner of a couple of downtown parcels. The tenants were upscale, the second story food court was full on both sides of the central aisle, and it all imploded before long. The developer was the same company that developed  Faneuil Hall, the Inner Harbor at Baltimore, etc. They hung in there a fair amount of time and then hit the silk. if you ask Tony who is the smartest businessman he knows, he might say The Rouse Company - sort of like Mr. Khan saying it's Wayne Weaver.

Months ago I posited that downtown won't go anywhere until someone with money and a real set of cojones has a vision and spends the money to make it happen. The City will have to be involved too, but I only hope it has the sense to make sure the new guy on the block has some skin in the game, i.e., something to lose if his vision goes awry, so the the City doesn't take the entire loss.

[simms3]

I think The Landing's rejuvenation starts with Fuddruckers.

Disagree...rejuvenation doesn't start with a national chain burger franchise whose parent is in financial distress.

...

WmNussbaum, really?  (to your first points)...I think Toney knows he has good real estate with potential.  I also think he has a good deal with a cheap ground lease that can allow him to sit back and hold the city to its word to provide parking (though I bet if Toney finds a partner willing to do something along the lines of what I suggest, which would not require a new parking garage with dedicated spaces...he'd be happy with plain old city incentive assistance).

...

The plans for the Landing were so typical for mid-2000s.  I find them boring and highly outdated now, and certainly not "authentic".  Rendering shows Panera, a brand that should be kept out of a rejuvenated Landing at all costs.  I would get rid of current paint scheme, brown up the roof a bit, and go for more natural finishes.  Keep it as local and high end market oriented as possible and be very selective with national tenants who may one day desire space there.

I don't think incorporating "greenspace" is all that important given the location...I'd maximize use with as much "usable" public space as possible.  Grassy areas are a waste there and mid/high-rise condos and offices on top will kill the vibe that the Landing could have (i.e. overkill).  It should be a public market that puts the best of the best of Jacksonville under one roof, has an intense pop-up program, breeds new businesses, draws crowds with events, and somehow hearkens back to the days of all the waterfront piers and shipping activity that used to define the area...that way the city will be stepping back to its roots and offering something unique and interesting to both residents and tourists.

[tufsu1]

I think the Landing's rejuvenation will begin with getting the criminal element the hell out of there. When was the last murder or near murder? Yesterday?

that's a bit more perception than reality....I'm down there several times a week and rarely feel unsafe.

[tufsu1]

I think The Landing's rejuvenation starts with Fuddruckers.

Disagree...rejuvenation doesn't start with a national chain burger franchise whose parent is in financial distress.

dude...it was a joke...try looking through all the Landing/Fuddruckers threads

[Pinky]

I think the Landing's rejuvenation will begin with getting the criminal element the hell out of there. When was the last murder or near murder? Yesterday?

that's a bit more perception than reality....I'm down there several times a week and rarely feel unsafe.

x100

I live two blocks away from the Landing, and routinely walk all over downtown at differing hours of the day and night; I've never been "threatened", nor have I ever seen any misbehavior of any sort aside from the occasional Panhandler.  (And even they're just a nuisance, not at all "threatening".

I'll bet that Downtown's actual crime stats are way below other parts of the city.  Anybody got stats by neighborhood?

[kreger]

The Landing is just plain janky. You could put 20 parking garages all around it and it wouldn't do a damn thing for it. The same is true for Hemming Plaza, removing benches or tables won't do a damn thing for it. If you build it, they will come. People turnout in the thousands when something good is going on downtown. They all find parking.
The solution is to remodel and build excitement. The people will come. City hall should be returned to what it was built for and the retail corridor should continue all the way down to the landing.