Author Topic: Creating a Better Urban Core and Inner Northside  (Read 6286 times)

tayana42

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Re: Creating a Better Urban Core and Inner Northside
« Reply #15 on: September 18, 2012, 12:55:14 AM »
Get that mobility fee reinstated.  Now.

Ocklawaha

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Re: Creating a Better Urban Core and Inner Northside
« Reply #16 on: September 18, 2012, 04:41:41 PM »
^^ I hope you're right :)

Back in the day I could stand in the corner of my grandparents' front yard & see both S lines (the local that ran from King Edward to Gateway, and the trunk that ran to Richmond)

Used to watch alot of trains in that corner 8)

Just a technical adjustment, there is only ONE 'S' line, and there has never been more. 'S' was the former SEABOARD AIR LINE RAILROAD, which merged with the 'A' or ATLANTIC COAST LINE RAILROAD to form SEABOARD COAST LINE, forerunner 0f our CSX. The other line which you recall was originally the ST JOHNS RIVER TERMINAL RAILROAD, part of the Southern Railway System, forerunner of todays NORFOLK SOUTHERN. The STJRT had a roundhouse and shop complex at 11Th and Walnut Street just a block or two east of the streetcar line.

simms3

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Re: Creating a Better Urban Core and Inner Northside
« Reply #17 on: September 18, 2012, 06:25:56 PM »
Good article.  The city will benefit greatly financially if it can stimulate the northside, springfield, riverside, eastside and san marco.  There will never be major appreciation in most areas of duval county, but the areas with the greatest potential to add value to the city's coffers are those that are in limited supply and unlimited potential for greatness.

The city should listen to its own bank accounts more than it currently listens to old timer special interests who are 110% in it for themselves.  Sleiman's strip malls will never add value to the city's coffers.  My question is regarding grandfathered developments.  If Sleiman has a CVS and a strip center on the SS built in the 90s, is it protected from additional fees under the 2030 Mobility Plan?  If the Mobility Fee only deters more strip centers from going in, thus limiting the supply of retail space available, wouldn't Sleiman benefit greatly?  And if Sleiman's properties see rent growth and barriers to entry compress cap rates and all of a sudden his formerly $5M center is sold for $10M 3-4 years later, doesn't the city then benefit greatly, too?
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simms3

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Re: Creating a Better Urban Core and Inner Northside
« Reply #18 on: September 18, 2012, 08:18:05 PM »
And one other thing.  Assuming the Mobility Fee does not impact current properties that are already improved/built on.  Surely the Mobility Plan places restrictions on the ability to get new retail centers out of the ground, which is its whole point (prevent overbuilding/sprawl, etc).  That means Sleiman's current properties benefit greatly, but that he's not able to develop as many new centers.  He must think there is more value in building ground up than harvesting value, so I have to make assumptions about his current partnership structures.  If he can't build new centers as easily, nobody else can either.  That means the money in ground up development is no longer there (as if it were now...everyone knows how overbuilt the market is and how unprotected all local Jax real estate is).   CVS is transitioning to standalone ground leases from NNN inline leases, so maybe Toney sees value in that (there's potentially a lot).

Am I missing something?  Whatever happened to creativity?  Are real estate developers in Jacksonville that lazy or that uncreative that they can't figure out how to harvest additional value in existing real estate or by trying something new?  There is nothing that overly regulatory about this Plan/Fee.  Other cities have much stricter regulations on new development and much higher fees, but all this seems to do is make these markets more attractive to anyone with the money.  What's provided?  Safety, known and constant demand, synergy, small pool of players, every lender and the best terms available, etc.  Jacksonville and Sunbelt cities will never be too expensive to limit the pool of players so this isn't a worry.  Very few if any markets are considered "overheated" and Jacksonville was one of them before and is in recovery, still.

And then there is also the fact that nobody owns as much urban retail in Jacksonville as Sleiman (the Landing...200,000-300,000 SF).  He has a platform to go off of, a start.  With the size of the Landing and the opportunity that exists there he can and should find a way make a name for himself rather than the guy that complains about the ground lease (when I can only guess he does A LOT of ground leases himself) and the guy that complains about parking, which is so baseless.  Don't go national then...they aren't interested in downtown anyway!

Jacksonville is only difficult because city leadership allows developers to take the easy road and so the market is so shitty, so overbuilt, so unregulated that nobody wants to invest in it any longer because there is no protection.  When are local developers going to figure this out?  Developers need investors and good debt.  The low cost of living, low taxes, awesome weather, and access to beach/water and trade zones will keep businesses and people coming no matter how impossible it is to build a new spec NNN strip center next to one built 3 years before. 

If you raise barriers to entry, somebody local will take advantage and outside developers/investors may take more notice.  Sleiman has all the things going for him that could make him that go-to developer.  He has the relationships, the local history and knowledge, the influence and a lot of experience.  Why would he want to limit himself to nothing more than a strip mall landlord who wasted money on the Landing and complained to the city about it?  Does he have the umph to untarnish his image and reinvent Sleiman Enterprises?

Any developer who rises up to take advantage of urban retail or urban mixed-use in Jacksonville will have somewhat of a monopoly.  There aren't that many developers in the city, and certainly not many with the experience, backing or control of an intown market or product such as retail.

If Jacksonville follows in Nashville's and Charlotte's footprints, then you can expect a wider array of lenders and investors knocking on the door.  I would want to be "that guy" that everyone has to deal with.  I would want to be offered a position of interest on the developer side of project ownership, or at least offered a management or developer fee for my role in making something happen.  Maybe I own the land and am a seller and a LP in whatever goes up.  Maybe I offer up land in exchange for a certain pref?  Sort of like debt, but better return and still senior.  I'm just thinking of possibilities that may not even exist.

So much creativity can be had.  Am I missing something?  Am I the idiot?  I know Sleiman has the experience and knows what he's doing, but why is he so against the Mobility Plan?

Not that Sleiman is totally invested in grocery neighborhood centers or larger community centers, but where these centers were the prodigal son of real estate a few years ago, producing guaranteed dividends for REITs and core grocery funds, there are a slew of problems with them now.  Occupancy is shriveling at even some of the best grocery-anchored centers.  Nail salons and service providers are finding better deals in the retail components of mixed-use developments, and they are closer and more convenient to their customer base.  Many mixed-use projects have cover in buying these deals or taking greater risks than publicly traded or dividend producing funds.  Tenants, guarantors and business lenders obviously like this.

Just looking at metro Atlanta, which now runs the full gamut of retail product types, grocery-anchored centers have NNN shop rents of $18-$35 and limited growth.  CVS anchored infill centers (much smaller) on good dirt have rents $25-$45 and higher prospects for rent growth.  Retail in new urban shopping districts range from $35-$50, and considering most are overnight popups with excellent prospects of growing and sticking around, rent growth potential is phenomenal.  Then you have retail on Peachtree in say Midtown.  High vacancy and longer to lease up, but you'll get a strong operator and $45-$65 in NNN rents.  Finally, in one new development quoted rates are $90-$130, representing the upper end.  This is an urban infill mixed-use development with a lot of retail.  The potential for rent growth in urban infill retail locations with high walkability and growing foot traffic is enormous as this is a retail segment that is JUST NOW getting going as opposed to grocery-anchored centers, which are stagnant at best.  Private developers with investors looking for yield will not touch stabilized grocery-anchored centers/strip malls.  They want opportunistic buys either in a failed center that needs work and has no prospective competition or can join a local synergy, or urban infill retail that is part of a growing shopping district/high street.  Evidencing the change in retail ownership, SIMON is slowly transitioning off malls and into outlet centers because that is where there is demand and growth.  You can't have publicly traded REITs investing in complex urban deals, but you have a lot of private guys making the switch.  They can do complex deals.

I think the saying goes Change or Die?
« Last Edit: September 18, 2012, 08:21:40 PM by simms3 »
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simms3

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Re: Creating a Better Urban Core and Inner Northside
« Reply #19 on: September 18, 2012, 08:31:13 PM »
Well I take it back...if you can't get a new center out of the ground easily, and so very few are, if you are part of the few then you can really do well.  So essentially no matter the outcome the Mobility Plan should be very good for Sleiman, whether he wants to continue to do new retail centers, grow rents in his current portfolio by harvesting value, or transition to that of a big time mixed-use developer with a focus on retail and partnering.

Wow, win-win situation there.  Why's he against the Mobility Plan again?
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thelakelander

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Re: Creating a Better Urban Core and Inner Northside
« Reply #20 on: September 18, 2012, 09:29:44 PM »
They are against it because they simply don't want to pay any impact fee. Mobility fee or the old concurrency plan, and we have a council that had already set the precedent of caving in. Other than that, Suleiman could make a ton of money off the mobility plan's structure.
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Bridges

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Re: Creating a Better Urban Core and Inner Northside
« Reply #21 on: September 19, 2012, 08:49:34 AM »
They are against it because they simply don't want to pay any impact fee. Mobility fee or the old concurrency plan, and we have a council that had already set the precedent of caving in. Other than that, Suleiman could make a ton of money off the mobility plan's structure.

Since the mobility plan was passed, and then the mobility fee was put on hold, does that mean there are currently no impact fees being charged?  Or does it revert to the old way while in the moratorium?
So I said to him: Arthur, Artie come on, why does the salesman have to die? Change the title; The life of a salesman. That's what people want to see.

thelakelander

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Re: Creating a Better Urban Core and Inner Northside
« Reply #22 on: September 19, 2012, 08:55:00 AM »
^No fee is being charged (mobility fee or the old concurrency fee), so the Sleimans of the world pocket the extra cash, still charge the end user what the market will demand and the rest of the taxpayers are left on the long term hook for funding 100% of the infrastructure needs to support new development.
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Bridges

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Re: Creating a Better Urban Core and Inner Northside
« Reply #23 on: September 19, 2012, 09:14:06 AM »
Wow. 

I went back and looked at my email exchange with Crescimbeni last October.  This was his reply to my original email:

Quote
Thank you for your email about proposed ordinance 2011-617 which will be considered by the full City Council at tonight’s meeting.

 Although I have previously been reluctant to waive the collection of fair share or (what is now known as the) mobility fee, I recognize the fact that we are in a significant recession and I am interested in spurring any type of activity that would create jobs.  In addition, information provided by the Planning and Development Department (shown in the table below) clearly suggests that in recent years, the collection of fair share or (what is now known as the) mobility fee have fallen to almost non existent levels.

 
         Fiscal Year        Amount        # Projects

            2006-07        $7,142,171           56

            2007-08        $9,162,613           56

            2008-09        $2,740,333           18

            2009-10         $826,564              5

 
Likewise, the economy seems to be taking a toll on traffic counts.  The Florida Department of Transportation is reporting a marked decrease in vehicular traffic on local state roadways.  I am attaching several links from various roads which clearly show declines in usage (traffic) after peak traffic counts were established in 2007-2008.

 
With that said, ordinance 2011-617 proposes to waive the mobility fee for twelve (12) months from the effective date of the ordinance – and further requires the completion of the construction project to occur within thirty six (36) months of the effective date.  Because of current surplus inventory, I can’t imagine that any residential development (particularly single family) will result from the passage of this legislation.  However, commercial construction could result, which would in turn lead to two things; new jobs (both short term construction and long term employees for the businesses occupying the newly constructed buildings and additional ad valorem tax revenue for both the city and Duval County Public Schools.

 Again, while previously reluctant to waive the collection of fair share or (what is now known as the) mobility fee, based on recent fair share collections (or the lack thereof) and the promise of new jobs, I think a twelve (12) month experiment to create jobs is worth taking a chance on.

 In closing, thank you again for your email.

I went back and forth with him for a while pointing out several of his problems.  But my main question now would be, how did the experiment work?  Seems like we could find this out right?
So I said to him: Arthur, Artie come on, why does the salesman have to die? Change the title; The life of a salesman. That's what people want to see.

simms3

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Re: Creating a Better Urban Core and Inner Northside
« Reply #24 on: September 19, 2012, 11:22:23 AM »
Well the city probably missed out on a lot of fees with all of the multifamily construction on the SS that would have happened regardless.  A fee doesn't affect demand for real estate...people and job creators effect demand for real estate.  Where there is demand, someone will meet with supply.  In Jacksonville's case before, similarly to Miami, Atlanta, Las Vegas, SW FL, Phoenix, Inland Empire, etc builders/lenders/investors really overestimated demand, but a hefty fee system would have generated quite a bit of revenue!

How does a fee effect jobs?  Why do we need to protect duplicative real estate jobs and extra construction jobs just to fuel a building boom for no reason?  Why do we need to make it so easy and attractive that dentists and doctors and lawyers cease their old jobs and become developers?  What does a mobility fee have to do with making the area attractive to tech firms or other industries?  What does a mobility fee have to do with attracting F1000 firms?

Actually, a mobility fee that paves the way for public transit and bike lanes and mixed-use development probably makes the area A LOT more attractive to 21st century industries and could potentially BOOST jobs/employment and population growth in the 25-34 year old sector, thus CREATING demand for a real estate boom, and thus CREATING those construction jobs, etc AND still generating fees to keep the cycle going.
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Ocklawaha

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Re: Creating a Better Urban Core and Inner Northside
« Reply #25 on: September 19, 2012, 02:27:00 PM »
^No fee is being charged (mobility fee or the old concurrency fee), so the Sleimans of the world pocket the extra cash, still charge the end user what the market will demand and the rest of the taxpayers are left on the long term hook for funding 100% of the infrastructure needs to support new development.

Yeah, Sleiman seems to be a classic case of the tail wagging the dog.

If they don't allow the mobility plan to have at least an equal "one year experiment," then will one of you please bring the tar bucket to both the Landing and City Hall? I'll bring the feathers!

BackinJax05

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Re: Creating a Better Urban Core and Inner Northside
« Reply #26 on: September 20, 2012, 12:17:51 AM »
^^ I hope you're right :)

Back in the day I could stand in the corner of my grandparents' front yard & see both S lines (the local that ran from King Edward to Gateway, and the trunk that ran to Richmond)

Used to watch alot of trains in that corner 8)

Just a technical adjustment, there is only ONE 'S' line, and there has never been more. 'S' was the former SEABOARD AIR LINE RAILROAD, which merged with the 'A' or ATLANTIC COAST LINE RAILROAD to form SEABOARD COAST LINE, forerunner 0f our CSX. The other line which you recall was originally the ST JOHNS RIVER TERMINAL RAILROAD, part of the Southern Railway System, forerunner of todays NORFOLK SOUTHERN. The STJRT had a roundhouse and shop complex at 11Th and Walnut Street just a block or two east of the streetcar line.

Yes, I know that. The other track Im referring to was a local line that ran from near King Edward Cigars, north to around Gateway shopping center. It then joined a track that runs east-west. The east-west track is still there.

Unfortunately, because of bushes & trees, I was unable to see the STJRT/Sou/NS track from the front yard.

BTW, do you know if there are any remants of the STJRT roundhouse still there? I see something sort of round at 11th & Walnut, but not sure what it is.