Author Topic: JEA hunt for headquarters site is silent on evacuation risk  (Read 14776 times)

Steve

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Re: JEA hunt for headquarters site is silent on evacuation risk
« Reply #15 on: January 08, 2019, 11:26:32 AM »
Unless there is a specific tenant driving it, I don't think new office construction is typical in cities' the size of JAX with a vacancy rate of 14%. Also, doesn't JAX have pretty low lease rates throughout DT? That isn't conducive to new construction. 

I'd have to agree. I think we're in a better place - the vacancy rate was much higher in the past even with relatively low lease rates. At least the buildings are coming close to full.

I know on the residential side the goal is actually the low to mid 90% range. They don't want 100% because it's harder to cycle tenants and increase average rent (a Resi Property Manager explained that to me).

In the case of JEA they'd be a pretty decent sized anchor tenant so I could see (if they so desire) them building something with extra space. But, I think JEA may want their own building.

Kiva

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Re: JEA hunt for headquarters site is silent on evacuation risk
« Reply #16 on: January 08, 2019, 04:11:49 PM »
Six companies submitted proposals. Looks like two are on the Southbank, two downtown, Lot J and the last one did not specify a location. https://www.bizjournals.com/jacksonville/news/2019/01/08/6-companies-submit-bids-for-new-jea-headquarters.html?iana=hpmvp_jac_news_headline

RattlerGator

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Re: JEA hunt for headquarters site is silent on evacuation risk
« Reply #17 on: January 08, 2019, 04:38:37 PM »
Typical.

Conducive.

Good grief, vic !!!

Let's just see how everything plays out. Could be very interesting.

thelakelander

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Re: JEA hunt for headquarters site is silent on evacuation risk
« Reply #18 on: January 08, 2019, 04:53:31 PM »
The five locations:

1. Kings Avenue Station, 1201 Kings Ave., proposed by Kimley-Horn.
2. A Cathedral District site occupied by the Salvation Army located between Ashley, Church, Ocean and Main Streets. This was proposed by Energy Innovation Properties.
3.The current JEA headquarters site, which was listed in Ryan Companies bid.
4.The District, proposed by KDC.
5.Lot J, included in Cordish Cos. plan
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Charles Hunter

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Re: JEA hunt for headquarters site is silent on evacuation risk
« Reply #19 on: January 08, 2019, 05:13:08 PM »
Interesting that JEA has set up the schedule so the details of the proposals won't be released until after they make their selection.  Certainly pushes the boundaries of the spirit of Government in the Sunshine.
January 8 - Bids Received
"The responses are sealed and cannot be released to the public for 30 days."
January 22 - JEA Regular Board Meeting, announce Short List (number of proposals on short-list not specified)
February 5 - JEA Special Board Meeting, select one firm, begin negotiations, using CBRE - perhaps another way to stay out of the Sunshine, as long as no 2 Board members are at a negotiating session
"As that meeting is 28 days after the bids were received, they still will not be open to the public."

Steve

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Re: JEA hunt for headquarters site is silent on evacuation risk
« Reply #20 on: January 08, 2019, 05:31:10 PM »
Why the secrecy?

Steve

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Re: JEA hunt for headquarters site is silent on evacuation risk
« Reply #21 on: January 08, 2019, 05:35:43 PM »
I’m guessing the Energy Innovation proposal is the one associated with Steve Atkins.

KenFSU

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Re: JEA hunt for headquarters site is silent on evacuation risk
« Reply #22 on: January 08, 2019, 05:59:49 PM »
^It is.

KenFSU

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Re: JEA hunt for headquarters site is silent on evacuation risk
« Reply #23 on: January 08, 2019, 11:38:55 PM »
The five locations:

1. Kings Avenue Station, 1201 Kings Ave., proposed by Kimley-Horn.
2. A Cathedral District site occupied by the Salvation Army located between Ashley, Church, Ocean and Main Streets. This was proposed by Energy Innovation Properties.
3.The current JEA headquarters site, which was listed in Ryan Companies bid.
4.The District, proposed by KDC.
5.Lot J, included in Cordish Cos. plan

Plus a sixth bid, which apparently involved space at BOA Tower.

Because of the players involved here, I think this is going to be one of the more fascinating decisions we've seen in recent years.

Charles Hunter

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Re: JEA hunt for headquarters site is silent on evacuation risk
« Reply #24 on: January 09, 2019, 08:33:05 AM »
The five locations:

1. Kings Avenue Station, 1201 Kings Ave., proposed by Kimley-Horn.
2. A Cathedral District site occupied by the Salvation Army located between Ashley, Church, Ocean and Main Streets. This was proposed by Energy Innovation Properties.
3.The current JEA headquarters site, which was listed in Ryan Companies bid.
4.The District, proposed by KDC.
5.Lot J, included in Cordish Cos. plan

Plus a sixth bid, which apparently involved space at BOA Tower.

Because of the players involved here, I think this is going to be one of the more fascinating decisions we've seen in recent years.

Shame we won't be able see what they are deciding among, since the proposals will remain secret until after JEA picks one.

jaxnyc79

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Re: JEA hunt for headquarters site is silent on evacuation risk
« Reply #25 on: January 09, 2019, 02:34:47 PM »
Unless there is a specific tenant driving it, I don't think new office construction is typical in cities' the size of JAX with a vacancy rate of 14%. Also, doesn't JAX have pretty low lease rates throughout DT? That isn't conducive to new construction.

My first instinct is to agree with this.  The question asked what is the demand for downtown office space in Jax.  I don’t think the relatively low 14% vacancy rate tells a full story of demand.  What’s the interest pipeline?  I need evidence that there’s a sizable and sector-diversified pool of commercial occupants expressing an interest in downtown for their futures.

CityLife

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Re: JEA hunt for headquarters site is silent on evacuation risk
« Reply #26 on: January 09, 2019, 05:26:33 PM »
Unless there is a specific tenant driving it, I don't think new office construction is typical in cities' the size of JAX with a vacancy rate of 14%. Also, doesn't JAX have pretty low lease rates throughout DT? That isn't conducive to new construction.

My first instinct is to agree with this.  The question asked what is the demand for downtown office space in Jax.  I don’t think the relatively low 14% vacancy rate tells a full story of demand.  What’s the interest pipeline?  I need evidence that there’s a sizable and sector-diversified pool of commercial occupants expressing an interest in downtown for their futures.

One thing to consider about Khan is that he can self finance anything at Lot J. He's on a completely different playing field from development and private equity firms who have to concern themselves with projecting returns to their boards and who may have trouble financing new construction based on DT Jax's office market. I have a client that is a subsidiary of the largest private equity firm in the world and another client that is a billionaire who develops with his own cash. Despite the private equity group having substantially more money, the cash developer has considerable advantages in a variety of ways.

Khan could easily build spec Class AAA office at Lot J with his own cash and probably not even worry about making a dime back in the next 10 years. Doubt he would do that without an anchor tenant lined up, but he could do it and not blink an eye. Also one thing to consider about the current vacancy rate, is that a lot of companies prefer to build their own facility to suit their needs, rather than fit into an existing space. Khan can offer more to companies looking to relocate to Jax than owners of existing towers in the CBD can.

Point being, I don't know that the current market of office in the CBD is really a barometer for Khan. Definitely interested to see what he's got up his sleeve.

Kerry

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Re: JEA hunt for headquarters site is silent on evacuation risk
« Reply #27 on: January 09, 2019, 07:21:41 PM »
The only way Khan has enough cash to do anything is if he sells something.  Like most wealthy people, he doesn't have a Scrooge McDuck vault with a diving board.  He might be worth a lot but he isn't liquid.  The Jags alone account for 1/3 of his wealth.  The dude even has to rent our his yacht.

https://www.yachtcharterfleet.com/luxury-charter-yacht-37804/kismet.htm
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KenFSU

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Re: JEA hunt for headquarters site is silent on evacuation risk
« Reply #28 on: January 09, 2019, 10:43:43 PM »
^I agree that Khan can finance anything he wants on his own, but I don't think he will. Khan will definitely throw in cash, maybe a third of the total project cost, but Cordish is ultimately going to be responsible for brokering the deal with the city. If Cordish's history is any indication, I'd expect the project to be largely funded via TIF, possibly guaranteed against the general fund.

For Lot J, I'd love to see something where a portion of the subsidies for the office component are reliant on either net new jobs to Jacksonville, net new jobs to downtown, or net saved jobs (companies that would have left the city otherwise).

Another thing that I find interesting:

CBRE is partnering with the JEA to find a new headquarters for the utility in Jacksonville; Cordish's new office development is considered a front-runner.

CBRE partnered with Cordish last year on the office development at Ballpark Village in St. Louis, and helped relocate PWC from the CBD to the edge of downtown.

Huge company, doubt it means anything, but it is interesting that CBRE is steering the JEA headquarters search while also maintaining a relationship with Cordish.
« Last Edit: January 09, 2019, 10:49:39 PM by KenFSU »

jaxnyc79

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Re: JEA hunt for headquarters site is silent on evacuation risk
« Reply #29 on: January 09, 2019, 11:44:35 PM »
Quote
Huge company, doubt it means anything, but it is interesting that CBRE is steering the JEA headquarters search while also maintaining a relationship with Cordish.

The C in CBRE stands for "Conflicted"