RiversEdge breaks ground on Southbank

[marcuscnelson]

This news seemed big enough to get its own thread.

The District is no more: Welcome to RiversEdge: Life on the St. Johns.

https://www.jaxdailyrecord.com/photo-gallery/riversedge-a-new-vision-for-the-downtown-southbank/

Preston Hollow Capital LLC is rebranding its 32-acre Downtown Southbank development, previously called The District, to “RiversEdge: Life on the St. Johns” and has contracted with Toll Brothers for 39 town houses — the site’s first confirmed vertical construction.

Boyer said a completed RiversEdge could have up to 950 residential units, 147 hotel rooms, 200,000 square feet of office space, 134,000 square feet of retail and a 125-slip marina.

Preston Hollow Managing Director Ramiro Albarran said after the event RiversEdge should be ready for Toll Brothers to begin construction by the first quarter 2022.

Another 750 multifamily units on two central parcels next to a future city park also could start next year.

Albarran said at the May 25 event that after improvements to the St. Johns River bulkhead are completed, the nearly 4 acres of city parks, a Downtown Riverwalk extension, roads, streetscapes and site infrastructure will begin construction by summer 2022 in one phase.

Featuring some flashy new renderings:

[Steve]

I want to see more detailed renderings. But...the initial views here are better in my eyes. I feel like now that we have big boys at the table with this project (sorry Rummel and Munz), we may get a better quality product.

[heights unknown]

I want to see more detailed renderings. But...the initial views here are better in my eyes. I feel like now that we have big boys at the table with this project (sorry Rummel and Munz), we may get a better quality product.

I agree Steve...needed the "Big Boys" to come to bat to make the home run. I wonder what other things Curry and Co. have up their sleeves or are hiding? We were all thinking that this was maybe dead, or we were raising an eyebrow at it thinking that it would be years away from coming to fruition, and then bam...the home run. I really believe we will be hearing more good news soon in BIG JAX!

[Zac T]

Super excited to see this project come to life. This particular rendering reminds me a lot of the St Pete waterfront

[Ken_FSU]

Credit where it's due, the DIA has done a really good job helping to keep this one alive.

Really hoping to see this one truck forward at a good speed.

With the CDD bonds issued, they've got every incentive to not dawdle. 

[vicupstate]

Good to see progress, and getting rid of that 'working title' for the project. The only thing coming out of the ground for certain is some townhouses and probably some 5/6 floor apartments. It is still a 10-20 year build out. But, it isn't a total pipe dream any longer either, so that is good.     

[Captain Zissou]

I wonder what other things Curry and Co. have up their sleeves or are hiding?

More demolitions and branding campaigns for vacant lots.

[Ken_FSU]

It is still a 10-20 year build out. But, it isn't a total pipe dream any longer either.

I think we're going to see a timeline much more aggressive than this.

$30+ million in bonds were issued by the developer to finance the horizontal infrastructure work underway now (at the school board building), underway imminently (the bulkheads), and underway in the coming months (roadways and utilities).

The developer's repayment of these bonds is to be financed by REV grants from the DIA totaling ~$50 million that don't kick in until vertical construction begins, on a parcel-by-parcel basis, that expire when the Southbank CRA sunsets in 2040.

A significant decrease in scale for the project also hurts the developers ability to repay the bonds, as they're based on total assessed value of finished vertical construction.

Long way of saying that if we're still looking at undeveloped land even 5-10 years from now, or if we're looking at some scattered midrise apartments, the chances of this project being a financial success for the developer are extremely low.

Unlike something like Lot J, where the Jags had the luxury of a 10-year timeline, all pressure is on these guys to move fast at a decent scale in order to trigger the incentives necessary to repay the bonds before the CRA expires.

No clue if they'll succeed, but I'm loving the new renders, loving the plan for the park space, and really rooting for Preston Hollow to bring this one home.

[CityLife]

I want to see more detailed renderings. But...the initial views here are better in my eyes. I feel like now that we have big boys at the table with this project (sorry Rummel and Munz), we may get a better quality product.

Say what you will about Rummel and Munz, but they actually did Downtown a huge unintentional solid. Preston Hollow has so much money sunk into the project, that they have no choice but to ensure that it gets parceled off and developed.

I've always thought this was a far more viable project than Lot J/Shipyard for a variety of reasons.  Fortunately, there do not appear to be any signs of the development community slowing down at all. There are still a ton of groups out there actively looking for projects. Glad to see it's getting some traction and starting to take off.

Long term, if this is successful, you will see a ton of infill happen on the Southbank. There are still several large surface lots to build on and some great tear down opportunities. The Southbank and North San Marco have a ton of potential.

[fieldafm]

It is still a 10-20 year build out. But, it isn't a total pipe dream any longer either.

I think we're going to see a timeline much more aggressive than this.

$30+ million in bonds were issued by the developer to finance the horizontal infrastructure work underway now (at the school board building), underway imminently (the bulkheads), and underway in the coming months (roadways and utilities).

The developer's repayment of these bonds is to be financed by REV grants from the DIA totaling ~$50 million that don't kick in until vertical construction begins, on a parcel-by-parcel basis, that expire when the Southbank CRA sunsets in 2040.

A significant decrease in scale for the project also hurts the developers ability to repay the bonds, as they're based on total assessed value of finished vertical construction.

Long way of saying that if we're still looking at undeveloped land even 5-10 years from now, or if we're looking at some scattered midrise apartments, the chances of this project being a financial success for the developer are extremely low.

Unlike something like Lot J, where the Jags had the luxury of a 10-year timeline, all pressure is on these guys to move fast at a decent scale in order to trigger the incentives necessary to repay the bonds before the CRA expires.

No clue if they'll succeed, but I'm loving the new renders, loving the plan for the park space, and really rooting for Preston Hollow to bring this one home.

You've accurately described the risk of CDDs in Florida. This is why during the last real estate recession, more than half were underwater and required State subsidies in order to pay back bondholders.

That said, vicupstate is absolutely right.  In 5 years, I'd say two of the sites are developed or under construction. Sounds like one is under contract and maybe two more have more than lukewarm interest.  There is a long way to go.  There isn't anything groundbreaking in the structure of this, its a typical 20-30 year master-planned development... just like Nocatee, E-Town locally; Baldwin Park, Celebration in Central Florida; Watersound, Southwood in the Panhandle. There are plus/minus 600 of them throughout the state, and plus/minus two dozen in Duval County alone.  The hype machine around this property over the last 9 years has been a little insane. 

DIA deserves some credit for not letting this die and working very well with a reluctant financier that didn't want to be a developer in the first place.  Let's just see how the rest plays out over the next 10+ years.   

[jaxlongtimer]

^ If the current off-the-charts demand for housing and related opportunities by residential developers remains un-satiated for the next few years, I could also see more of this project being residential than what is currently shown and, thus, advancing the development timeline.

It appears that the scarcity and pricing of lots in outer suburbia is making infill a lot more appetizing.

[heights unknown]

I wonder what other things Curry and Co. have up their sleeves or are hiding?

More demolitions and branding campaigns for vacant lots.

LOLOLOLOLOLOLOL...I hope not.

[marcuscnelson]

I wonder what other things Curry and Co. have up their sleeves or are hiding?

More demolitions and branding campaigns for vacant lots.

I think it was Bowman today who asked what Curry was planning to do with the $600 million the LOGT clears up between the CIP relief and the American Rescue Plan money. Who knows, maybe we'll just happen to start hearing about that Four Seasons again.

Although personally I wouldn't mind grabbing $70 million from the CIP to implement that list of recommendations the working group made a few months back. Maybe a little more to invest in the Landi- Riverfront Plaza.

I've always thought this was a far more viable project than Lot J/Shipyard for a variety of reasons.  Fortunately, there do not appear to be any signs of the development community slowing down at all. There are still a ton of groups out there actively looking for projects. Glad to see it's getting some traction and starting to take off.

Long term, if this is successful, you will see a ton of infill happen on the Southbank. There are still several large surface lots to build on and some great tear down opportunities. The Southbank and North San Marco have a ton of potential.

I've been thinking for a while that the city should do exactly what Preston Hollow is leading on here with the Shipyards. Get the remediation done, put in some access roads, upzone it to the max (after planning for parkspace) and parcel it off to anyone who wants to build on it, whether or not that includes Khan/Iguana/Gecko. If someone wants to buy a couple parcels and build a big multi-use development, fine. But just get it ready, get it onto the tax rolls, and let the market do its work. More of that, less tearing down structurally sound buildings to turn into grass lots.

[CityLife]

I've always thought this was a far more viable project than Lot J/Shipyard for a variety of reasons.  Fortunately, there do not appear to be any signs of the development community slowing down at all. There are still a ton of groups out there actively looking for projects. Glad to see it's getting some traction and starting to take off.

Long term, if this is successful, you will see a ton of infill happen on the Southbank. There are still several large surface lots to build on and some great tear down opportunities. The Southbank and North San Marco have a ton of potential.

I've been thinking for a while that the city should do exactly what Preston Hollow is leading on here with the Shipyards. Get the remediation done, put in some access roads, upzone it to the max (after planning for parkspace) and parcel it off to anyone who wants to build on it, whether or not that includes Khan/Iguana/Gecko. If someone wants to buy a couple parcels and build a big multi-use development, fine. But just get it ready, get it onto the tax rolls, and let the market do its work. More of that, less tearing down structurally sound buildings to turn into grass lots.

Agreed. I've been posting for probably 5-7 years that the City should act as master developer and follow the Brooklyn Bridge Park model.

Here's a post I made about it in a Lot J thread recently:

I posted years ago that the City should follow the model of Brooklyn Bridge Park. NYC essentially acted as master developer; funded park and infrastructure improvements up front and curated the development around the park and waterfront. They created a master plan and issued RFP's for each individual parcel and developed it incrementally over the past 10-15 years. The park is mandated to be self-sustaining from revenue produced by developments in and around the park. It's more than self-sustaining, it's printing money. Even after paying $26 million of expenses (staff, maintenance, etc), it still made a $61 million profit in 2019. The entity managing the park's total financial position is $395 million (assets minus liabilities). But perhaps most importantly, Brooklyn got a world class waterfront park.

Now I'm the first to call people out who say, "hey why don't we turn the Skyway into the High Line, or hey wouldn't it be cool if we built something like The Vessel in Jax", so I know things that happen in NY, LA, Miami, etc are not always analogous with Jax. Brooklyn Bridge Park happens to be located next to Brooklyn Heights and Cobble Hill (which are insanely expensive and desirable places to live) and also has an incredible view of Lower Manhattan, so the astounding profit they've made there would not exactly translate to Jax. That said, I still think the model of the City acting as the master developer making waterfront and infrastructure improvements, then parceling land off to developers would be more sustainable and successful than giving Khan hundreds of millions of dollars for him to develop what appears to essentially be a market rate development, where he is taking minimal risk and is basically only acting as master developer himself.

The real problem is that COJ is so horrifically run and hires virtually no talent that a concept like this is completely foreign and there would be no faith from the public that the City could pull it off...

[Ken_FSU]

I wonder what other things Curry and Co. have up their sleeves or are hiding?

More demolitions and branding campaigns for vacant lots.

I think it was Bowman today who asked what Curry was planning to do with the $600 million the LOGT clears up between the CIP relief and the American Rescue Plan money. Who knows, maybe we'll just happen to start hearing about that Four Seasons again.

Although personally I wouldn't mind grabbing $70 million from the CIP to implement that list of recommendations the working group made a few months back. Maybe a little more to invest in the Landi- Riverfront Plaza.

I've always thought this was a far more viable project than Lot J/Shipyard for a variety of reasons.  Fortunately, there do not appear to be any signs of the development community slowing down at all. There are still a ton of groups out there actively looking for projects. Glad to see it's getting some traction and starting to take off.

Long term, if this is successful, you will see a ton of infill happen on the Southbank. There are still several large surface lots to build on and some great tear down opportunities. The Southbank and North San Marco have a ton of potential.

I've been thinking for a while that the city should do exactly what Preston Hollow is leading on here with the Shipyards. Get the remediation done, put in some access roads, upzone it to the max (after planning for parkspace) and parcel it off to anyone who wants to build on it, whether or not that includes Khan/Iguana/Gecko. If someone wants to buy a couple parcels and build a big multi-use development, fine. But just get it ready, get it onto the tax rolls, and let the market do its work. More of that, less tearing down structurally sound buildings to turn into grass lots.

Great post, Marcus.

Now is the time.

I don't think people realize that if a private developer were to come along with a $1 billion plan for the Shipyards, or if 10 developers were to come along with plans for the individual parcels, even if we threw every incentive in the book at the project and fast-tracked remediation starting today, we're looking at maybe 2027 before any vertical construction could begin.

Gonna take a year to issue an RFP for remediation, select a winner, and work out the agreement. 18-36 months to full remediate the Shipyards. And another year or two to get the environmental greenlight from the feds to build.

Real lost opportunity to jump on this sooner.

And in terms of opportunity cost, the $20+ million we put into removing the Landing, along with the $13 million previously set aside for remediation from the lawsuit, would have been enough to clean up the Shipyards.