Citizens Property Insurance starts plans for move out of downtown Jacksonville

[thelakelander]

I agree that the best....and really only thing Jax can do, is make downtown a place where people really want to be. Unfortunately, the reality is this will take a while. We've failed to consistently move in the right direction with downtown over the last few decades, the worst being when Hughes was over the DIA. In the meantime, keep building up the public spaces and subsidizing private adaptive reuse and infill development, when necessary.

[CityLife]

Downtown Jax office seems to be struggling in general and it cannot all be blamed on the pandemic.

It is somewhere between disingenuous, delusional, and completely asinine to try to put the blame on the pandemic for Jacksonville's downtown office vacancy situation in 2024. And it CERTAINLY isn't backed by much empirical data. Yes, COVID-19 hurt urban office occupancy. But in the four years since, we're getting crushed by just about everyone outside of San Francisco in terms of how our peers have reacted and how office occupancy has bounced back.

Irritates me to no end when the DIA puts the blame solely on changes resulting from WFH. Because it just ain't true. The reason employers have fled downtown (just like restaurant owners have) is because we've absolutely failed them in creating an attractive environment that they want to do business in, or bring clients into. It's a total cop-out when you see how well cities with better urban fabric have rebounded.

1,000%. The Downtown leaders don't speak the truth because it reflects poorly on them and the commercial real estate brokers can't either because it's bad for business, but the current office market Downtown is downright scary. If Jax didn't have an absolutely fantastic historic housing stock (where you can still get great bang for your buck), the entire urban core would be at risk of future collapse.

DT Jax has around 7-8 million SF of office, compared to 11.4 million in Tampa and 11 million in Orlando. Both those cities appear to have a much healthier DT office market. Orlando's rates are around $25-$35 sf/year and the three largest available spaces are 239k, 108k, and 92k. Tampa's rates are around $35-$45 sf/year with the three largest spaces available at 138k, 86k, and 81k. As I pointed out earlier, Jax's rates are around $20-$27 and the three largest spaces available are 389k, 361k, and 250k. Jax's three largest spaces are all class A, and in 30, 22, 19 story buildings, with premium views. They are perfect candidates for a major relocation or expansion. The fact that they aren't getting backfilled at those rates is not a good sign.

[CityLife]

Downtown Jax office seems to be struggling in general and it cannot all be blamed on the pandemic.

It is somewhere between disingenuous, delusional, and completely asinine to try to put the blame on the pandemic for Jacksonville's downtown office vacancy situation in 2024. And it CERTAINLY isn't backed by much empirical data. Yes, COVID-19 hurt urban office occupancy. But in the four years since, we're getting crushed by just about everyone outside of San Francisco in terms of how our peers have reacted and how office occupancy has bounced back.

Irritates me to no end when the DIA puts the blame solely on changes resulting from WFH. Because it just ain't true. The reason employers have fled downtown (just like restaurant owners have) is because we've absolutely failed them in creating an attractive environment that they want to do business in, or bring clients into. It's a total cop-out when you see how well cities with between urban fabric have rebounded.

I posted about this before, but got a lot of flak of course... our city made their decision 20+ years ago & today we are seeing the effects of those policies. We chose to create an office submarket that eclipses our downtown & no that isn't "common". Suburban office parks were literally invented in Jacksonville. Retail usually follows... cough cough St. Johns Town Center. SJTC has made the job DT a lot harder.

https://en.wikipedia.org/wiki/Midtown_Centre

I've been saying this on here for I don't know, 10+ years, but the City giving Fidelity Investments, Deutsche Bank, etc major incentives to locate on the Southside has basically opened the door for those employees to move to SJC. I was one of Fidelity Investments (located next to Tinseltown) first hires in their Jax office and virtually all the managers that relocated from elsewhere immediately moved to SJC (or the beaches) and virtually all of the employees that stayed that I know now live in Nocatee or SJC. Same story with people I know from DB. They all say that a large amount of their coworkers live in SJC too. The opposite is true of virtually everyone I know that works at Fidelity National (located downtown), where they all live in the urban core or just outside it. Sure, it's anecdotal, but is also based on their own understanding of where coworkers live. I don't think location of one's employment is the only factor in where one chooses to live, but it definitely plays a role.

That said, would those companies have relocated to Jax at all if forced to move Downtown? Like Lakelander said, the City needs to make Downtown the place to be. But that also means doing more than just making nice parks and subsidizing rental housing. 

[Jax_Developer]

Downtown Jax office seems to be struggling in general and it cannot all be blamed on the pandemic.

It is somewhere between disingenuous, delusional, and completely asinine to try to put the blame on the pandemic for Jacksonville's downtown office vacancy situation in 2024. And it CERTAINLY isn't backed by much empirical data. Yes, COVID-19 hurt urban office occupancy. But in the four years since, we're getting crushed by just about everyone outside of San Francisco in terms of how our peers have reacted and how office occupancy has bounced back.

Irritates me to no end when the DIA puts the blame solely on changes resulting from WFH. Because it just ain't true. The reason employers have fled downtown (just like restaurant owners have) is because we've absolutely failed them in creating an attractive environment that they want to do business in, or bring clients into. It's a total cop-out when you see how well cities with between urban fabric have rebounded.

I posted about this before, but got a lot of flak of course... our city made their decision 20+ years ago & today we are seeing the effects of those policies. We chose to create an office submarket that eclipses our downtown & no that isn't "common". Suburban office parks were literally invented in Jacksonville. Retail usually follows... cough cough St. Johns Town Center. SJTC has made the job DT a lot harder.

https://en.wikipedia.org/wiki/Midtown_Centre

I've been saying this on here for I don't know, 10+ years, but the City giving Fidelity Investments, Deutsche Bank, etc major incentives to locate on the Southside has basically opened the door for those employees to move to SJC. I was one of Fidelity Investments (located next to Tinseltown) first hires in their Jax office and virtually all the managers that relocated from elsewhere immediately moved to SJC (or the beaches) and virtually all of the employees that stayed that I know now live in Nocatee or SJC. Same story with people I know from DB. They all say that a large amount of their coworkers live in SJC too. The opposite is true of virtually everyone I know that works at Fidelity National (located downtown), where they all live in the urban core or just outside it. Sure, it's anecdotal, but is also based on their own understanding of where coworkers live. I don't think location of one's employment is the only factor in where one chooses to live, but it definitely plays a role.

That said, would those companies have relocated to Jax at all if forced to move Downtown? Like Lakelander said, the City needs to make Downtown the place to be. But that also means doing more than just making nice parks and subsidizing rental housing.

Might be anecdotal but it surely is a trend that is hard to counter. JaxUSA does great work, and in no way trying to diminish their efforts. But, that & state grants for select industries are intended to attract businesses and they would rather get the business than no business. That serves as a double edge sword in these scenarios... where businesses don't prefer to locate downtown, but given most companies are contemplating multiple offers, we end up being essentially being required to give incentives anyway.

Is there a way to couple up JaxUSA & the DIA to see how incentives could be tweaked for office users? It's not like we get tons of office work proposals & I think the work force incentives could be more purposeful.

How do we fund more incentives DT? Get rid of the Southbank CRA for crying out loud & focus that $$ on the Northbank!

[fsu813]

^ I suspect focusing incentives on the Downtown core will be a recommendation of the city council specifical committee on Downtown.

[thelakelander]

^Focusing on the Northbank core is a must!

[vicupstate]

Get rid of the Southbank CRA for crying out loud & focus that $$ on the Northbank!

Southbank CRA is a TIF, right?
Getting rid of the Southbank CRA would mean getting rid of its revenue, would it not?

[CityLife]

Get rid of the Southbank CRA for crying out loud & focus that $$ on the Northbank!

Southbank CRA is a TIF, right?
Getting rid of the Southbank CRA would mean getting rid of its revenue, would it not?

It would mean redirecting any unencumbered funds to the general fund. If the CRA was eliminated, I suppose the City could project out how much unencumbered Southbank CRA dollars will go into the general fund every year, and then subsequently increase the Northbank CRA funding by that amount. Or simply allocate it towards CIP projects on the Northbank if it can't go directly into the Northbank CRA.

It looks like the Southbank CRA generated $7.2 in revenue (property tax gains/TIF) for the current fiscal year, but $5.5 million of that is already spoken for. So it really could only roll $1.7 million into the general fund.

https://dia.coj.net/about/What-is-the-DIA/Southside-CRA/FY-23-24-SOUTHSIDE-ORD-2023-504-ADOPTED.aspx

The problem is, the Southbank needs help too. Of all of those office vacancies I listed earlier the following are on the Southbank:

Prudential 389k square feet
Suddath 105k square feet
1200 Riverplace (Old Stein Mart) 86k square feet
Riverplace Tower 62k square feet

[Skybox111]

The real reason why they are leaving is safety concerns not garage problems over 230 calls from citizens employees involving insane people on the streets harassing them and threatening them and they had enough.

[Ken_FSU]

The real reason why they are leaving is safety concerns not garage problems over 230 calls from citizens employees involving insane people on the streets harassing them and threatening them and they had enough.

Not the only business that I know of that's considering a move from downtown for these exact reasons.

But, by all means, let's legislate the CBA to death and strip money for affordable housing and homeless support from the mayor's budget.

[fsu813]

The real reason why they are leaving is safety concerns not garage problems over 230 calls from citizens employees involving insane people on the streets harassing them and threatening them and they had enough.

Not the only business that I know of that's considering a move from downtown for these exact reasons.

But, by all means, let's legislate the CBA to death and strip money for affordable housing and homeless support from the mayor's budget.

As I've said for many, many years - if having a positive effect on Downtown is the goal, it would be less expensive and faster for COJ to simply incentivize deconsolidating all the homeless shelters from Downtown, vs create and fund the ecosystem of available mental health, substance abuse, and low barrier housing necessary to have the same impact.

Of course, other metrics besides a positive impact on Downtown are important. But still.

I would guess the Gateway Jax projects will make this issue come to a head sooner than later, as they invest rare significant dollars into a Downtown that desperately needs them, and they'll be in close proximity to some of the problem behavior hot spots in Downtown.

[Charles Hunter]

Would the move of Suzbacher from east of Liberty Street out to the Golfair area, west of I-95 and north of MLK, be a step toward decentralizing these services?

[acme54321]

But crazy homeless people aren't the problem!

[Jax_Developer]

I only point out parking & CAM fees because there is certainly a bottom-line benefit from moving out of DT. It does save companies a small amount of expense, but also our office users & environment is more geared towards smaller spaces.

The buildings on the Southbank are, at the very least, doing a lot better than the Northbank. I know where you are finding the SF figures CityLife, but I think NAI Hallmark is much more accurate for our submarkets.

They list the Southbank at 10% vacancy in comparison to the Northbank being 20%. According to NAI, the Northbank also has 4x the office space as the Southbank. In my opinion, the Southbank office properties are *at least* able to stay afloat. I don't think the same will be true with the Northbank in the next few years (if nothing changes). Of course, 4-story MF does not need incentives in the Southbank. They could just tighten the incentive package available to the Southbank.

[Tacachale]

We have a homelessness crisis as well as a housing crisis in this city. However, the homeless are not a main let alone sole reason for any company moves away from downtown. There are other issues that are far bigger — wanting to consolidate office space, wanting more parking, to be closer to the suburban employee base, or even just because it’s what the bigwigs personally want. It does, however, contribute to negative perceptions of downtown and the urban core among some people.