Now undeveloped, 61 acres along Philips Highway south of Florida 9B are slated for an almost 600,000-square-foot commercial park that would start taking shape over the next decade.
The Powers Bay Business Center, led by applicant and landowner Frapag Powers Bay LLC, would start with two phases at a budget of more than $60 million, according to an application filed Wednesday with the St. Johns River Water Management District.
Applicant John Zehmer said Thursday nothing was imminent and the drawings were preliminary.
“It’s a conceptual filing to get our permits lined up,” said Zehmer, a lawyer and part of the property ownership group.
According to the filing, the first two phases would create 310,000 square feet of Class A office space and 35,000 square feet of retail space, including a veterinarian’s office. About an acre of the property is owned by a group led by two Jacksonville veterinarians.
A third phase is shown as two four-story, 116,000-square-foot buildings.
The applicant and landowner is Frapag Powers Bay LLC, led by Frapag Realty Services Inc.
Zehmer is president of Frapag Realty Services Inc., whose officers and directors include executives in Ponte Vedra Beach and top managers with Vienna-based Frapag.
Frapag is an international group of companies whose holdings include real estate properties in Europe and the United States. Its Jacksonville investment includes the Waterview Office Park along Deerwood Park Boulevard.
Peacock Consulting Group is the environmental consultant for Powers Bay Business Center. The engineer is RS&H.
About 45 acres are uplands, primarily pine plantation. The remainder is wetland and surface waters, according to an environmental report.
Because of the property’s location, the market and the real estate cycle, Zehmer requests a 10-year period for construction of the first two phases.
The property, which is remote from the commercial centers of Southside, is 1.7 miles south of Florida 9B along Philips Highway, also known as U.S. 1. Its address is 14485 Philips Highway.
“Although we are optimistic that the U.S. 1 site will eventually mature into a highly desirable location for the planned project, we believe that a realistic timeline for development is in the five- to 10-year time frame,” Zehmer wrote in a July 8 letter to the district.
Frapag does not want to build speculative structures because of their size and cost, the letter said.
Zehmer wrote that until the area develops into “a recognizable and desirable submarket,” a suitable tenant would be unlikely to consider the site without major rent concessions.
That affects financing and means development would take time.
He also notes there have been announcements about large projects with office buildings within 5 miles of the site, including Durbin Park and Nocatee as well as E-Town along Florida 9B.
Those projects are not expected to gain momentum for several years, Zehmer said.
It could take about two years to plan, design and build each office structure.
“Anything can happen. Someone could come along tomorrow and want something built,” he said.
Also, a downturn in the real estate cycle, which he said could start in two to four years, would delay leasing, financing and development.
The market could use more office space, said Christian Harden, president of the NAIOP Commercial Real Estate Development Association Northeast Florida chapter.
“New construction is welcome news for our industry,” he said Thursday.
Harden said infrastructure improvements at Florida 9B and Interstate 95 along with retail development at Bartram Village and strong housing options in northern St. Johns County make the Powers Bay location a logical spot for new offices.
“I would imagine that from an employee recruitment standpoint, that location would be very attractive to professionals who live in Nocatee,” said Harden, who is a principal at NAI Hallmark Partners.
The plans indicate the potential for a substantial project.
A summary filed with the district states that Powers Bay would be an 11-building, 572,170-square-foot development comprising 517,000 square feet of office space and 55,170 square feet of retail stores.
At the same time, site plans indicate a 10-building, 593,833-square-foot project comprising 541,400 square feet of office space among six buildings and 52,433 square feet of retail space among four structures.
First-phase plans show a veterinarian’s office and a two-story, 24,400-square-foot office building.
Second-phase designs show a four-story, 114,000-square-foot office building; two three-story, 85,500-square-foot structures; and three retail buildings totaling more than 42,000 square feet. That phase also would include an interior road system.
Zehmer said in the letter he anticipates pre-leasing a large part of each building before starting construction.
“No lender will finance a project of this size without a significant pre-lease commitment by one or more tenants,” he wrote.
He considers the likely candidate to be a large, high-credit tenant needing more than 100,000 square feet of space.
“Although these types of tenants surface in the Jacksonville market from time to time, the owner anticipates an extended period of time,” at least three years, to market and initially lease the building.
Frapag’s group of companies has been involved in real estate development for about 25 years with projects in Atlanta, Boston, Chicago, Dallas, Phoenix, Jacksonville and other cities.
Frapag acquired the Philips Highway property in 2005-07. The district issued a Formal Wetland Determination in 2010. This week’s application for an Environmental Resource Permit is another step in the process.
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