Quartet of buildings priced to sell
A commercial real estate prospector might look at the Laura Trio and the Barnett Building and see lots of potential. The Laura Trio is ideally located and there is some historical significance to the buildings designed by famed Jacksonville architect Henry Klutho in the early 1990s. The Barnett Building has new windows and is situated in the heart of Downtown.
The asking price — about $6.5 million for all four — may really get the potential developer excited. Then, reality will hit.
The asking price is getting contracts signed. It’s the renovation costs — and the red tape that comes with those renovations — that’s preventing someone from closing on the buildings.
“They are not currently under contract, but several people are looking,” said Bob Knight, a commercial agent with Addison Commercial Realty and the main agent looking to sell the buildings, either as a group or split. “Hopefully, we will have them back under contract in a week or two.”
The Laura Trio consists of the Marble Bank Building, the Florida Life Building and Bisbee Building. Most everyone associated with the trio over the past decade — from the City to the Police and Fire Pension Fund to the Kuhn Companies — agrees the Marble Bank Building is the gem and other two can be taken or left, but preferably razed.
It’s likely the buildings would have sold and been renovated long ago if either or both of the Bisbee or Florida Life buildings could have been torn down. However, both have been granted historical designations, making it virtually impossible to raze them.
Given that fact, Knight says the renovation costs become the main sticking point to closing a deal.
“They are big projects with big expenses,” said Knight, who is showing the buildings to a couple of prospective buyers today for the second time in a little over a week. “Buying them is real inexpensive. The cost is in the renovations.”
The closest the Laura Trio came to seeing renovations was three years ago when the Police and Fire Pension Fund purchased the buildings. With the help of $5 million from the City that would have been applied to unfunded liability the City owed the Fund at the time, Fund Executive Director/Administrator John Keane had big plans for the landmark buildings. In addition to new offices and a 600-space garage, Keane was going to put “John’s Place” — a Downtown bistro — in the Marble Bank Building.
In August of 2006, Keane was approached by Orlando developer Cameron Kuhn, owner of The Kuhn Companies. Kuhn offered Keane $6.15 million for the buildings. Keane accepted the deal in February of 2007 and the Jacksonville Economic Development Commission approved $1.05 million in assistance to help Kuhn with the $29.3 million renovation plan. Kuhn also acquired the Barnett Building and began renovations there, as well.
Within several months, Kuhn went bankrupt and a Chicago-based holding company — JDI Trio — took ownership of all four buildings.
Keane recently completed renovations to the old Haverty’s Building, which is now the Jake M. Godbold City Annex. He’s well aware of the price of the four buildings and, given a better economic climate and more leeway with two of the buildings, Keane said he might jump at the chance to reacquire them.
“Certainly, the Pension Fund focuses on Downtown redevelopment and reutilization of existing facilities,” said Keane, adding there is a substantial amount of value added to the Fund and Downtown as a whole when he acquires and restores buildings. “There are challenges with the Laura Trio. The negative is now another two years have elapsed and the buildings are sliding back. In today’s economy, the rehabilitation of two of the three buildings appears to be a financial no-go. To make it economically feasible, one of the two buildings (Florida Life or Bisbee) needs to go.”
Keane said cost aside, the Laura Trio presents structural challenges as well.
Keane said regardless if the Pension Funds gets involved in the Laura Trio again or the Barnett Building, it’s “past time” for developers, the JEDC and the Jacksonville Historical Commission to sit down and iron out a compromise that would make the rehabilitation of four empty buildings plausible.
After all, the asking price is right.