by Mike Sharkey
Jacksonville’s City Council has approved another massive downtown residential project. By a vote of 13-4 (Council members Doyle Carter and Dr. Gwen Chandler-Thompson were excused from the meeting), the Council sanctioned $19 million in City incentives for The Strand at St. Johns development on the Southbank.
The project brings the total to five downtown residential projects in the works, all at various stages of development, all receiving millions in City incentives. And, it may be the last such project for the immediate future.
While the Council did ultimately vote in favor of the project, there is a growing worry among several Council members that the City, along with the Jacksonville Economic Development Commission, has reached the end of incentives for residential projects. Council members Warren Alvarez, Elaine Brown, Lake Ray and Lynette Self all voted against the project. Jim Overton was set to vote against the project, but after hearing several other Council members speak, voted to support it.
“I came in the door thinking ‘no’ but you guys have talked me into it,” said Overton.
The Strand is a two-phase, $146 million residential project slated for the Southbank between the Radisson and the Riverplace parking garage on Riverplace Boulevard. Phase I will consist of a 32-story tower with 362 units, a 622-space parking garage and a public park. Phase II will consist of a 36-story tower with 346 units, a 412-space parking garage, a seven-story office tower and another 258 parking spaces. There will also be 10,000 square feet of retail space on the ground floor of the office tower.
Although the American Land Housing Group, Inc. project received Council approval, there was enough hesitation on the part of several Council members that indications are The Strand may be the last major, City-sponsored residential development to go through the pipeline for a while.
“This should be the last project we incentivize,” said Council member Lad Daniels.
Within the last couple of years, four other major residential projects have been created by the JEDC and approved by Council. Between The Shipyards, The Parks at Cathedral, Berkman Plaza and Vestcor Companies projects, the City has awarded over $100 million in incentives. At this point, none have any residents. And, that’s exactly what prompted Council hesitancy last month and also what has them concerned about the immediate future. The four projects represent about 2,000 residential units. Council members like Overton would like to see all of that new residential space complimented by commercial development in the downtown area before the City grants any more residential incentives.
“I don’t know how many more of these we can take,” said Overton. “I think after this project we ought to cool it. My feeling is that at some point we ought not to do another project. I don’t want to overheat the residential market downtown. We can build lofts all day. I’m concerned about these huge vertical projects.”
Overton said the JEDC and the City should allow these projects to demonstrate a desire to live downtown for the next five years and then reexamine what the downtown real estate market will tolerate.
Council president Matt Carlucci voted for the project and guaranteed the units would fill up on both sides of the river. He also promised to never say ‘never.’
“I’m not going to say ‘no more.’ I’ve said that so many times in the past and then said ‘yes’ on another project,” said Carlucci. “I assure you these places will fill up.”
JEDC executive director Kirk Wendland doesn’t believe a total moratorium has to be put on residential development downtown, but agreed that it may be a good time to slow down on such projects.
“We’re all in agreement that we want to see what the existing projects will do,” said Wendland. “We want to see the residential start ups, the leases and see where it all goes. The way we are thinking is that what you want now is to have people living in, leasing or buying these units. That raises the age-old questions. Where do you get your groceries? Where do you eat dinner? Where do you go for entertainment?
“I think the right approach is getting the residential first. If you make the residential attractive, people will come and stay.”
Over the next few years, there just may be a trend by the JEDC to move away from the immense downtown development projects of the last few years. Wendland admitted that if 2,000 residential units are indeed on the way, a major grocery store chain, a movie theater, restaurants and shops will follow. The question becomes, what will be the JEDC’s role in these developments?
Wendland said he and other JEDC staffers will meet to discuss this issue and how to best address it.
“We will sit down and develop a strategy and decide on the best approach,” said Wendland. “The idea now is, you’ve got to have support. In an ideal world, all of that [commercial development at all levels] would spring up on its own. We can do things to help make that happen.”
Wendland is pretty sure it’ll take about six years for all of the current residential projects to go from architectural renderings to tax-paying communities. Once the market has proven itself and people can live downtown without having to drive everywhere, Wendland believes there will be another surge in multi-unit residential projects.
“Two thousand units isn’t where we want to end the day at,” said Wendland.
Overton agreed, saying his concern is not financially based as much as it is real estate based.
“With the exception of $4 million for a park, all of these investments are deferrals of taxes,” said Overton. “We’ve got plenty of capacity in funding to go on forever, essentially. I’m not worried about using all of our money. I’m worried about what the market will bear.”