The JEA is soliciting proposals for the purchase and development of 30 acres on the Southbank.

Deutsche Bank considers Southbank in site search

By: 
Mar. 19, 2014

Deutsche Bank is continuing its site search for a consolidated Jacksonville office campus, and one of the locations is a high-profile Downtown property — the Southbank land for sale by JEA.

Four sources who are familiar with the deal but did not want to be identified said the global financial services company would generate thousands of jobs on the 30-acre riverfront site if it chooses the location.

“It would be a rebirth of development on the Southbank,” said one of those sources.

A Deutsche Bank spokeswoman declined comment.

JAXUSA Partnership President Jerry Mallot said Tuesday evening he could not comment about the speculation.

“They’re a wonderful company and have been a terrific asset to the city and have a bright future,” he said. JAXUSA is the economic-development division of the JAX Chamber.

Mayor Alvin Brown and the chamber have been focusing on landing a major Downtown deal, whether it’s Deutsche Bank or another job creator.

Not only would a project bring a high-profile corporate presence and potentially thousands of jobs Downtown, it also would bring home another catch from the October trip to London by city and chamber leaders, who met with Deutsche Bank executives during the visit.

Brown spokesman David DeCamp would not directly address the potential for Deutsche Bank to consider the Southbank JEA site.

“One of the major efforts of the London trip by Mayor Brown and others was a discussion with Deutsche Bank leadership to encourage their growth in Jacksonville,” DeCamp said, declining further comment.

JEA, the city’s utility, is soliciting proposals from developers to buy and develop the property, which had been the site of the former Southside Generating Station. The station stopped production in October 2001. Site demolition and environmental remediation have been ongoing since July 1999.

The JEA issued the RFP on March 11 and has no comment because it is in the “quiet phase” of proposals.

Deutsche Bank, which came to town in 2008, has expanded to occupy almost 300,000 square feet of space among seven suburban office buildings – the five-building Meridian Business Park along Gate Parkway and two buildings in Butler Plaza along Belfort Parkway.

Its workforce is expected to reach at least 1,600-1,800 employees by the end of 2016. Its Jacksonville focus is across the front office and infrastructure groups, such as technology, strategy and operations.

Considering that Deutsche Bank already uses about 300,000 square feet of space, that number is a logical starting point for the size of an office campus. And based on the development of other major corporate office campuses in Jacksonville, a project could be built in phases.

Asked whether the JEA site could accommodate an office park of that size, as well as surface or garage parking, two of the sources familiar with the deal said the structures could be multistory.

Several of the sources say a suburban site makes more sense for Deutsche Bank, but there’s been increasing talk the past several weeks about the available JEA Southbank land, long considered a prime location for a major Downtown game-changer.

The cost of the investment is another question and depends on variables, including the number and size of the buildings, including parking spaces, as well as infrastructure and materials costs.

Deutsche Bank has invested heavily in technology in its leased space, which leads some of the sources to speculate that the company would prefer to stay where it is and build on adjacent land.

Deutsche Bank could pursue a project on land near Meridian, in another suburban office park or on other land. It also could continue to lease office space as needed.

However, a construction project in any location would be one of the largest developments in years.

At a basic construction cost of $150 to $200 a square foot, a project could cost $45 million to $60 million at 300,000 square feet.

The JEA property, at 801 Broadcast Place, is valued at $34.9 million by the Property Appraiser’s Office.

JEA site a Southbank game-changer

The JEA’s Request for Proposals says submissions are due by noon May 6 and will be announced at 2 p.m. that day.

The Southbank JEA site has been marketed before, but the JEA didn’t come to terms with a developer.

The sources didn’t know if a Deutsche Bank project would be submitted by a developer, as a joint venture or by the company.

JEA owns 40 acres there, but said it needs to keep some acreage for a substation, pump station and wetlands. Proposers can bid on the entire site or either the eastern 15 acres or the western 15 acres.

The JEA RFP solicitation includes information about the site’s environmental history. “JEA has completed extensive assessment, soil removal, and soil remediation activities,” it says. “JEA does not expect completion of groundwater remediation activities to delay site redevelopment.”

Development of the JEA site also reflects on the potential to redevelop the adjacent Duval County School Board property and, next to it, the Wyndham hotel, which together encompass another 21 acres.

While one of the sources said Deutsche Bank doesn’t need either of those parcels, it might need an easement from the School Board.

JEA site project would no doubt affect the interest in the Wyndham and its surrounding property, which are for sale. Colliers International Northeast Florida is marketing 10.38 acres along Prudential Drive for $14.9 million. The property includes riverfront land.

Colliers International separately is marketing the 322-room Wyndham, which encompasses 5.8 acres. No price is listed; its 2014 assessed value in progress is almost $7.9 million. Colliers brokers in South Florida are representing that property.

The School Board sits between the Wyndham and JEA on almost 5 acres. While the site has long been mentioned as a possible redevelopment site, Duval County School Board spokeswoman Marsha Oliver said Tuesday there are no current offers or plans for sale.

Meanwhile, a Deutsche Bank project also would be a signature deal for the Downtown Investment Authority.

The authority’s draft development strategy identifies the 64-acre site that comprises the JEA, School Board and Wyndham properties as a possible “catalyst project.”

It describes the 64-acre site within the Southside Community Redevelopment Area as “a logical site” for developments that include offices.

And it indicates financial incentives would be possible. The draft report recommends public and private partnerships be pursued where the authority “can serve as the change agent assisting with land assembly, disposal of property, tax increment financing and issues of bonds that can encourage additional private sector projects.”

Industry curiosity about a possible Downtown site for Deutsche Bank was directed at the JAX Chamber in January.

On Jan. 28, JAX Chamber President Daniel Davis was asked by an International Council of Shopping Centers North Florida Idea Exchange participant whether there was a push to move Deutsche Bank Downtown.

Davis didn’t say yes or no, but said the chamber’s practice for any company looking at the area is “to show them Downtown first.”

“But if that is not where the market succeeds (for the company), we will help them” where it does,” Davis said.

kmaths@baileypub.com

@MathisKB

(904) 356-2466

 Deutsche Bank's 6-year ramp-up

• 2008: Deutsche Bank opens with 100 jobs, pledging a 1,000-job operations center. City and state incentives of $3.28 million are approved in June for the 1,000 jobs at an average salary of $49,200, plus benefits. Deutsche Bank proposes to invest $12.1 million in technology, infrastructure and tenant improvements at the 200,000-square-foot Meridian Business Park along Gate Parkway.

• August 2012: City and state incentives of $1.45 million are approved for 260 jobs. Documents show an average wage of $46,638 and $52,722.

• April 2013: City and state incentives of $2.08 million are approved for 300 jobs at an average wage of $62,063. Deutsche Bank proposes to invest $10 million in tenant improvements, technology, furniture and fixtures.

• September 2013: Plans are filed with the city for Deutsche Bank to take at least 65,200 square feet of space in the Butler Plaza II building along Belfort Road.

• Oct. 9, 2013: The Wall Street Journal features the city in a report headlined “Deutsche Bankers Warm Up to Florida,” saying the bank has been outsourcing back-office Wall Street jobs for years and is moving bankers and traders to “near-shore” locations like Jacksonville.

• Oct. 24, 2013: Mayor Alvin Brown, city and chamber officials call on Deutsche Bank leaders during a visit to London in conjunction with a Jacksonville Jaguars game.

• December 2013: The Daily Record reports Deutsche Bank wants to create an international administrative office in Jacksonville for its securities-related products and services that could create up to 200 jobs, in addition to the 1,600 jobs the bank already expects to have by the end of 2016.

• March: Plans are filed with the city for Deutsche Bank to take at least 30,000 square feet of space at the Butler Plaza II building along Belfort Road.