President of The Art Center Cooperative says finding affordable space Downtown isn't easy.
Hours after the city took control of The Jacksonville Landing on Wednesday, tenants of the struggling 1980s era landmark were given 30-day notices to vacate, fast-tracking Mayor Lenny Curry’s plan to demolish and redevelop the property.
Tenants not receiving notices Wednesday were those not present or who are negotiating with City Hall, said Nikki Kimbleton, city director of public affairs.
The city set aside $1.5 million for tenant relocation assistance.
City representatives delivered estoppel letters to tenants March 28 with former Landing owner Jacksonville Landing Investments LLC, “asking them to agree to the terms of the lease as JLI knew them,” Kimbleton said.
Those city representatives met with each tenant present on the property March 28 and the remainder were informed of the letter by JLI.
On April 26, the tenants each were sent a notice stating once the city took over the Landing in early May, 30 notices of lease termination would be issued.
“The chief of real estate with COJ will be helping with relocation and talking with each tenant individually to determine their needs,” Kimbleton said.
“They’ve been offered multiple opportunities to reach out for help up until now and given lists of available properties as well.”
For Hooters restaurant, an original anchor tenant, as well as BBVA Compass bank, the city has been in communication with their corporate offices about the eviction.
The deed was recorded with the Duval County Clerk of Courts on Wednesday. It shows the city paid $15 million for the property in a sale that closed that day. It bought the property from Jacksonville Landing Investments LLC.
City Council voted 15-1 on March 26 to approve the $15 million payment, $1.5 million to demolish the 32-year-old structure and $1.5 million to help relocate tenants.
On Friday, Curry’s Chief of Staff and incoming Chief Administrative Officer Brian Hughes said vacating the Landing and beginning the demolition process would take 90-120 days.
Some Landing tenants say finding a spot to relocate Downtown will not be easy or inexpensive.
Michelle Rhoades’ aunt Hana Jo and mother Pong Mattiace started their jewelry businesses in a kiosk at the Landing 32 years ago. Hana & Her Sister then moved into a storefront.
Rhoades wants to keep her business Downtown but is uncertain without the guarantee of financial assistance from the city to relocate.
“I don’t want to close up but in order for me to open somewhere else — not just from the build-out but having to get my name out there, having to get advertising — it’s so much money. We’ve already been suffering,” Rhoades said.
Elmir Slavic has operated the counter-service restaurant An Apple a Day since 1997. Slavic said city Real Estate Chief Renee Hunter asked him and other Landing tenants Wednesday to calculate their relocation costs as they consider if the city can assist.
“Still, there are no promises, there’s no numbers, there’s no nothing. I really have not much hope in that,” he said.
After the 30 days, both said they’ll close temporarily and weigh their options.
JLI is part of Jacksonville-based Sleiman Enterprises.
Sleiman changed the Landing tenants’ leases five years ago to include a clause requiring the landlord to give 30 days notice for eviction — reducing the cost for any future lease buyouts.
Slavic said that caused some tenants to leave long before the settlement. The estoppel letters continued the clause when the Landing changed ownership.
“Why do you want to build your business when you have to sign for five years that any minute a 30-day notice can come? That is happening now,” he said.
Rhoades and Slavic are hoping they might be grandfathered into leases in any commercial retail space incorporated into the Landing’s redevelopment.
For one of the nonprofits at the landing, finding below-market rent is a must to stay Downtown.
Ed Malesky is president of The Art Center Cooperative, a nonprofit member gallery and local studio space for artists that has operated in the Landing since 2015.
The Art Center was founded in 2005 for hobbyists who want space to show their work and for an additional outlet for established artists.
JLI stopped participating in the city’s monthly Art Walks, which affected attendance.
Attendance dropped from 10,000 visitors per year to 5,600 last year. This year, Malesky said he’s seeing about 10-15 visitors per day.
Nearby properties more costly
The Downtown Investment Authority has provided tenants with a list of 15 Downtown properties with rental space available from $16 to $24.75 per square foot per year. That would be a significant increase, considering The Art Center is paying $2 to $3 per square foot.
“When we looked at the packet, the preponderance of the commercially available space listed on that packets are at $18 to $22 per square foot, which is roughly nine times what we’re paying now, Malesky told the DIA at its April board meeting.
“That is not something we can absorb,” he said, citing the center’s nonprofit status.
Malesky said he is convinced that without assistance, many of the Landing businesses will leave Downtown or close.
The Art Center is looking at two city-owned properties that are considerably smaller, but the rent is among the most affordable it has found.
Malesky is working with City Council member Reggie Gaffney to see if the city can donate some of the lease costs.
Hughes, who also is interim DIA CEO, said JLI “had an empty shopping mall, and in order to at least have something there, they made a lot of deals on rents and free use of space that simply cannot be matched.”
Hughes said that while a small relocation fee is under consideration for some tenants, there will be no long-term rent subsidies.
“We’d love to keep businesses who are having success in the retail market to stay in the Downtown,” he said.
“It’s simply not fair to subsidize them in an at-market rate space when their neighbor — the 7-Eleven or a baked goods shop — isn’t subsidized at that rate,” Hughes said.
Hughes said the city will be legally obligated to maintain basic safety, security and accessibility to Landing tenants until they move.
The Mayor’s Budget Review Committee last week approved moving $370,000 from other city fund accounts to the Landing for basic operating costs.
“We will need some (money) for a short time to keep certain components operational at the Landing when we become the landlords … while we own it and until we evict all the tenants,” said Sam Mousa, the city’s chief administrative officer who will retire at the end of June, to be succeeded by Hughes.
Mousa told committee members that “once we demolish it,” the city will no longer need the operational money for the Landing.
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