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Jax Daily Record Thursday, Mar. 28, 201905:40 PM EST

JEA reveals financial details of three proposals for a new headquarters

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Utility expected to select a firm to continue negotiations with on Tuesday.
by: David Cawton Associate Editor

JEA received and published the best and final offers from the three development firms seeking to build the public utility’s new corporate headquarters.

Each proposal would include JEA entering into long-term leases as opposed to owning a new corporate office, customer service center and parking garage.

The company plans to relocate from its Downtown offices at 21 W. Church St.

Two proposals are on the Downtown Northbank and one is on the Southbank.

A decision is expected at JEA's board meeting Tuesday.

First-year rental rates for all the developments range from about $4.7 million to $6.4 million per year, with costs escalating each year after.

Land acquisition and construction costs for the proposals are expected to be funded by each development group through a combination of cash and debt secured by large financial institutions.

It is unclear what additional financial burden JEA would bear, other than an annual lease, ongoing maintenance and other costs associated with occupancy.

The "Lot J" site is in the parking lot west of TIAA Bank Field on the Northbank.

Lot J

Jacksonville Jaguars owner Shad Khan’s Iguana Investments Florida LLC,  partnering with The Cordish Cos., is proposing that the JEA headquarters anchor its “Lot J” development.

That is the parking lot west of TIAA Bank Field on the Northbank.

According to their offer, Iguana and Cordish are expected to purchase the land from the city as part of a larger land sale to accommodate Khan’s development plans surrounding the stadium and along the Downtown Northbank riverfront.

Soft and hard construction costs, tenant improvements, parking costs and off-site improvements for the corporate office building, customer service center and parking garage total $81.23 million.

At Lot J, JEA’s office building and attached customer service center would comprise 176,320 square feet of rentable space. The gross square footage is 185,278.

They offer JEA optional lease terms of 15, 20 and 25 years, all with  rental costs based on square footage:

• The 15-year lease would cost JEA $28.92 per rentable square foot, with the first year’s lease totaling $5.1 million.

• The 20-year lease would cost JEA $27.95 per rentable square foot, with the first year’s lease totaling $4.9 million.

• The 25-year lease would cost JEA $26.99 per rentable square foot, with the first year’s lease totaling $4.75 million.

Each set of lease terms comes with a 2.5 percent annual escalator.

Agreement on a lease, planning, development, construction and other aspects of the project are expected to take about 30 months, meaning JEA could move in by mid-2021. 

Ryan Companies US Inc. proposes to keep JEA in Downtown’s central business district near the Duval County Courthouse.

Northbank Infill

Ryan Companies US Inc. proposes to keep JEA in Downtown’s central business district, moving it to a vacant, city-owned parcel at Adams and Pearl streets near the Duval County Courthouse.

Ryan Companies is expected to purchase the property from the city.

The project would combine the customer service center and the corporate offices into a nine-story tower, with an attached parking garage.

The total rentable square footage comprises 195,426 square feet, part of a 207,810-square-foot development.

Although specific lease term lengths are not listed, Ryan would seek $32.97 per rentable square foot, with the first year’s lease cost at about $6.4 million.

The cost would increase by 2.5 percent each year after.

Ryan estimates the total cost of the development at about $72.2 million. The entire project is expected to take 25-27 months.

Developer Mike Balanky is proposing a JEA headquarters on the Southbank on Kings Avenue.

Southbank

Developer Mike Balanky through his P3 LLC development company seeks to relocate JEA from the Northbank to the Southbank on property he controls along Kings Avenue.

The property at 1201 Kings Ave. is a parking lot between the Kings Avenue Skyway station and two hotels Balanky developed. 

JEA would lease spots in an existing 1,650-space parking garage, in which Balanky controls half the spaces.

His building also combines a customer service center and corporate office in a 193,680-square-foot tower.

According to the proposal, JEA would occupy 176,230 square feet.

His development does not list the exact lease term, but does list an annual base rent of $34 per rentable square foot.

The initial year’s lease would be about $5.6 million, increasing 2.5 percent each year after.

The estimated cost of the development is $81.7 million, which includes all hard and soft construction costs, due diligence, planning and development.

If JEA proceeds with Balanky’s plan, it likely would occupy the space by September 2021.

A final decision

More information is expected Tuesday when the JEA board of directors meets to discuss the offers and select a firm with which to continue negotiations with.

Details of the negotiations were kept secret after the development firms presented their proposals to the JEA board in early February, which is allowed under the utility’s procurement code.

JEA’s 760 corporate employees have occupied a 337,660-square-foot campus, which comprises a 19-story office tower, a six-story customer service center and a six-level parking garage, since 1988.

According to figures provided by the utility in March, JEA has spent more than $8 million on repairs and maintenance to the campus over the past 10 years.

On Tuesday, only four of the seven board members are expected to cast votes – Alan Howard, April Green, Camille Lee-Johnson and the Rev. Frederick Newbill.

Board member John Campion is out with an illness, Kelly Flanagan is abstaining because she is the CFO of the Jaguars, and one seat on the board remains vacant.

The meeting is scheduled at 2 p.m.

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