Under the three-week tenure of CEO Lori Boyer, the Downtown Investment Authority has made strides.
Since July 1, the DIA has begun finalizing a contract with real estate firm CBRE Jacksonville to market and sell the site of the former City Hall and Duval County Courthouse on East Bay Street; moved to fill three vacant staff positions; and begun drafting a request for proposals to find a company to create comprehensive marketing material for Downtown.
Boyer, who completed two terms as the District 5 City Council representative in June, said July 9 that Jacksonville leaders and developers need to make deliberate moves now to take advantage of the longest sustained period of economic growth in U.S. history.
That market strength is positive for near-term development, but scares development professionals, she said.
“My outlook is certainly bullish,” Boyer said. “I have this real sense of urgency that we all know real estate markets are cyclical and the fact that it took Jacksonville as long as it did in this cycle to get to this high point, we need to capture it while it’s here.”
The DIA’s priority in the next three years will be to encourage more Downtown housing, Boyer said.
A State of Downtown report for 2018-19 released Wednesday by the nonprofit Downtown Vision Inc. shows in 2018 there were 3,199 housing units on the Northbank and Southbank.
At the time data collection for the report was completed in April, 978 units were under construction throughout the Downtown core, LaVilla and Brooklyn with an additional 3,038 proposed units.
Marketing Downtown
Boyer’s strategy includes creating an efficient marketing campaign for Downtown to draw more out-of-town investment.
She said there is a lack of efficiency in how the DIA has made data available about city-owned and privately held properties and local resources.
Today, that information exists piecemeal across the city’s procurement web portal and in reports from city-affiliated agencies like Downtown Vision Inc.
Following a request for proposal process, a company could produce comprehensive print and online portals for developers, Boyer said. The work also could be completed in-house by whomever is hired as communications specialist, one of the three vacant roles at DIA.
The DIA board would need to take action on how to proceed.
“If I’m going to an (Urban Land Institute) conference, I’m going to have a packet of information on Jacksonville — what our rent rates look like, what our construction costs are and what sites are available,” Boyer said.
Boyer made marketing Downtown a key talking point during her job interview with the board in May, as did DIA’s No. 2 candidate, Gregory Flisram, the senior vice president of Kansas City’s economic development corporation.
If the DIA board agrees, the authority also will implement a tracker for the number of active residential units Downtown. This “dashboard,” Boyer said, would be updated continuously to catalog inventory, vacancy rates and information on housing projects in development.
Ground-level priorities
Proposed uses for ground-floor space will be a focal point for DIA.
In her final months on council, Boyer led the redrafting of Downtown design standards and zoning, which emphasized that first-floor business in corridors like Bay Street should draw people into the urban core.
“We’re clear in our minds that we want Bay Street to have a retail or restaurant or an activated first floor,” Boyer said. “Whether the second and third floor is a hotel or office or residential, the developer can tell us what they’re proposing.”
When developing a property like the Jacksonville Landing site, Boyer thinks first-floor retail, dining and entertainment will have a direct impact on the success of any public green space included in the development.
Demolition of the existing structure will begin by fall, and an RFP to develop the property will be published by January.
“Whether that is engaging because it is a fountain or it’s engaging because it is a stage area where we have people perform … or whether it’s surrounded by restaurants that all spill out on (to the public space),” Boyer said. “But it should be a key focal point for our Downtown waterfront.”
Incentives
Boyer said she will continue to strengthen the DIA’s Retail Enhancement Grant program to ensure that housing and Downtown retail grow at a complementary rate. As a lower value grant program, Boyer said there is a high proportional return on investment from those grants.
The DIA set aside $750,000 for its Retail Enhancement Grant program when it launched in 2014. To date, the DIA has awarded 14 projects a total of $690,645. According to DIA staff, companies awarded the grants invested $3.21 million into urban core properties.
Where Boyer believes she may differ with some Jacksonville developers is her aversion to incentives for hotels, saying she fears the Downtown market could reach saturation.
Downtown Vision’s report shows seven hotels with 815 rooms proposed or in development among the Northbank and Southbank. That would add to the 2,361 rooms in eight hotels operating Downtown.
“I don’t know that it’s shared by anyone, but my personal sense is that I would not be inclined to incentivize hotels right now in the marketplace until we see more of the entertainment venues and residents come online,” Boyer said.
Reducing or eliminating incentives for hotel projects will allow market demand to drive development, she said.
“You don’t need to reach market saturation, but what’s going to happen is if we don’t have entertainment venues and activity rising at the same level, then you will reach that saturation point and we’ll have declining room rates.”