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Jax Daily Record Wednesday, Apr. 13, 201612:00 PM EST

What $200M 'Project Rex' could mean for North Jacksonville

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by: David Chapman and Karen Brune Mathis

Project Rex is the kind of project North Jacksonville desperately craves.

It’s an area close to some of the highest pockets of unemployment in the city. It also offers room to grow for industrial, retail and residential prospects.

In exchange for more than $18 million of incentives, Project Rex’s 1,500 jobs and $200 million private investment for a fulfillment center — with specifications like those of Amazon.com Inc. — would be good for any part of town. But North Jacksonville might need it more than other areas like Southside or Downtown.

“We could really use this,” said City Council member Reggie Gaffney, whose district includes the project site that stretches along Interstate 295 at Pecan Park and Duval roads. “We desperately need jobs in that area.”

RELATED STORY: 'Project Rex' seeks $18.35 million in incentives for 1,500 jobs, $200 million investment

Census tracts showing high unemployment rates bear that out. Within 15 miles south are large swaths of neighborhoods where unemployment rates are greater than 15 percent.

The Jacksonville metropolitan unemployment rate fell to 4.5 percent in February, an eight-year low, according to state records.

Of the potential 1,500 new jobs, 500 would qualify for state incentives because of their high wages that average $50,000. The remaining 1,000 would be lower-paying jobs that could immediately help those seeking employment requiring fewer qualifications.

Areas of the Westside, Northwest Jacksonville and beyond could reach the facility via bus in a relatively short amount of time.

Plus, there have been discussions about the Jacksonville Transportation Authority possibly setting up dedicated lines for the employer, should the deal pan out.

“It’s a big distribution center with entry-level jobs,” said council member Bill Gulliford. “I really like that.”

Gaffney’s support came with mixed feelings. When he was approached by city economic development officials over a month ago, they pitched using millions from the Jacksonville International Airport Community Redevelopment Area.

Gaffney already had shown support for a number of lighting and sidewalk projects throughout the area, along streets like Biscayne Boulevard and Harts and Armsdale roads.

In the battle of blight versus jobs, employment won him over.

“It just made sense,” he said.

It would make a lot of sense for real estate in the area, too.

Whenever a developer turns 171 acres of timberland into a large e-commerce fulfillment center, there will be an impact.

“Anytime you have that kind of magnitude of investment in the area, it will help the rest of the neighborhood,” said Christian Harden, senior vice president of NAI Hallmark Partners and president of the NAIOP Commercial Real Estate Development Association for Northeast Florida.

In addition to the employment, Harden said the center could lead to more area retail stores, services and housing for employees.

To the east of the project site is River City Marketplace, to the north Jacksonville International Airport. South and west are highlighted by subdivisions of various ages and conditions along with commonplace chain stores.

Project Rex is situated in a large area of potential industrial uses — and a fulfillment center that would mean $200 million in real estate improvements, land, equipment and furniture is sure to improve real estate values.

Planned road improvements, mainly along Pecan Park Road that would include new traffic signals, also could boost property values.

According to a letter in the economic development agreement, Atlanta-based Seefried Industrial Properties would head the project. It has experience with large deals.

Its projects include two 1-million-square-foot Amazon.com centers completed in October 2012 in Nashville and in Richmond, Va.

Peter Anderson, vice president of Pattillo Industrial Real Estate and past president of NAIOP in Northeast Florida, said facilities with the description of Project Rex tend to locate in population centers.

“It validates Jacksonville as a good location for distributors and e-commerce companies,” said Anderson, a seasoned industry executive whose employer owns about 1,500 acres and more than 7 million square feet of industrial space in Jacksonville.

He said Jacksonville lagged in the economic recovery and Project Rex “catches us up a little.”

Anderson said companies like Project Rex have a hierarchy of needs and meet their greatest needs first, which explains why Amazon.com already has dozens of fulfillment centers around the country, including two in Florida.

Companies that want to deliver to customers in one day or on the same day need to be geographically positioned to do so.

From Jacksonville, an ecommerce retailer can serve customers from South Florida to North Georgia, for example, as well as points west.

To make that happen, Anderson cited Jacksonville’s regional distribution hubs for UPS and FedEx and the U.S. Postal Service bulk-mail facility.

He said the CSX and Norfolk Southern railroads also have intermodal yards near the site.

Moreover, the North Jacksonville property is within minutes to most of those assets and major interstates.

Yet, there are many decisions to be made before Project Rex, Amazon.com or whatever company is weighing Jacksonville, chooses a destination.

Many companies seeking economic development deals often have a city or two in review when they begin talks with local officials.

Project Rex seems different, said several council members who city economic development officials met with last week.

“My sense was this was more wide open,” said Lori Boyer. “It could happen in one or more cities.”

Gulliford said multiple cities seem to be in the running for a deal this large.

“There are no guarantees on this one, even if we pass it,” he said of the $13.4 million coming from the city and $4.9 million from the state.

Gaffney said he believes the city has positioned itself near the top based on its available real estate.

“I just believe it’s going to happen,” he said.

***

Taxpayer incentives total $18.35 million

City incentives, $13.4 million:

• A 20 percent portion of a Qualified Targeted Industry Tax Refund for $300,000, which covers 500 of the 1,500 jobs. Those jobs are eligible because of an average annual salary of $50,000.

• A Recapture Enhanced Value Grant of up to $10 million over 12 years. Those grants are paid in installments annually based on increases in real and tangible personal property

• An Economic Development Transportation Fund Grant capped at $2.5 million. It will supplement the cost of roads and infrastructure not covered by the Florida Department of Transportation’s portion of the grant.

• A training/hiring assistance grant of $600,000.

State incentives, $4.95 million:

•The remaining 80 percent of the QTI grant of $1.2 million. That brings the total QTI to $1.5 million.

• The FDOT’s transportation fund grant of up to $3 million for the roads.

• A Florida Flex Training Grant of $750,000 for 500 eligible jobs. The grant helps relocating or expanding business cover training expenses for new employees.

***

Could it beĀ Amazon.com?

• The project summary for the Jacksonville proposal says the unnamed company has more than 20 years’ experience in the retail and e-commerce markets.

Amazon opened online in 1995.

• The project summary also says the company employs more than 200,000 people worldwide.

Amazon has 230,800 employees, according to its latest Securities and Exchange Commission annual report.

• Seefried Industrial Properties of Atlanta is identified in documents for the Jacksonville project.

Seefried has developed 1-million-square-foot centers for Amazon.com in Richmond, Va., and Nashville, above.

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(904) 356-2466

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