by Bradley Parsons
Staff Writer
The Downtown Development Authority’s managing director assured the City Council last month that the City was following the right track, building downtown’s revitalization on a residential foundation.
Al Battle told the City Council’s Finance Committee the Jacksonville Economic Development Commission was following downtown’s master plan in focusing first on downtown housing. Restaurants, supermarkets and nightlife would follow, he said.
To encourage developers to jump into what had been a stagnant market, the JEDC has subsidized much of the recent residential development. Battle said eight of 10 downtown housing projects had received City money.
Those incentives were beginning to look like “corporate welfare,” said Council member Glorious Johnson, who demanded to know when “we are going to stop just giving money?
“I’m overwhelmed by constituents who think we’re just part of a corporate welfare system,” she said. “How many times are we going to have to prime the pump?”
Johnson’s comments came as the committee considered an incentive package for Riverplace Properties’ San Marco Place. The deal, which ties the City’s subsidy (up to $3.6 million) to the number of market–rate units available in the development, has been considered a model for future incentive packages. Johnson eventually agreed to support the deal, which passed the committee unanimously.
Battle said the package was evidence of a smarter JEDC. If the City spends money on San Marco Place, he said, it will return cheaper housing to the downtown market.
“We’ve realized we want to target market–rate housing,” said Battle. “Most of the projects so far have been at the luxury end.”
Of the 2,300 units being planned or developed for downtown, Battle said about 1,800 of them were aimed at the market’s high end. Battle previously said the sought–after market rate ranges from $220,000 for a 1,000 square–foot unit to about $260,000.
Although the money spent so far has brought development downtown, Johnson said she wanted to see whether the buildings would fill up before spending more. Council member Gwen Yates echoed Johnson’s concerns.
“We have all this housing, but nobody moving in,” she said. “We’re all pushing, trying to make it a viable downtown, but is there any concern we’re at a saturation point? I’m worried about a housing glut.”
Coming from a residential market that was essentially non–existent five years ago, Battle said he considered about 600 downtown residents, “a great response” to development already underway.
The JEDC was evaluating the consumer response to downtown’s market said Battle. He said the current market could support another 2,000 units in addition to the 2,300 already being built. The City wants to ultimately bring 10,000 units downtown.
San Marco Place developer Jay Southerland said he and partner Mike Balanky originally envisioned an office building on the tract of land just off Prudential Drive near Morton’s Steakhouse. He said the design was changed to residential at the urging of City planners, who emphasized the need for cheaper housing.
Like many downtown developments, San Marco Place incorporates retail space into its design. The mixed–use building would generate more money through property taxes than the parking lot that currently occupies the land, said Southerland.