Deadlines are nearing for EverBank to sign incentives agreements with the City and the state to move 1,000 jobs Downtown and create 200 more.
The company was granted a 90-day extension by the City to Jan. 3 and a 30-day extension by the state to Dec. 22 to sign the agreements.
Another deadline facing EverBank is construction of the relocation space.
The City and state agreed this summer to provide $5.15 million in tax refunds and training assistance to EverBank in return for the Downtown move and job creation.
Paul Crawford, acting executive director of the Jacksonville Economic Development Commission, said Thursday he was optimistic for an announcement soon.
Chris Hand, Mayor Alvin Brown’s chief of staff, said the administration has prioritized Downtown, but he referred questions to EverBank.
“We are hopeful there will be progress, but that is a decision that EverBank has to make,” he said.
EverBank has not commented about the deal this week.
City Council approved incentives agreements in June that call for EverBank to move the jobs, now in the Southside, by Sept. 30. EverBank told the City it has negotiated to lease 225,000 square feet of space Downtown, which would need to
be renovated, furnished and equipped for the employees by that fall deadline.
EverBank also told the City it has negotiated 1,400 parking spaces Downtown.
No site was specified in the agreements except to say it is within the urban core bounded by Jefferson, State and Main streets and the St. Johns River. AT&T Tower 301, the site long identified for the relocation, is within that area. EverBank signed a letter of intent for the space in August, according to people close to the deal.
Building representative Pamela Smith, who has attended the JEDC and City Council meetings at which the EverBank deals were approved, said Thursday she has no comment on EverBank’s status.
Crawford was asked at a JEDC meeting Thursday for an update about EverBank.
“It’s very positive. There should be an announcement in the next week or so,” Crawford said.
Later Thursday, he said he was “optimistic that we will have an announcement in the next couple of weeks.”
He attributed the need for the extension to “details that have to be worked out.”
“The extension that we granted was for them to have more time to work out their lease terms,” he said.
He said that if EverBank does not sign by then, the incentives agreements expire.
“They would no longer be eligible to receive the incentives,” he said.
According to the City, the agreements cannot be extended again.
Work in progress
Space is being prepared at AT&T Tower 301 that could accommodate a major tenant.
The Daily Record reported in late October that AT&T 301 owners were clearing out nine floors of space at the Downtown tower, according to a City building permit issued to Auld & White Constructors LLC.
The City permit, with a demolition project cost of $405,000, showed that Jacksonville-based Auld & White will demolish floor coverings, interior wall partitions and acoustical ceilings of floors 7-9 and 20-25 of the building at 301 W. Bay St.
Auld & White President Ed White said at the time that he did not know who the eventual tenant is for the space. Demolition was “to ready it for a potential tenant,” said White, “getting those floors back to their shell space.”
The architect for the project is Rolland, DelValle & Bradley.
A separate permit would need to be issued to renovate the space for a specific tenant. A build-out of EverBank’s size is typically a process of six to eight months.
Some of the space under demolition had been leased by CSX Corp., which vacated the floors earlier this year to move closer to its Downtown riverfront headquarters. A CSX spokesman said the company had floors 6, 8-9, 20, 24, and 27-28 and parts of floors 4 and 29.
CSX leased 240,000 square feet in the 30-floor tower, which is owned by El Ad Florida LCC of Sunrise.
AT&T also uses eight floors in the building that carries its name. Smith said in April that the building has 956,000 square feet of leasable space. Each floor offers about 30,000 square feet of space.
The warranty deed and property documents show that El-Ad Florida LLC bought the building in 2004 for $90.9 million from Capital Growth of Florida Ltd. The building’s assessed value in 2011 was $45.97 million.
Published reports say that when CSX ended its lease, the property lender moved the mortgage to a special servicer that specializes in defaulted loans.
Large tenant deals are generally contingent on the approval by lenders, who look closely at lease terms. Until lenders sign off on leases, tenants cannot start the process of building out space or even announcing the deal because technically the deal isn’t done.
A source close to the negotiations, who cannot be identified because of confidentiality requirements, expects the deal will be completed soon, saying “that is universally true on all sides.”
The incentives deals
In June, City Council approved two incentives deals for EverBank to make the move.
One was an economic development agreement between the City and company to relocate 1,000 jobs Downtown from the Southside and create 200 new full-time jobs.
Under the agreement for a Qualified Target Industry Tax Refund, the City will provide $420,000 and the state will refund $1.68 million after the company creates and verifies the 200 jobs. EverBank also requested $300,000 in training funds from the state.
The second piece of legislation would give EverBank $2.75 million to offset its costs of moving from the suburbs.
EverBank, based along Riverside Avenue near Downtown, said the $2.75 million would help offset the $26.5 million it said it will spend to move and improve space Downtown to house the 1,000 employees that would relocate from leased space in the Quadrant II and Cypress Plaza office centers, both in Southside. The deal requires the jobs to be moved by Sept. 30, 2012.
EverBank’s options were to renew its current leases, evaluate new sites for construction or relocate to other existing office space, either in the suburbs or Downtown, according to the commission.
Also, the City deal says that EverBank must maintain at least 1,350 jobs among its Riverside Avenue area headquarters and the urban core for at least five years. EverBank has 284 employees at its headquarters, according to the JEDC summary.
Of those 1,350 jobs, 1,000 must be maintained in the core.
The City would make the payment after EverBank moved the jobs and provided documentation.
If it created the jobs outside of those areas, the refund would be $1.3 million. In either case, the City would pay 20 percent of the refund and the state would pay 80 percent, after the jobs are created and taxes paid.
In September, JEDC Executive Director Ron Barton responded to an extension request by EverBank.
In a Sept. 22 letter to EverBank Chairman and CEO Robert Clements, Barton said the economic development agreements were sent to EverBank on July 11 for execution, but that he understood the company “is continuing to evaluate its options regarding relocation and expansion which has delayed execution of the agreements.”
Barton, who left the City Sept. 30, said in the letter that the City ordinances approving the agreements give the JEDC the ability to extend the deadline for executing the agreements by 90 days.
Barton said the deadline was extended to Jan. 3. Separately, the state extended its deadline to Dec. 22.
Downtown
Mayor Alvin Brown, who was elected in May and took office July 1, campaigned on a platform that included Downtown redevelopment.
The Jacksonville Civic Council has focused on the City’s core as well. Its executive director, Don Shea, is on loan to Brown for $1 a year to develop the administration’s economic development strategy for Downtown.
Office vacancy rates are high downtown. A CBRE MarketView for Jacksonville shows a 24.7 percent vacancy rate in the Downtown Central Business District for the third quarter, which ended Sept. 30. CBRE found that the total area office vacancy rate was 21.2 percent.
News about EverBank has circulated since the spring. The Daily Record reported April 21 that EverBank Financial Corp., which is based along Riverside Avenue near Downtown, was interested in a bigger presence on the Northbank. The company also holds naming rights for EverBank Field, on the eastern end of Downtown.
If EverBank leases space in the AT&T Tower 301 and earns naming rights on the building, it will line the St. Johns River with its name on three major structures.
Sources said in April that EverBank was looking for a site to consolidate its suburban operations and that Downtown was an option.
Sources familiar with the deal, but who asked not to be identified because of the sensitivity of the project, said AT&T Tower 301 Downtown was one of several options under review.
EverBank has been leasing space at the Cypress Plaza Business Park, along Philips Highway near Butler Boulevard in Southside. Sources said the company leases about 190,000 square feet there and also leases space in other suburban buildings. The workforce there was estimated near 1,000 employees.
Sources said EverBank would continue to maintain its headquarters along Riverside Avenue, but would consolidate its operations services in AT&T Tower 301 or wherever it chose.
AT&T Tower 301 is a 30-story building anchored by AT&T, which Smith said leased a little more than eight floors of space.
EverBank, based in Jacksonville, reached a deal in before the 2010 season with the City of Jacksonville and the Jacksonville Jaguars for the naming rights to Jacksonville Municipal Stadium, now EverBank Field.
The five-year, $16.6 million agreement restored a naming sponsor to the facility, which was called Alltel Stadium in a 10-year, $6.2 million partnership until it expired after the 2006 season.
EverBank history
EverBank provides banking, mortgages and investment services nationwide, operating through standard banking offices and through its Direct Banking division, by telephone, mail and the Internet. It also is recognized for its “missed opportunity” television ad depicting three 1970s TV executives passing on producing a music channel, ending with the catch singsong line, “it’s raining.”
EverBank reports that its roots stretch back to 1961, although the current company was formed in 1994 as Alliance Mortgage Co., which became a significant mortgage originator and servicer.
In 1998, Alliance Mortgage Co. formed First Alliance Bank and soon acquired Jacksonville-based Marine National Bank.
Meanwhile, EverBank was created as a national direct-to-consumer bank that opened in January 2000.
First Alliance Bank acquired EverBank in 2002, and in 2004, the company took the name EverBank for its operations.
Alliance Mortgage operations moved into Cypress Plaza around 1999 and has continued to operate there as EverBank.
EverBank filed plans for an initial public offering of up to $200 million in stock with the Securities and Exchange Commission in October 2010, but the company still has not completed that deal. The status of the IPO is uncertain, because SEC rules prevent EverBank officials from commenting on a proposed stock sale. The company has not filed any updated documents with the SEC since August.
Contributing writer Mark Basch assisted with this report.
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