Developer J.J. Lamberson said Tuesday that pending permits, construction could be completed by October on the estimated $3.7 million Family Dollar and McDonald’s projects Downtown.
“The City has been working with us and we think we will have it permitted sometime in July,” said Lamberson, president of Twin Rivers Capital LLC and managing member of Market Street Retail LLC, which will own the property and lease to the two national retailers.
Lamberson is based in Charleston, S.C., and said his group is Family Dollar’s preferred developer in the Southeast.
Lamberson intends to buy the 1.6-acre site for the Family Dollar and McDonald’s projects at 233 E. State St. Warren Motors Inc. owns the property and operates a dealership there.
Warren Motors President Ellis Warren said Monday the dealership, which has operated at the site for 23 years, would move to Northwest Jacksonville.
Lamberson said he previously has bought other Warren property for Family Dollar development in Jacksonville.
Lamberson said he has developed 10 Family Dollar stores in the metropolitan Jacksonville area. The Family Dollar website, www.familydollar.com, shows 48 stores in Northeast Florida, including 43 in Duval County.
The Downtown location is north of State Street between Newnan and Market streets. Its northern border will be Orange Street.
Family Dollar was looking for a location in that area, Lamberson said.
“It started with them wanting to be in this general vicinity, but land is scarce and expensive,” Lamberson said. He said the Warren site “was one of the few spots we could find.”
“Mr. Warren was one of the people we contacted who was willing to sell,” he said.
Lamberson said McDonald’s was interested in a store on part of the site, which helps to defray costs.
Misty Skipper, a spokeswoman with the Dalton Agency for McDonald’s, said Monday the company expected to start construction by early fall and open before the end of the year.
The McDonald’s website lists 25 restaurants in Duval County.
Lamberson said he has been working on the deal for a year and a half. The time included securing the land, undertaking due diligence, addressing environmental concerns and designing an appropriate plan for two national tenants to locate on the site.
He said it has been challenging.
“It will be a high-profile site and the City cares about it because it is Downtown and they wanted it done right, and we wanted to meet everybody’s expectations,” Lamberson said.
Lamberson said he plans to start demolition on the site as soon as permits are issued and he buys the property.
Lamberson said his group will own the site. Family Dollar will lease the building and land that it will occupy on the west side of the site, while McDonald’s will build its store and lease the land from Lamberson on the east side.
A drive will cut through the site between the two stores and connect State and Orange streets.
The McDonald’s will be across State Street from Burger King.
Lamberson said his group met several times with regulatory reviewers. “Everyone at the City was helpful,” he said.
“It seemed like they went the extra mile to help us in the right direction so we had a shot to get it approved,” he said.
Lamberson said his group has developed all of the Family Dollar stores in Jacksonville in the past five years or so. He said one was just completed and construction is under way on another.
He estimates he has developed up to 60 Family Dollars in the Southeast.
Most are build-to-suits, meaning Lamberson builds the project to Family Dollar’s specifications and the company leases them. He said some have then been sold to private investors.
He said Family Dollar has been moving toward owning its stores, paying a fee for development.
Lamberson said he began Family Dollar projects in Jacksonville in 2005-06.
“The company is doing extremely well and they were doing well before the economic downturn, doing better during the economic downturn and they are expanding rapidly,” he said.
Family Dollar is based in Matthews, N.C. It operates 7,200 stores in 45 states.
According to a Securities and Exchange Commission filing, Family Dollar states that its strategy is to provide customers “with value and convenience continues to attract a wide range of income” brackets, ethnicity groups and life stages.”
“We serve the basic needs of customers primarily in the low- and middle-income brackets. Typically, our customer is a female head-of-household,” it said.
It said its core customer is a female head of household in her mid-40s making less than $40,000 a year.
As of Aug. 27, 2011, about 54 percent of its customers had an annual gross income of less than $40,000 and about 24 percent had an annual gross income of less than $20,000.
A Family Dollar store is typically between 7,500 and 9,500 square feet in size, averaging about 7,100 square feet of selling space. The State Street site plan shows a store about 9,000 square feet.
The Family Dollar SEC filing said its stores generally serve customers who live within 3-5 miles of the store.
About 63 percent of its stores were in strip malls, 35 percent in freestanding buildings and 2 percent were in downtown buildings.
“The relatively small size of a Family Dollar store allows us to select store locations that provide neighborhood convenience to our customers in each of these market areas,” it said.
The stores generally are open seven days a week and operate with the hours of 8 a.m. and 9 p.m.
Its merchandise focuses on core categories, such as health and beauty aids, packaged food and refrigerated products, home-cleaning supplies, housewares, stationery, seasonal goods, apparel and home fashions.
The majority of the products are priced at $10 or less, with about 22 percent priced at $1 or less. The average customer transaction was around $10 in the past fiscal year.
Company sales have been rising.
For the second quarter of fiscal 2012, the company said net income rose 10.7 percent to $136.4 million from $123.2 million the year before. The quarter ended Feb, 25.
Sales rose 8.6 percent to $2.46 billion from $2.26 billion. Comparable store sales, which are those open at least a year. Rose 4.5 percent.
During the first half of the fiscal year, the company opened 184 new stores and closed 36 stores.
“We are accelerating investments to become more relevant to a broader customer base. In the second half of fiscal 2012, we intend to further expand our assortment in key traffic-driving businesses and introduce new categories to capture a greater share of our customer’s
wallet,” said Howard Levine, chairman and CEO, in an SEC filing.
“As a result of these strategic sales-driving initiatives, we now expect that revenues will continue to accelerate throughout the rest of fiscal 2012.”
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