Developer Hillwood Investment Properties reports the February sale of the GE Oil & Gas plant property marked a milestone at AllianceFlorida at Cecil Commerce Center.
Hillwood’s first-quarter report to the city, released Monday, said the monetization of the building put AllianceFlorida “into the black” from a profit-and-loss standpoint and allowed it to deliver an additional-consideration check of about $1.5 million to the city.
Dallas-based Hillwood is the city’s master developer at Cecil Commerce Center, a former naval air station. Hillwood is under contract for a building development schedule at the Westside business park.
The city’s September 2010 agreement with Hillwood contains built-in performance benchmarks and provides for the city to receive a portion of Hillwood’s net proceeds from development.
Hillwood bought the GE Oil & Gas site from the city in August 2013 for $294,290 and then developed a speculative 510,000-square-foot structure.
It sold the 40-area property and building to a San Diego investor in February for $57.6 million, five months after the announcement that GE Oil & Gas would lease the building.
“While deals of GE’s quality are rare, we are optimistic that the pace and size of future transactions will be such that AllianceFlorida will remain ‘in the black’ and we are able to continue to deliver future additional-consideration payments to the City as we close and monetize future projects in the park,” the report said.
Meanwhile, Hillwood is laying the groundwork for a second large spec building at AllianceFlorida. Site plans in a NAIOP tour book show the structure as a 405,000-square-foot building, expandable by 94,500 square feet, at New World Avenue and Waterworks Street.
Hillwood Senior Vice President Dan Tatsch said previously the site plan in the tour book was intended to illustrate a likely layout for the 36.3-acre property next to the Saft America Inc. and FedEx Ground Package System Inc. projects.
Tatsch said Hillwood had no immediate plans to start construction on the building. He was traveling Monday and Tuesday and did not respond to an email.
Other highlights in the report include that Hillwood:
• Engaged in preliminary planning discussions with the city for “Project Hue,” an undisclosed company interested in a 150,000-square-foot facility for aviation-related manufacturing. Hillwood awaited direction on the next step in the decision process.
• Awaits a Request for Proposals for a 600,000-square-foot distribution center, expandable to 750,000 square feet, from an undisclosed company. Hillwood met with prospect representatives and its site-selection team in January. It offered two parcels as potential build-to-suit options. “Project X” is completing a multistate site-selection tour and should issue the RFP soon.
• Responded to broker inquiries about undisclosed prospects interested in leasing about 500,000 square feet of distribution space, 400,000 square feet of warehouse-distribution space and 100,000-150,000 square feet of warehouse-distribution space.
• Responded to a preliminary inquiry from an undisclosed prospect interested in buying land for construction of a 200,000-square-foot facility that Hillwood believes would involve aviation-related manufacturing.
• Also responded to another preliminary inquiry for a potential aviation-related manufacturer, referred to as “Project S,” that would buy land to build a 50,000-square-foot facility.
• Continued discussions with a retail developer interested in buying land for development of a neighborhood retail center.
• Contacted a prospect believed to be interested in locating a distribution center in Jacksonville. Hillwood said it did not know the size of the center but considers it is potentially for e-commerce fulfillment. Initial discussions indicated the prospect is not ready to move forward with the requirement.
Hillwood also reported that some prospects came to an end by:
• Learning that the undisclosed “Project Sunshine,” which was interested in a build-to-suit manufacturing campus of 850,000 to 1 million square feet, canceled its plans, reportedly due to financing challenges.
• Learning that a 240,000-square-foot food-service distribution center that had been interested in a build-to-suit project had focused on an existing building and eliminated a build-to-suit from consideration.
As master developer, Hillwood has a long-term contract with the city to develop up to 30 million square feet of industrial and retail space at Cecil Commerce Center in West Jacksonville.
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