Spend $41 million or look for another place to do business.
That’s the challenge facing JEA in the next few years as its office tower and customer service building Downtown along Church Street are showing their age.
Chief Financial Officer Melissa Dykes said Monday the building’s plumbing is leaking and causing water intrusion and damage in the basement, where the building’s emergency generator and other critical equipment are located.
Heavy rain also caused flooding in the basement, she said during a budget presentation to the publicly owned utility’s Finance & Audit Committee,
According to the report, a storm surge of 2 feet or more would cause the electrical system and chilled water pumps in the tower to fail.
“If we were hit with a Category 3 (hurricane), we likely would be out of this building for months,” Dykes said.
Other “operational risks and challenges” identified with the buildings are the elevators, HVAC system and the fire protection and security system, which Dykes said does not meet current standards.
There are 73 “major failure points” in the elevators in the 19-story tower. One elevator recently was out of service for several weeks while JEA waited for parts that no longer are readily available.
One of the HVAC units is at the end of its service life and the air intake for the lower seven floors of the tower is at street level. That allows vehicle exhaust and other contaminants to enter the building, according to the report.
In addition, the foundation is settling and cracks are beginning to form on the exterior of the tower.
The buildings, which house JEA’s administrative, customer service and other management and planning department operations, were constructed in 1962 at a cost of $15 million.
Originally dubbed by the developer as the “Downtown Center,” the structures opened in 1963 as the Universal-Marion Building.
In addition to office space for government agencies and law firms, it also was the address for Ivey’s department store.
On the building’s roof was “The Embers,” one of only seven revolving restaurants in the world. It eventually closed and the space now is used as a conference room.
JEA purchased the tower, customer service building and the adjacent parking garage in 1989 for $8 million. According to the Duval County Property Appraiser’s Office, the 2015 in-progress assessed value of the property is $13,278,600.
Paul McElroy, JEA CEO, said the utility’s capital improvement money the past several years went toward the electric and water systems. No funds were budgeted for facility updates.
“There has been a deliberate under-investment in facilities,” he said.
McElroy said he supports maintaining JEA’s headquarters on an urban campus.
“The goal is to stay Downtown,” he said. “We are anchored to Downtown.”
That could mean the only options would be to repair the building’s deficiencies or tear it down and build a new structure on the site to replace it.
The estimated cost for demolition and replacement is listed in the report at nearly $44 million with the caveat that replacing the building would involve “significant uncertainty in cost estimates.”
Moving JEA’s more than 750 Downtown workers into a new space nearby likely would not be an option.
Finding 300,000 square feet of single-site office space Downtown for lease would be a challenge, said Traci Jenks, senior director of brokerage at Cushman & Wakefield.
She said that amount of space in a single building is not available for lease Downtown. It could be available in a suburban office park, she said, but construction might be the best choice for the size needed.
“It’s more of a ‘build-to-suit’ opportunity for something that size,” said Jenks.
Dykes said the question of what to do about the building is in the “planning phase,” but repairs to stop the water leaks will have to be made within 12 months.
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