The city of Jacksonville condemned the Berkman Plaza II in August and began taking steps to demolish it, despite a developer’s desire to implode the unfinished 18-story high-rise.
The order came within days of 500 East Bay LLC completing contract negotiations with developer Jacksonville Riverfront Revitalization LLC, which plans to purchase and then level the abandoned 18-story building for a mixed-use project.
The Municipal Code Compliance Division posted an order Oct. 5 condemning the property at 500 E. Bay St., citing unsafe conditions and warning the owner it could be subject to removal by the city.
This follows the Aug. 28 condemnation notice the division mailed to the Berkman II ownership company, stating it had 30 days to correct the violations at the site, or demolish the building, or it could be subject to being torn down by the city.
The notice said the cost of the city’s work would be filed against 500 East Bay as a municipal lien or special tax fine and the issue would be heard by a special magistrate judge.
According to Duval County Clerk of Courts records, the magistrate upheld possible fines from the city of $500 per day related to the condemnation at a Sept. 24 hearing that representatives from 500 E. Bay did not attend.
500 East Bay filed an appeal of the judge’s order Oct. 16 in the 4th Judicial Circuit Court in Jacksonville.
A spokesperson in the city Office of Public Affairs said in an Oct. 29 email that officials have not set a date for the city to raze the Berkman II.
“The City still has several steps to complete in the demolition process prior to the actual demolition, so we plan to continue on that path and encourage the property owner to do the same,” the email states.
“The City can stop its process once the property owner demolishes the property on its own.”
Jacksonville Riverfront Revitalization filed a permit application Oct. 26 to demolish the Berkman II at a project cost of $1 million. The application is under review, according to the city Building Inspection Division.
Jim Bergman, principal Berkman II owner through 500 East Bay, said Sept. 10 that the shell structure and property is under contract with the Jacksonville-based management company.
Jacksonville Riverfront Revitalization intends to redevelop the property with retail use, a 300-unit residential component and public park space.
500 East Bay filed a lawsuit Oct. 30 against the city through attorney Alexander Cvercko of Cvercko & Associates, alleging the condemnation violated due process and seeking an injunction from the court.
The complaint states the city’s Aug. 28 order was vague and failed to provide notice that it can be appealed.
“The Condemnation Notice further states that the structure may be demolished or otherwise made safe by the City, without further notice but then states that The Special Magistrate has the authority to impose fines and/or place an order of abatement by demolition and/or site clearance,” the lawsuit states.
“The Condemnation Notice therefore creates confusion and ambiguity of how the demolition may proceed, either without further notice or by order of The Special Magistrate.”
The Oct. 30 legal filing alleges 500 East Bay did not receive a copy of the notice, but Atlanta-based Choate Construction Co., which holds a promissory note on the property, did.
Court documents show that a notice of the hearing was mailed to 500 East Bay on Sept. 9 and was posted at the subject’s address Sept. 11.
Bergman declined to comment on the court proceedings, and his partner in 500 East Bay, Bob Ohde, did not return a voice message request for comment Oct. 28.
The Aug. 28 condemnation notice lists 500 East Bay’s address as a post office box in Rhinelander, Wisconsin.
The Florida Division of Corporations lists Bergman and the company’s address in Bettendorf, Iowa. Ohde’s registered address with the state division is Ponce Inlet in Florida.
Because Jacksonville Riverfront Revitalization has not taken ownership of the building, it is not a party to 500 East Bay’s condemnation dispute with the city.
Park Beeler, co-lead of Jacksonville Riverfront Revitalization’s manager, JRR Management Partners, said the development company notified the Downtown Investment Authority in July of its plans to purchase, implode and redevelop the Berkman II.
“From our standpoint, we found it quite curious why the city would, after 13 years of it sitting there, all of the sudden decide to tear it down. It’s not a danger to people. It’s not going to fall,” he said. “We just want to complete the closing and conduct the demolition ourself at our own expense, at no cost to the city.”
This is the second time this year the city has condemned the high-rise shell, which has sat incomplete along the St. Johns River for nearly 13 years.
A notice was posted Jan. 10 on the fence surrounding the Berkman II. The owners were given until Feb. 21 to correct violations, according to the notice of appeal.
Documents posted at the property in January cited violations including incomplete construction; damaged fencing; garbage, trash, rubbish and debris; overgrown vegetation; and “graffiti markings or artwork which contributes to neighborhood blight or other blighted conditions.”
The court document states the city re-inspected the Berkman II site July 23 and Sept. 15.
Developer demo
The developer hired Arwood Inc. as the project’s demolition contractor. Subcontractor Controlled Demolition Inc. of Phoenix, Maryland, would execute the implosion, according to an Oct. 23 letter from Arwood filed with the permit application.
Controlled Demolition was one of two contractors that brought down the old City Hall Annex Building in January 2019. It would need a city permit before it can implode the structure.
Bergman gave his consent for the developer and Arwood to proceed with the demolition in an Oct. 5 letter to the city’s Code Enforcement Division.
If the demolition permit is approved, Bergman said the developer is targeting implosion after the Nov. 7 Florida-Georgia football game and before Jan. 1.
He said the implosion will be engineered to drop the Berkman debris to the east onto the Shipyards property.
Bergman said an application is filed with the Downtown Investment Authority for conceptual approval for the debris drop. The city owns the Shipyards property and the DIA reviews projects.
The right of way that provides access to the Downtown Riverwalk from Bay Street would be temporarily closed and landscaping removed during implosion and cleanup, according to Bergman’s letter.
He told city code enforcement that debris processing and removal would take three to six months.
JRR Management Partners is led by Brian Wheeler, owner of GGI Tapestry LLC and a former Genesis Group partner; Beeler, F3 Global Solutions managing member and a former executive at The Charter Co.; and Chris Young, president of Charlotte, North Carolina-based Biotech Restorations Holdings LLC.
Jacksonville Riverfront Revitalization has a group of unnamed investors that Beeler said will not be announced until after the sale closes.
Beeler said Sept. 9 that he anticipated closing on the Berkman within 60 days.
Duval County Property Appraiser records show that 500 East Bay bought the Berkman Plaza II for $4.75 million from Choate in July 2018.
Choate, the project’s original contractor, acquired the property in a foreclosure sale in 2014. Beeler said his management group is completing an agreement to assume responsibility for a promissory note the construction company has on the Berkman Plaza II.
Choate also has consented to the implosion, according to Bergman’s letter to city officials.