Study: Shipyards site contaminated, needs cleanup; extent, price still unknown

[downtownbrown]

Interesting. So you can just submit fiction with a wink and a nod?  Nobody believes any of it on either side of the transaction?  Does anyone know what the timeline is for actual agreements and real work?  Looking like Rummel across the river is miles and years ahead of Khan at the moment.

[ChriswUfGator]

It's not that it's gamesmanship, downtownbrown, more like as the project evolves and they get to start seeing some deposit / sales numbers, they have the flexibility to alter the mix and number of units based on the market demand. If you're dealing with a mixed use development, for example, and your bottom line commitment is X% amount of public space plus street level retail, then once you've gotten beyond that and you see that office condos or leases are outselling residential, then you want to be able to respond to the market. Generally you push through everything that you can get, and see where the market guides it from there. There will be a bottom line with the city that will cover public spaces and retail, but if they do it right they'll leave him some flexibility on the rest. That's actually what you want.

[thelakelander]

http://www.coj.net/departments/downtown-investment-authority/docs/shipyardsproposal.aspx

First I've read the actual term sheet.  I didn't realize how specific it is.  5.1 acres of fill? 525 boat slips? 662 residential units?

That is all part of a standard development agreement for a large multi-use project (DRIs aren't really used much in Florida anymore) where they are rezoning the property and establishing vesting rights up to a certain intensity/mix of uses.

I wouldn't put much stock in this being what the actual product looks like (the vast majority of the time developments like these never achieve the maximum intensity in which they are approved for at full build out)... its just all part of the necessary due dilligence on a redevelopment deal of this magnitude.

Those DRI numbers are Trilegacy's from a decade ago.

What does stand out is the things the city is required to pay for.....outside of the $36 million for environmental:

1. Improvement of Bay Street infrastructure (potable water and fire, sewer collection and pumping, storm water conveyance and treatment)
2. Stormwater treatment and storage (on-site and off-site)
3. Construction of mooring space for the USS Adams
4. Filling in 5.1 acres of land on the shipyards site.
5. Bay Street streetscape (hardscape, landscape, lighting and wayfaring signage)
6. Bay Street transportation improvements (turn lanes, bus pull offs, signalization, signage, etc.)
7. Improvements to Hogans Creek greenway (hardscape, landscape, lighting, street modifications, etc.)
8. Riverwalk on shipyards site
9. Public spaces on shipyards site
10. Restoration or construction of the shipyards bulkhead

Paying for these items will easily clear $100 million in public money......just saying....

For a town that can't get the public component of the Trio off the ground, it will be interesting to see where the money to fund all of these items will come from.

[fieldafm]

Interesting. So you can just submit fiction with a wink and a nod?  Nobody believes any of it on either side of the transaction?  Does anyone know what the timeline is for actual agreements and real work?  Looking like Rummel across the river is miles and years ahead of Khan at the moment.

Not claiming its fictitious... just indicating that the standard practice is to establish vesting rights up to a certain intensity/mix of uses so that the local government can't come back and arbitrarily downzone your original development agreement. That creates instability and uncertainty... and you want to strip out as much regulatory risk in a development agreement that will reach into the $billions b/w private and public monies once fully built. The market is going to determine what your final product looks like (remember, what is now the apartment complex at 220 Riverside was originally going to be an office complex).

It's pure speculation but based on experience... if both sides come to an agreement (lots of public $ at stake), then this is probably a 15 year (or more) type of project.

As far as Healthy Town, lots of people talk about the development timelines of WaterColor and Southwood for comparison (two DRIs Rummel was involved in while running St Joe)... I think that's a little apples/oranges as WaterColor is almost 500 acres and Southwood is a little over 8,000 acres (for comparison, Nocatee is about 13,000 acres). Because of the sheer size (and the fact that those developments were not in urbanized areas), those developments took over 20 years.
But, if I had to guess, Healthy Town may be up to a 10 year project (its taken NAI Hallmark about 10 years to get 220 Riverside developed after several fits and starts).

Keep in mind, the likelihood of another downturn in the r/e market as rates rise (particularly for multi-family) will slow down these timelines signficantly.

[Tacachale]

http://www.coj.net/departments/downtown-investment-authority/docs/shipyardsproposal.aspx

First I've read the actual term sheet.  I didn't realize how specific it is.  5.1 acres of fill? 525 boat slips? 662 residential units?

That is all part of a standard development agreement for a large multi-use project (DRIs aren't really used much in Florida anymore) where they are rezoning the property and establishing vesting rights up to a certain intensity/mix of uses.

I wouldn't put much stock in this being what the actual product looks like (the vast majority of the time developments like these never achieve the maximum intensity in which they are approved for at full build out)... its just all part of the necessary due dilligence on a redevelopment deal of this magnitude.

Those DRI numbers are Trilegacy's from a decade ago.

What does stand out is the things the city is required to pay for.....outside of the $36 million for environmental:

1. Improvement of Bay Street infrastructure (potable water and fire, sewer collection and pumping, storm water conveyance and treatment)
2. Stormwater treatment and storage (on-site and off-site)
3. Construction of mooring space for the USS Adams
4. Filling in 5.1 acres of land on the shipyards site.
5. Bay Street streetscape (hardscape, landscape, lighting and wayfaring signage)
6. Bay Street transportation improvements (turn lanes, bus pull offs, signalization, signage, etc.)
7. Improvements to Hogans Creek greenway (hardscape, landscape, lighting, street modifications, etc.)
8. Riverwalk on shipyards site
9. Public spaces on shipyards site
10. Restoration or construction of the shipyards bulkhead

Paying for these items will easily clear $100 million in public money......just saying....

For a town that can't get the public component of the Trio off the ground, it will be interesting to see where the money to fund all of these items will come from.

Something tells me this is going to change a good bit now.

[tufsu1]

As far as Healthy Town, lots of people talk about the development timelines of WaterColor and Southwood for comparison (two DRIs Rummel was involved in while running St Joe)... I think that's a little apples/oranges as WaterColor is almost 500 acres and Southwood is a little over 8,000 acres (for comparison, Nocatee is about 13,000 acres). Because of the sheer size (and the fact that those developments were not in urbanized areas), those developments took over 20 years.

just a small correction (and only because I spent about 8 years working on the project).....

SouthWood itself is about 3,200 acres and was projected to take 20 years to build out.  Given that we are now more than 15 years in, pretty sure I can safely say it will be far more than 20.  While the residential component is tracking along, the office, commercial, and industrial are not.

There is/was also a proposed DRI adjacent to SouthWood.  The Southside project, as it was known back in 2006, is another 1600+ acres.  The DRI application was submitted, but progress halted when the economic downturn occurred.  Not sure where it stands in the approval process now.

Other than the small correction, I completely with agree with fieldafm on this.

[fieldafm]

I was counting all properties and the corresponding conservation lands in the 8k figure. I thought that was all part of the original DRI because it was all Joe-controlled (although seperate companies).

EDIT:
I concede, I just looked it up and CRCDD has it listed as 3,287 acres.

Also, I guess the Community Development District concept is forever dead in Florida. Heck, even Southwood (which is in better fiscal shape than many CDDs) is now delaying some of their transportation mitigation fees.

[hiddentrack]

Mark Lamping was on Jaguars Today with Mike Dempsey, and spoke for a few minutes about the Shipyards:

http://www.stationcaster.com/player_skinned.php?s=631&c=3491&f=4482103

That portion of the interview starts around 14:29 in. A few points for anyone unable to listen:

• No mention of the environmental study.
• Timetable is important to Iguana. They are anxious to get started and committed to the project.
• Lamping is very optimistic it will come to fruition and believes there are aligned interests between what the Iguana is trying to do and what is needed for the development of downtown.
• Lenny Curry has been in communication and expressed his support.

[simms3]

http://www.coj.net/departments/downtown-investment-authority/docs/shipyardsproposal.aspx

First I've read the actual term sheet.  I didn't realize how specific it is.  5.1 acres of fill? 525 boat slips? 662 residential units?

That is all part of a standard development agreement for a large multi-use project (DRIs aren't really used much in Florida anymore) where they are rezoning the property and establishing vesting rights up to a certain intensity/mix of uses.

I wouldn't put much stock in this being what the actual product looks like (the vast majority of the time developments like these never achieve the maximum intensity in which they are approved for at full build out)... its just all part of the necessary due dilligence on a redevelopment deal of this magnitude.

Those DRI numbers are Trilegacy's from a decade ago.

What does stand out is the things the city is required to pay for.....outside of the $36 million for environmental:

1. Improvement of Bay Street infrastructure (potable water and fire, sewer collection and pumping, storm water conveyance and treatment)
2. Stormwater treatment and storage (on-site and off-site)
3. Construction of mooring space for the USS Adams
4. Filling in 5.1 acres of land on the shipyards site.
5. Bay Street streetscape (hardscape, landscape, lighting and wayfaring signage)
6. Bay Street transportation improvements (turn lanes, bus pull offs, signalization, signage, etc.)
7. Improvements to Hogans Creek greenway (hardscape, landscape, lighting, street modifications, etc.)
8. Riverwalk on shipyards site
9. Public spaces on shipyards site
10. Restoration or construction of the shipyards bulkhead

Paying for these items will easily clear $100 million in public money......just saying....

For a town that can't get the public component of the Trio off the ground, it will be interesting to see where the money to fund all of these items will come from.

You would think they can impose Mello-Roos like any of the DRIs listed above (Watercolor, Southwood, etc) so that residents and commercial owners within the Shipyards can pay for these improvements themselves, but a developer strokes the initial check and simultaneously issues a bond to pay the taxing authority back (taxing authority in turn issues a bond), and upfront risk takers (developer) gets paid back once certain hurdles are cleared, and taxing authority collects higher taxes from those in its jurisdiction - the larger City of Jax not the one guaranteeing any of these bonds.  Meanwhile, the developer/sponsor likely also goes to a bank/company to issue surety bonds to guarantee a certain amount of work the City of Jax may want done on land it technically owns.

Granted, the risk in this type of development in Jax is that it's unproven, so sponsors (both on the development and financing side) might be slim, but I wonder if this is an option being explored.  I mean we are talking what a 1,000-1,500 residential units, hotel, significant office space, and retail?  We are talking a master developer who will develop the land and then sell parcels to other developers to build individual components.  This is really no different a process than the process undergone to develop these large suburban communities of similar $$$ scope.

Mello-roos is definitely enacted by master-planned developments of similar nature in cities all across the US.

I also wonder if there would be EB-5 financing available for this.  A project of this size can allow for several tranches of EB-5 money, it can lure Chinese investors to Jacksonville, and actually bring new Chinese residents to the city.  They love this kind of thing - but where is the nearest EB-5 regional center?

You can definitely have both TIF and CFD financing, as well as EB-5, and other alternative means.

It can and should become a very complex matter if it means something gets done.  All parties, city and Khan and any other developer interested in being a part of this large deal, should be working with consultants from other cities that have worked firsthand on similar developments.  Legal fees should be spent right now.

There is probably financing available and probably ways to get this whole thing done in a ~10 year time frame WITHOUT involving City of Jacksonville taxpayer money.

The Laura Street Trio is a bit different as its scale is so small that it just becomes unfeasible without public assistance.  The scale we're talking about with the Shipyards is about as big as it gets in Jax - it is big.  The risk is that nobody knows the value of developed riverfront land in Jacksonville, and nobody knows the size of the pool of credible developers that might want to be involved - and if they're open to partnering on the vertical pieces (i.e. master developer transfers interest to a sub that is a JV with a 3rd party, with potential catch ups for the City depending on how Jacksonville does get involved, etc etc).