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Jacksonville Record & Observer 9/13/18

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September 13-19, 2018

Mathis Report: Pingpong restaurant nears debut

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The former City Hall Annex at 220 E. Bay St. has been vacant for years. The site is proposed for a new convention center.

Timeline in place to implode JACKSONVILLE old City Hall Annex, raze former courthouse. BY DAVID CAWTON STAFF WRITER

T Record & Observer JACKSONVILLE he New Year Downtown

will start with a big bang. A project schedule shows the city intends to implode the old City Hall Annex at 220 E. Bay St. the second weekend of January. Sam Mousa, chief administrative officer for Mayor Lenny Curry, said Wednesday that the date is subject to change. Environmental Holdings Group LLC of North Carolina submitted the lowest bid of $7.98 million in June to demolish the 16-story annex and the old Duval County Courthouse at 330 E. Bay St. The city awarded the bid in July. Mousa said the seven-story courthouse building will undergo “conventional demolition” that doesn’t require an implosion. The courthouse, built in 1956, comprises almost 360,000 square feet of space, much more than the annex, according to property records. The annex, built in 1960, contains 200,000 square feet of space but is much taller than the courthouse. Environmental Holdings Group obtained permitting and began work in early August on both buildings SEE ANNEX, PAGE 10

What’s next for site: Three developers pitch plans for a convention center complex BY DAVID CAWTON STAFF WRITER

If developers proceed with building and operating a new convention center in Downtown Jacksonville, the city’s financial obligation could be as much as $1.2 billion. Financial details released Tuesday by firms interested in building a new

Former Layla’s in San Marco could become English-themed pub PAGE 7 The Basch Report: Tegna expecting windfall from political ads PAGE 6 OBSERVER MEDIA GROUP

convention center, hotel and parking garage highlighted the city’s longterm financial responsibility. Three development groups responded to a request for proposals issued by the Downtown Investment Authority to build a convention center complex along East Bay Street at SEE PLANS, PAGE 11

YOU SHOULD KNOW

Alan Bliss guides Historical Society PAGE 16 VOLUME 1, NO. 15 • ONE SECTION


Page 2 • Thursday, September 13, 2018

Jacksonville Daily Record/Jacksonville Record & Observer

WHAT’S TRENDING

More than 1 million people need someplace to go

SCOTT SAILER EDITORIAL RESEARCH DIRECTOR

Hurricane Florence evacuees booking rooms in Jacksonville as the storm heads toward the Carolinas and Virginia. Some Hurricane Florence evacuees from the Carolinas, Virginia and Georgia looking for a safe place to weather the storm are making their way to Northeast Florida. They not only are booking rooms, they are buying supplies for their return home. Yaser Hasan, general manager of the Courtyard by Marriott Jacksonville at Interstate 295, said Wednesday morning the hotel is fully booked through Saturday and inquiries continue from evacuees about room availability. Hasan said the evacuees present special circumstances because they may not be seasoned travelers and might need extra attention. The hotel typically does not allow pets but will take them in from evacuees at no charge. The hotel also deals with insurance companies and the Federal Emergency Management Agency to accommodate people displaced from their homes because of the storm.

Fred Pozin, general manager of the Ramada by Wyndham Jacksonville Hotel & Conference Center in Mandarin, said the hotel experienced a large jump in reservations Monday. He said the hotel is booked Wednesday through Saturday, with reservations changing as the storm track is updated. The influx of North Carolina evacuees started Tuesday, he said. “As the evacuation zones change you get cancellations and new bookings,” he said. Pozin said the hotel is pet-friendly and there have been a lot of requests for water bowls for dogs. He said guests are glued to The Weather Channel. In another economic impact in Jacksonville, Pozin said guests are stocking up on supplies and groceries because they know supplies will be limited upon their return home. At another hotel, a manager who asked not to be identified said there has been a pickup in business since Monday, with the hotel selling more than 30 rooms a day for guest arrival Wednesday and departure Friday. Those visitors are in addition to the hotel’s booking of a tour and a volleyball team for the weekend. Laurie Kopstad, Visit Jacksonville research, reporting and analytics manager, said she has heard from hoteliers seeing increases in reservations, especially from South Carolina. North and South Carolina and Virginia officials ordered the evacuation of more than 1.5 million people as Florence headed to those coastlines with an expected landfall Friday. The storm is predicted to linger over the weekend. SSAILER@JAXDAILYRECORD.COM (904) 356-2466

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Developers break ground on San Marco Promenade Developers broke ground Tuesday on the start of what could become 1,000 luxury apartments near historic San Marco. Chance Partners LLC will begin its Philips Highway project with San Marco Promenade, a 284-unit complex among three four-story buildings on the north end of 17.3 acres between Mitchell Avenue and River Oaks Road. Site clearing started in June and construction, estimated at $34.5 million, is expected to be completed by May 2020. Jeffrey Rosen, a principal partner with Chance Partners, said he considers the project as a catalyst to spark more growth and renovations along Phillips Highway. “The (developer) is trying to develop this entire corridor with over 1,000 units,” said Paul Bertozzi, the president and CEO of Live Oak Contracting, the project contractor.

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Thursday, September 13, 2018 • Page 3

HOME FLIPPING, SECOND QUARTER 2018 The gross return of a flipped home was 68 Jacksonville Florida U.S. percent for Northeast Homes flipped 418 6,614 48,768 Florida in the second Share of all home sales 5.5% 5.7% 5.2% quarter, down from 78.7 Profit per flip $61,200 $55,650 $65,520 percent in 2017. Return on investment

68%

39.8%

44.3%

BY MARK BASCH CONTRIBUTING WRITER

D

on’t flip out over this, but there’s less money to be made these days by flipping homes. A report last week by ATTOM Data Solutions on flipping – the act of buying property with the intent to sell it for a quick profit – found the average return on investment for a house flip in the second quarter this year was 44.3 percent nationally, down from 50 percent the previous year. In the Jacksonville market, the median price of a flip sale was $151,250 in the second quarter, $61,200 higher than the median purchase price, ATTOM said. That translates into a gross return of 68 percent for Northeast Florida flippers. However, that’s down from

the second quarter of 2017 when the median profit was $64,400 and the average return was 78.7 percent. ATTOM defines a flip as any arms-length sale of a singlefamily home or condo that was previously involved in an armslength transaction within the last 12 months. ATTOM defines an armslength sale as one that involves two disinterested or unrelated parties. That excludes situations where a property sells between family members or where the bank is foreclosing on a home and taking ownership. It also excludes quit claim deeds. The average number of days to flip a home in the Jacksonville market was 177 in the second quarter, while it was 186 nationally.

ATTOM Senior Vice President Daren Blomquist said in the report that a fewer number of distressed home sales are making it more difficult for flippers to find discounts, and rising interest rates are making it tougher for buyers to afford flipped homes. “These two forces are squeezing average home flipping returns, pushing investors to leverage financing or migrate to markets with more distressed discounts available to achieve more favorable returns,” he said. In the second quarter, 32.3 percent of U.S. flip sales involved homes first purchased as a distressed sale. That’s down from the peak of 68.2 percent in the second quarter of 2010, when the market was recovering from the real estate collapse

in the 2007-2009 recession. In Jacksonville, 31.8 percent of second-quarter flip sales involved homes that were first purchased in a foreclosure or other distressed sale. ATTOM said 5.2 percent of all U.S. home sales in the second quarter were flips, with 5.5 percent of Jacksonville market sales involving flips. Some markets remain very profitable for flippers. ATTOM looked at 140 metropolitan areas and in nine of those, flippers were selling homes at a price at least double what they paid it for. The top returns in the second quarter were in the Pittsburgh, Pennsylvania, area where after holding on to the property for an average of 206 days, flippers were generating an average return of 162.7 percent. The toughest market to make money was in the Myrtle Beach, South Carolina, area, where flippers were getting average returns of just 5.8 percent. That was far below the second-lowest returns in Boise, Idaho, of 19 percent.

ECONOMIC TRENDS

Home flipping profits take a dip

“These two forces are squeezing average home flipping returns, pushing investors to leverage financing or migrate to markets with more distressed discounts available to achieve more favorable returns.” DAREN BLOOQUIST, ATTOM SENIOR VICE PRESIDENT

MBASCH@ JAXDAILYRECORD.COM

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THE MATHIS REPORT

Pingpong restaurant about a month away KAREN BRUNE MATHIS EDITOR

Smash will offer food, drinks and games at Baymeadows Junction. Here’s a deal bouncing your way: Buy two weekday lunch entrees and get 30 minutes free of pingpong (subject to table availability) to work it off. That’s one of the features coming to Southside as the Smash pingpong restaurant and bar prepares to open in about a month in Baymeadows Junction at 8206 Philips Highway. “This is a nice way to spend your time,” said Smash General Manager Devlin Cathey, who also is executive chef. Smash’s tagline is “Play. Eat. Drink. Repeat.” “Our goal is to provide a unique, locally owned and operated, space to hang out, relax, and play with friends and family,” says a statement by Smash. The 13,000-square-foot space is designed with 12 pingpong tables, and space for more if needed, to attract social, competitive and children’s leagues; team-building events; corporate meetings; and those looking for a place for lunch, dinner or drinks. There are areas for private groups or semiprivate gatherings; a separate area that has a bar and can provide stadium seating for events or to watch competitive or exhibition play; and the main event – pingpong tables. Smash suggests groups consider bringing Jean-Marie Kanani, its executive coach and pingpong pro, to the events to teach groups the rules. Kanani can be booked for private or group coaching. There will be 200 to 250 seats. There is soft seating planned throughout, with lounge seating for customers who might

Special to Daily Record

Devlin Cathey is general manager and executive chef of Smash, a pingpong venue, restaurant and bar expected to open in about a month in Baymeadows.

want to drink coffee or cocktails. Cathey said there will be 25 TVs. The interior is being builtout with design features such as reclaimed wood, barn doors, polished cement flooring, galvanized piping foot rails, hand-painted ceilings, exposed brickwork, drop-down design wood and felt ceilings. Cathey declined to provide an investment cost in the project. Smash will open 11 a.m.-11 p.m. Monday-Thursday; 11 a.m.-1 a.m. Friday and Saturday; and 10 a.m.-10 p.m. Sunday, offering Sunday brunch. Table rentals start at $8 for a half-hour and are higher at nights and on weekends. Cathey expects to employ 65 full- and part-time employees. While food can be consumed throughout the venue, there will be a designated 48-seat dining area for those wanting to eat rather than play. Cathey describes the menu as American bistro. The online menu at smashjax.com shows

Photo by Karen Brune Mathis

Smash is coming to Baymeadows Junction at 8206 Philips Highway.

a list of appetizers, sandwiches, flatbreads, salads, burgers, grilled steaks, chicken and salmon, sides and a kids’ menu. Sandwich prices range from $7-$12; salads, $6-$11; flatbreads, $8-$9; burgers, $12$14; and grill items, $16-$24. There are two bars – the main bar and the one in the stadium area. A drink menu shows $10 “smash” cocktails along with favorites, classics, wines, champagnes and beer. Cathey said there will be 12 beers on tap and six will be local. Cathey said Smash is focusing on local suppliers as much as possible for food, spirits, beer, beverages, labor, interior items and other necessities. “We want it to be a part of Jacksonville,” he said. Along with Cathey, leaders include bar manager Jake Freedlund; front-of-house manager Scott Wiest; executive sous chef John Daley; and sous chef Robert Lawrence. Teamwork is evident with the large SMASH sign assembled with 7,200 pingpong balls. The focus on table tennis means Jacksonville residents will learn more about the game. “It’s a great social game, and it’s quite physical,” Cathey said. Cathey is the former executive chef of the Country Club of Salisbury in North Carolina. Before that, his experience included serving as an executive chef in his native South Africa, working in England (his mother was British) and serving as executive chef on super yachts traveling the East Coast, Bahamas and Virgin Islands. His move to the U.S. came when he reconnected with his high-school sweetheart, who had moved to Fort Lauderdale. They married in 2014 and have two children. Baymeadows Junction is a 150,665-square-foot community retail center at Philips Highway and Baymeadows

HOTEL NOTES

Holiday Inn Express breaks ground near Town Center Ground was broken for the Holiday Inn Express next to the iFly Indoor Skydiving center under construction along Brightman Boulevard near St. Johns Town Center. The 93room, four-story hotel is expected to open in July. FGC Inc. is the lead general contractor. Ameris Bank is the lender. Paramount Construction Group is a subcontractor and working with the interior. Jyostna Jerripothula is the owner. n Hotel Development Partners LLC bought property near Mayo Clinic to build a 155-room, seven-story Residence Inn by Marriott. Through San Pablo RI LLC, the developer paid almost $2.8 million for 2.64 acres at 4915 San Pablo Road S. It bought the land from Steinemann San Pablo LLC. Hotel Development Partners CEO Allen O’Brien said previously the group expects to break ground early in the first quarter of 2019 and open in fall 2020. The site is part of a development at San Pablo Road and Dixie Landing Drive owned by Steinemann San Pablo LLC. Steinemannco. com shows San Pablo Place as a 16-acre site for “upscale mixed-use” to include hotel and retail space.

Road.

Permit applications for West Kernan Apartments filed

The city is reviewing permits for the 301-unit West Kernan Apartments at 12517 Beach Blvd. Waypoint Residential of Atlanta plans to develop the 17 apartment buildings on 26.33 acres at a construction cost of almost $40 million. The units comprise 137 one-, 142 two- and 22 three-bedroom units, permit applications show. There are 12 three-story buildings. Five buildings are two-story carriage houses with two or three two-bedroom apartments. There also is a clubhouse and a maintenance building. Bradley Coe of Colliers International is representing Waypoint Residential in the property purchase. He said previously that interiors will be high-end with finishes that include nine-foot ceilings,

granite countertops and stainless steel appliances. A resort-style amenity package will feature a zero-edge pool overlooking a lake and a fitness center. Coe said Waypoint will close on the land purchase in a few weeks and then start horizontal improvements. Summit Contracting Group is the contractor. He said the targeted average rental rate will be in the range of $1.55 to $1.65 per square foot, similar to the nearby Point at Tamaya apartments. Waypoint Residential also developed that project at 3050 Tamaya Blvd.

New retail center near River City Marketplace Ashco Inc. intends to develop a retail building at 725 Skymarks Drive in River City Marketplace. A rendering at ashcoinc.net shows several tenants, with La Nopalera restaurant at one end,


Jacksonville Daily Record/Jacksonville Record & Observer

Thursday, September 13, 2018 • Page 5

RETAIL NOTES

5.11 Tactical approved for construction

Special to the Daily Record

La Nopalera is shown as a tenant in a rendering of a shopping center called River City Market Place planned at 725 Skymarks Drive.

a Bellezza Nails Spa, at least one more tenant and an unnamed medical facility at the other. The 22,040-square-foot multitenant building is in city review at a $1 million construction cost. Tenant build-out would be separate. Ashco says tenant spaces are available from 1,500 to 3,000 square feet. The project – called River City Market Place – also is in review by the St. Johns River Water Management District. It is near the Aloft hotel. Plans also detail a 2,005-square-foot waterfront patio.

Gateway Village developer buys land Developers of Gateway Village at Town Center bought an outparcel at the property to build a 9,000-square-foot retail building. Jacksonville Gateway Village LLC paid almost $1.14 million for the 1.51-acre Outparcel 2 at the property at Deerwood Park Boulevard and Gate Parkway. It bought the land from members of the Skinner family.

Gateway Village includes the Satori apartments, a RaceTrac gas station and convenience store and two multitenant retail buildings.

Development notes n Perimeter West seeks a city development number for mass clearing and grading along Perimeter Industrial Parkway West. England-Thims & Miller Inc. is the civil engineer. The Perimeter West Industrial Park is at northeast Interstate 295 and Pritchard Road in West Jacksonville. n AJC Logistics LLC will lease 42,000 square feet of additional storage and distribution space at 2020 W. 26th St. in Northwest Jacksonville. Its primary Jacksonville location is at 11084 Cabot Commerce Circle in North Jacksonville. n VyStar Credit Union is renovating a former bank branch at 1600 Hendricks Ave. at a cost of $519,317. Dana B. Kenyon Co. is the contractor. n Surge Jacksonville applied for a certificate of use to operate Surge Adventure Parks Jacksonville in the former Sports

5.11 Tactical has Town Center Promenade in its sights. The city approved construction Aug. 21 for ShayCore Enterprises Inc. to build the 7,040-square-foot building that will be leased to 5.11 Tactical as well as to a nail salon and sushi shop. The construction cost of the shell building is $826,000. Tenant build-out will be separately permitted. The building is on 1.1 acres at 4600 Tropea Way along Town Center Parkway. Irvine, California-based 5.11 Tactical “makes innovative tactical apparel and gear designed for those who engage in the toughest missions.” Plans show 5.11 Tactical will lease 4,000 square feet while the nail salon and sushi shop will lease the remaining two spaces of 1,520 square feet each. n Town Center Promenade is adding a Firestone Complete Auto Care service center at 4628 Tropea Way. The 6116-square-foot center is planned on 0.82 acre. Bridgestone Retail Operations Inc. of Nashville is the owner and developer. n The Escape Game intends to open in late winter at St. Johns Town Center. Based in Nashville, the company will open its second Florida location at the former Gretchen’s Hallmark space at 4720 Town Crossing Drive, No. 107. n Dollar General intends to build at 7194 Wilson Blvd. in West Jacksonville. Fulcrum Construction Group LLC of Daphne, Alabama, is the contractor in the permit application for the

Authority space at the Regency Court Shopping Center. On Facebook, Surge Adventure Park – Jacksonville, FL describes the park as an “indoor airconditioned adventure park facility with wall to wall trampolines, flying trapeze, dodgeball, battle beam, rock climbing wall, foam pit and basketball dunk-

$297,000 project to build a 7,512-square-foot store on 1.03 acres. The site is at Firestone Road and east of Interstate 295. n Walmart is adding a Quest Diagnostics laboratory in its Supercenter at 12100 Lem Turner Road. Skyline Construction Inc. is the contractor for the $100,000 tenant work for the 685-square-foot project. Walmart opened its first Quest lab in Jacksonville at its Regency Supercenter. It’s part of a partnership between Quest and Walmart announced in June 2017 to open labs in supercenters. n Gate filed plans with the St. Johns River Water Management District for two Gate Express Carwashes. One is in Clay County at 7134 Coppergate Drive in Middleburg. The 4,956-square-foot building is planned on almost 2 acres at Blanding Boulevard and Coppergate Drive. Prosser Inc. is the civil engineer. Another is in Duval County at 3504 Blanding Blvd. at southwest Blanding Boulevard and Hyde Park Road. The 5,101-square-foot building is on 1.86 acres. CPH Inc. is the civil engineer. n Kate Spade was approved for interior buildout at the St. Augustine Premium Outlets at 2700 Florida 16. It’s a $175,000 project. n Club Pilates is in review for build-out at Brooklyn Station on Riverside. Hurd Construction is the contractor for the $84,305 project in 1,495 square feet at 150 Riverside Ave.

ing lanes.” The application says Surge will use 30,000 square feet of space at 9292 Arlington Expressway. n The Jacksonville Transportation Authority submitted plans for its proposed First Coast Flyer University Transit Hub at 5800 Philips Highway at Bowden Road, near University Boulevard.

A closed nightclub on the site will be demolished. JTA bought the 2.82-acre property in February for $1.3 million. The project is expected to be completed next year. KMATHIS@JAXDAILYRECORD.COM @MATHISKB (904) 356-246

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Page 6 • Thursday, September 13, 2018

Jacksonville Daily Record/Jacksonville Record & Observer

THE BASCH REPORT

Tegna projects record political ad spending

MARK BASCH CONTRIBUTING WRITER

Company that operates 47 TV stations, including two in Jacksonville, predicts up to $200M in revenue from political ads. This won’t come as any surprise in the current political climate, but Tegna Inc. is expecting record political advertising spending this year. The company. which operates 47 television stations that include WTLV TV-12 and WJXX TV-25 in Jacksonville, said last week it expects revenue of $180 million to $200 million this year from political ads. That’s up from $160 million in the 2014 midterm election season. “Tegna has a very strong footprint for this year’s mid-term elections, with both spending levels and the number of competitive races reaching new highs,” the company said in a Securities and Exchange Commission filing. “The company’s anticipated 2018 full-year political advertising revenue reflects the critical role strong local broadcast stations play in political marketing strategies,” it said. Most of the revenue will come in the next couple of months, of course. Tegna reported political ad revenue of $33.3 million in the first six months of this year. Tegna is getting more money for midterm spending than it did during the last presidential election campaign. The company reported $154.8 million in political ad revenue in 2016. Without major election campaigns, political revenue dropped to $23.3 million in 2017. Because of that, Tegna’s overall revenue fell 5 percent to $1.9 billion in 2017. Total revenue grew 8 percent in the first six months this year to $1.03 billion. The other public company that operates television stations in Jacksonville, Graham Holdings Co., does not report total revenue figures for political ad spending. Graham operates WJXT TV-4 and WCWJ TV-17.

BMO analyst downgrades CSX BMO Capital Markets analyst Fadi Chamoun has a positive outlook for CSX Corp. and other railroad companies, but he downgraded his rating on Jacksonville-based CSX last week because he is “stepping off (mildly) the accelerator.” “The fundamentals surrounding railroads’ demand, pricing, and productivity are robust, but valuation levels are above historical averages and leading demand indicators are at peak historical levels,” Chamoun said in a report on

File image

The WTLV TV-12 and WJXX TV-2 studios at 1070 E Adams St. The stations’ owner, Tegna, is expected to generate revenue up to $200 million from political advertising this year.

the industry. “While we remain fans of the rail sector and continue to believe that railroads should represent a core holding for long-term investors, tactical profit taking may be warranted, in our opinion,” he said. Chamoun downgraded CSX from “outperform” to “market perform,” but said the company is doing well in its goal of increasing efficiency. “CSX’s transformation to a precision railroading model continues to be a source of significant improvement in earnings and free cash flow,” he said. “While the benefits of precision railroading are long lasting and should position the company to be a cost and service leader in the Eastern U.S. over the long term, the company has also benefited from a strong demand cycle including growing export coal volume and robust domestic intermodal market.” The downgrade reflects “a more balanced risk/reward at current levels,” he said. Moody’s Investors Service also weighed in Monday on CSX, affirming the company’s credit rating and saying the outlook is stable. Moody’s cited the company’s position as one of two major eastern U.S. railroads “with a diversified freight mix and operating margins that are likely to continue an upward trajectory.” “The swift improvement in operating margin is largely driven by CSX’s transition to a new operating model that focuses intensely on efficiency, velocity, asset utilization and pricing, including for nonfreight services,” it said.

Web.com sets meeting date Web.com Group Inc. set Oct. 10 as the date for a special shareholders meeting to vote on a buyout by affiliates of Siris Capital Group for $28 a share. With the meeting set, it seems that investors have given up on the idea that another party will swoop in with a bid above $28. Web.com’s stock had been trading mostly above $28 since the updated agreement was announced Aug. 6, indicating

that Wall Street was expecting a higher bid. However, the stock dropped back into the $27.90s last week.

Stewart shareholders OK Fidelity deal

Shareholders of Stewart Information Services Corp. last week approved its acquisition by Jacksonville-based Fidelity National Financial Inc., but the deal is still months from completion. Fidelity announced the deal in March that would increase its share of the U.S. title insurance market from 32 percent to about 42 percent. However, regulatory agencies are expected to require divestitures of some operations that will reduce Fidelity’s market share. Because of the long regulatory process, completion of the merger may not happen until early next year. Stewart said more than 99 percent of votes cast at its special shareholders meeting approved the deal.

FIS sells check authorization business

Fidelity National Information Services Inc., or FIS, said last week it sold its Certegy Check Services business to an affiliate of Variant Equity Advisors LLC. The Tampa-based business, which provides check authorization services, is now an independently operated company. FIS said it sold the business as part of its strategy to focus on providing software-based solutions to financial institutions. Terms of the deal were not announced but Robert W. Baird analyst David Koning said in a research note the sale price was likely between $75 million and $100 million. Koning estimates the check business was producing annual revenue of $75 million to $90 million, or about 1 percent of total FIS revenue, and Certegy’s revenue was declining by about 20 percent a year.

ADT names DeVries new CEO ADT Inc. last week said

Chief Executive Officer Tim Whall is retiring Nov. 30 and will be succeeded by Jim DeVries, president of the security services company. DeVries joined ADT as chief operating officer in May 2016 and was promoted to president in September 2017. ADT went public in January for the second time in five years and its stock has performed poorly since the initial public offering. The company had hoped to sell shares at $17 to $19 but had to reduce the price to $14 when the IPO hit the market. The stock dropped on its first day of DeVries trading and has remained below the IPO price since. The stock fell again last month after reporting an unexpected second-quarter loss and has been trading below $9 recently. Boca Raton-based ADT employs about 3,000 people in Jacksonville.

Michaels falls on disappointing earnings forecast

The Michaels Companies Inc. reported second-quarter earnings slightly higher than expectations, but sales for the arts and crafts retailer were disappointing and the company projected third-quarter earnings below analysts’

forecasts. As a result, Michaels’ stock dropped to a 52-week low last week. Earnings of 15 cents a share were 4 cents lower than last year but 1 cent above the company’s forecast. Sales fell 1.8 percent to $1.05 billion, mainly due to the closing of the company’s Aaron Brothers chain with 94 stores. More significantly, comparable-store sales (sales at stores open for more than one year) fell 0.4 percent. Michaels projected thirdquarter earnings of 42 cents to 45 cents a share, lower than the average analyst’s forecast of 51 cents, according to Zacks Investment Research. Michaels’ stock, which was trading above $20 before the earnings report just before Labor Day weekend, fell to a low of $15.85 last week. In more positive news, Michaels announced last week it will hire more than 15,000 seasonal workers for the holidays across its stores and distribution centers, which include a distribution center in Jacksonville. The company employed about 49,000 at the end of its last fiscal year, according to its annual report. The company operates more than 1,200 stores in the U.S. and Canada under the Michaels and Pat Catan’s brands. MBASCH@ JAXDAILYRECORD.COM

MICHAELS 2ND QUARTER SALES

1.8%

Sales fell to $1.05 billion, mainly due to the closing of the company’s Aaron Brothers chain.


Jacksonville Daily Record/Jacksonville Record & Observer

Thursday, September 13, 2018 • Page 7

RESTAURANT NOTES

The Posting House is next for former Layla’s The landlord is dividing San Marco space that once held the Mediterranean restaurant into two units. BY KAREN BRUNE MATHIS EDITOR

San Marco is slated for an English-themed traditional neighborhood pub that serves beer and wine, pending zoning, but with limited food options. The vacant Layla’s of San Marco site near Atlantic and San Marco boulevards is proposed for remodeling into The Posting House LLC. The Posting House LLC applied to the city for zoning approvals to operate a beer and wine pub, without liquor sales, at 2018 Hendricks Ave. Layla’s was a full-service Mediterranean restaurant and hookah bar at 2016 Hendricks Ave. with a full liquor license and a seating capacity of 197. It was damaged by fire in July 2012 and closed. It reopened in 2013 as Mezze Mediterranean Grill but closed within two years. The landlord is dividing the almost 3,500-square-foot building into two units, with The Posting House taking the southern half and the northern half labeled as vacant retail space. The city is reviewing construction of a firewall to separate the tenant spaces into 2016 and 2018 Hendricks Ave. The building was developed in 1945. Joyce Kimball is listed as the property owner and Michael Saylor of Black Dog Planning Inc. is the applicant. Jude Green, a San Marco resident, is the proprietor of Posting House LLC, which was registered with the state in August. Saylor said the lease hasn’t been signed but Green would like to open in early 2019, re-energizing a building that has been vacant for several years. The zoning applications describe the English theme and said it “will offer a contrasting low-key activity to the highertraffic food and beverage venues presently operating in The Square,” as the historic shopping district is called. The Posting House said there is no provision for a full kitchen in the space. The pub will include 1,600 square feet of space with seating up to 99

Photo by Karen Brune Mathis

The vacant Layla’s of San Marco site near Atlantic and San Marco boulevards could become an English-themed pub called The Posting House.

inside and at the bar, although Saylor said it would be 50 to 99. A covered portico on the Hendricks Avenue side of the building will be used for outdoor seating. That seating is part of the leased area and not part of the sidewalk. Saylor said the building will feature a new facade to create two entrances with a shared covered portico that will provide covered open-air seating. No tenant has committed to the other half of the building, he said. The application states no amplified outdoor music is proposed, and any inside music will be limited to pre-recorded electronic music or live acoustic performances. An administrative parking deviation is requested to reduce the off-street parking requirement from 26 spots to none. The Posting House LLC application says the landlord owns and controls 20 shared parking spaces on-site and there are 12 on-street parking spaces in front of the proposed business. The Posting House LLC seeks a waiver of the minimum

n Two Dudes Seafood Restaurant operators and owners

Tom and Jennifer Corsano opened their third location in the former Il Desco space in Riverside. The 2665 Park St. location previously was a drugstore before conversion into Pele’s Wood Fire Grill in 2012 and then the Il Desco Italian restaurant in November 2015. Il Desco closed in January. It is the third Two Dudes location, with the first in Atlantic Beach and the second in Ponte Vedra Beach. n Lucky’s Market is taking shape in OakLeaf Station in Southwest Jacksonville. The city approved construction of the shell building for the 30,185-square-foot market at 8380 Merchants Way at a cost of $540,530. Target Contractors Inc. is the contractor. n Vale Food Co. is opening at 90 Riverside Ave. in Brooklyn Station on Riverside. It will lease 1,999 square feet of space next to Burrito Gallery. Vale is a Tallahassee-based healthy fastcasual restaurant that offers meal plans, catering and delivery. n V Pizza intends to open at 154 Canal Blvd. in Ponte Vedra Beach. St. Johns County issued a permit for construction of a 5,600-square-foot retail building to include V Pizza at a cost of $1.2 million. V Pizza has locations in San Marco, Mandarin, Jacksonville Beach, Fleming Island and Gainesville.

distance requirements from a church for a liquor license, an exception to sell beer and wine and the administrative deviation for parking. Saylor said the zoning requests

PEOPLE ON THE MOVE Promotions, hirings and happenings for business people in Northeast Florida. Send items to ssailer@jaxdailyrecord.com

Cindy Kaneer joined Cantrell & Morgan Inc. as senior vice president of property management. Kaneer has more than 25 years of commercial real estate experience in property and facilities management. Kaneer most recently was a commercial property manager with Meek Development Group Inc.

Hoover

Chick-fil-A plans to remodel in Regency

NOTES

Roger Hoover, Jacksonville Jumbo Shrimp Kaneer director of broadcasting and radio play-byplay announcer, was named the 2018 Southern League Radio Broadcaster of the Year. Hoover was selected by a vote of the league member clubs’ general managers and radio broadcasters. Hoover recently completed his 11th season of broadcasting minor league baseball and his seventh for Jacksonville.

might be considered in October by the Jacksonville Planning Commission. He said operating hours haven’t been decided and might be part of the exception approval.

Chick-fil-A wants to renovate its Regency area restaurant as part of a brand-image remodel. The Atlanta-based chain proposes a $680,000 project to modify the roughly 4,000-square-foot property at 9398 Atlantic Blvd., which was built in 2000. Chick-fil-A also is renovating its Tinseltown restaurant to include interior and exterior work, including a redesigned dining room, a dual-line kitchen and adding another drive-thru lane. That site, at 4461 Southside Blvd., will close this fall for four weeks for the project. A spokeswoman said in May that Chick-fil-A planned to remodel two or three Jacksonville area locations annually for the next five years as part of its long-term reinvestment strategy. KMATHIS@JAXDAILYRECORD.COM @MATHISKB (904) 356-246

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Page 8 • Thursday, September 13, 2018

Jacksonville Daily Record/Jacksonville Record & Observer

NAIOP COMMENTARY

Office condos – perfect product or destined for doom? With Northeast Florida experiencing huge growth, inventory is tight and values are increasing. BY KATIE KIRCHNER PARTNER AT STRATEGIC SITES CLIFFORD COMMERCIAL

By definition, an office condominium is an office building with two or more individually owned units. The balance of the property, such as parking lots and landscaped areas, is considered common area and is owned and shared by all of the condo owners, usually managed and maintained by a condominium association. Office condominiums are not new to Northeast Florida but after a lull in new projects, there has been a resurgence of condominium development responding to area growth, specifically in markets to the south. With projects planned or underway at Nocatee, Durbin, Greenland Road, Alumni Way and more, it is clear that the demand is there. Condominium projects provide an opportunity for small business owners to own their space, usually near their home or client base, with manageable square footage and efficient layouts. Condo projects are typically delivered one of two ways – cold dark shell (slab, plumbing stubbed, electric brought to the building and demising wall) or built to a standard floor plan (or modified based on the buyer’s requirements). Part of the appeal is that buyers have the ability to have their unique floor plan needs met or know that they are purchasing an efficient floor plan, with broad appeal. The “standard floor plan” generally consists of four to five offices, a conference room, kitchenette, ADA compliant restroom and reception in about 1,200 square feet. The ability to combine units

Special to the Daily Record

Katie Kirchner is partner at Stategic Site Clifford Commercial.

provides for future growth and expansion and possible rental income upfront. But how well do these projects hold their value? History has shown that they aren’t recession-proof, regardless of location, build-out or developer. In 2009, 2010 and 2011 Northeast Florida saw many of these projects riddled with issues. Whether it was owners in arrears with the association, units in foreclosure or massive vacancies, many of these projects were hit hard. This allowed for great opportunities for investors and resourceful buyers, but didn’t bode well for market values. Most would agree that we currently are in a strong market – values are increasing, inter-

est rates are relatively low and funds are available for business owners. However, inventory is tight. Growth and development is surging in our outlying areas but opportunities in the Riverside, San Marco, Southside, Mandarin or Beaches markets are limited for owner-users. These dense markets don’t allow for much new development so prospective buyers are at the mercy of resales. This drives the price up to where a buyer asks, “Will I get my money out when I sell it down the road?” as an owner-user and “Can I lease it for enough to achieve my desired CAP rate?” as an investor. Is this the beginning of a cycle that we should all recognize? As

values and purchase prices continue to increase, can the market sustain it? Most owners of office condominiums are small business owners, a large percentage run their business out of their unit. The investors tend to be local, not REITs, with expansive portfolios or giant corporations. The owners of office condominiums focus on this product for a variety of reasons but a common factor is that overall it is “safe” real estate, if such a thing exists. The overhead is minimal, the efficiency of the space is unmatched and as long as there are small businesses, particularly service-related, the demand will be there. Northeast Florida is experiencing huge growth. With our

variety of submarkets and trade areas, we are perfectly set up for office condominiums. Satellite offices, large pockets of residential that require services close to home, and local investors that believe in the area’s growth – these are just a few reasons that office condominium projects will continue to be successful. I look forward to watching these new projects enter the market and selling a few to my clients. KATIE KIRCHNER IS MEMBERSHIP COMMITTEE CHAIR FOR THE NAIOP COMMERCIAL REAL ESTATE DEVELOPMENT ASSOCIATION NORTHEAST FLORIDA CHAPTER

Summit at Southpoint office park sells for $29.5 million New York real estate investment firm plans to keep tenants and property management. BY JAY SCHLICHTER ASSOCIATE EDITOR

A New York City-based real estate investment and management firm purchased Summit at Southpoint, an office complex in Jacksonville, for $29.5 million Sept. 6. Rose & Berg Realty Group, based in Manhattan, acquired the property with $25 million in financing through Berkadia, which arranged a three-year loan with an extended interest only period. The seller was Bluerock Summit S LLC, a subsidiary of Bluerock Real Estate, also headquartered in Manhattan. The property, at 6410 Southpoint Parkway off Bowden Road and adjacent to Interstate 95, comprises more than 260,000

Special to the Daily Record

Summit at Southpoint at 6410 Southpoint Parkway off Bowden Road and adjacent to Interstate 95 sold Sept. 6 for $29.5 million.

square feet of office space in four three-story buildings on 23.4 acres. The complex was 82 percent occupied at the time of the sale,

with tenants including U.S. Bank/ FSV, Chicago Title Insurance Co., BB&T, Windstream, Ocenture and Keiser University. Shelby Rosenberg, a member

of the family-owned Rose & Berg firm, said the deal is the company’s first investment in North Florida. The group also has investments

in New York, New Jersey, Ohio and South Florida. Rosenberg said the firm saw the complex as an investment opportunity because of its location off I-95, the “good” tenants leasing there and the increased demand for office space in Northeast Florida. Rose & Berg plans to retain the tenants and the property management company, Foundry Commercial of Jacksonville. It will make minor upgrades and renovations as needed. “We are pretty comfortable with how the building currently shows, so we will stick with the status quo,” Rosenberg said. Summit at Southpoint was built in phases in 1988, 1991 and 1998. It was last sold in four deeds in 2017 for $3.8 million, $13.1 million, $10.4 million and $7.2 million,totaling $34.5 million. JAYS@JAXDAILYRECORD.COM (904) 356-2466


Jacksonville Daily Record/Jacksonville Record & Observer

Thursday, September 13, 2018 • Page 9

REAL ESTATE

Top 10 sales of the week BY SCOTT SAILER • EDITORIAL RESEARCH DIRECTOR

Here are the top 10 real estate sales in Northeast Florida, comprising Baker, Clay, Duval, Nassau and St. Johns counties. The sales were recorded Sept. 4-7.

Special to the Daily Record

Sunrise Apartments sold for $3.45 million, 228 percent more than its 2014 price.

$10,750,000

$3,450,000

$3,432,500

$3,250,000

$2,771,520

7557 and 7579 Arlington Expressway, Jacksonville, Duval County

1135 Bert Road, Jacksonville, Duval County

Cole Road, Jacksonville, Duval County

24744 Harbour View Drive, Ponte Vedra Beach, St. Johns County

4915 San Pablo Road S., Jacksonville, Duval County

Type: Avalon Hill Apartments and vacant commercial Size: 12.37 acres Buyer: JAX Avalon LLC Seller: Oreo Asset Holdings LLLP Previous sale: $1,309,500 in 2011

Type: Sunrise Apartments Size: 1.65 acres Buyer: Sunrise Apartments Jacksonville LLC Seller: JBCT Sunrise LLC Previous sale: $1,050,000 in 2014

Type: Vacant residential Size: 38.21 acres Buyer: Lennar Homes LLC Seller: CLDG Land I LLC Previous sale: $2,000,000 in 2018

Type: Single-family Size: 2.82 acres Buyer: Christopher L. and Alyson M. Claudio Seller: Christopher C. and Letitia Aitken Previous sale: $3,725,000 in 2007

Type: Vacant commercial Size: 15.39 acres Buyer: San Pablo RI LLC Seller: Steinemann San Pablo LLC Previous sale: $1,663,600 in 2001

$2,600,000

$2,400,000

$2,050,000

$2,000,000

$2,000,000

6 Ponte Vedra Blvd., Ponte Vedra Beach, St. Johns County

11217 San Jose Blvd., Jacksonville, Duval County

8215 Dix Ellis Trail, Jacksonville, Duval County

1237 Penman Road, Jacksonville Beach, Duval County

7282 Commonwealth Ave., Jacksonville, Duval County

Type: Single-family Size: 0.31 acres Buyer: Ryan M. and Leah R. MacClellan Seller: Christopher T. and Patricia A. Armstrong

Type: Commercial Size: 1.95 acres Buyer: Store Master Funding XIV LLC Seller: Episcopal Early Learning Centers Inc. Previous sale: $1,600,000 in 2012

Type: Denny’s Size: 0.94 acres Buyer: Alan Crane, Doris Sterling, Robyn Sterling, Mary Sorensen and MUFG Union Bank Seller: William J. and Patricia F. Mandel Previous sale: $1,800,000 in 2013

Type: Commercial Size: 1.38 acres Buyer: JBCT Sunrise LLC Seller: Penman Square LLC

Type: Go Pull-It Size: 49.08 acres Buyer: Go Pull-It LLC Seller: Mervis Industries Inc. Previous sale: $2,000,000 in 2012

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Page 10 • Thursday, September 13, 2018

Jacksonville Daily Record/Jacksonville Record & Observer

THE CAWTON REPORT

Gulliford making progress on Mayport plans

DAVID CAWTON STAFF WRITER

Tax credits sought to help bring commerical fishing, restaurants back to the area. Bill Gulliford wants to make significant progress on redeveloping Mayport Village before he leaves City Council next year. On Tuesday, Gulliford held another meeting to discuss ideas about bringing restaurants, commercial fishing and processing and an educational component back to the area. In May, Gulliford, who represents District 13, began pushing for the development after Gulliford the city acquired 6.72 acres along Ocean Street and the St. Johns River from JaxPort. Previous plans failed to redevelop the property next to the St. Johns River Ferry. Mayport Village Working Waterfront LLC was formed in April to become the master developer of the site. The group is trying to secure fed-

File image

City Council member Bill Gulliford is working to secure $2 million for construction of a new Mayport Community Center and new docks.

eral New Market Tax Credits as incentives for investors to bring projects to the area. Fredric Washington of Mount Tabor Consulting LLC is working with the group to apply for those credits. He said Wednesday the group will have a better idea of eligibility after the master plan is completed. Washington said Mayport Village Working Waterfront will hold the tax credits and offer them to outside developers who want to join the project. He said the group also is pursuing additional financing options. Gulliford is working to secure $2 million for construction of a new Mayport Community Center and $360,000 for new docks near the St. Johns River Ferry. Council is expected to approve the mayor’s 2018-19 fiscal year budget Sept. 25. Gulliford said he hopes dock construction will start within six months. In the meantime, Mayport

Village Working Waterfront is meeting with architects and planners on the master plan, which could include a commercial fish processing plant, restaurants and shopping. Jacksonville University is considering relocating its Ocearch research vessel to Mayport and partnering with the developers to create a world-class shark education center. JU is the educational partner of Ocearch, a nonprofit group that tracks and monitors marine species such as great white and tiger sharks along the East Coast and other areas. Quinton White, executive director of JU’s Marine Science Research Institute, said previously the location, about 2.2 miles from the Atlantic Ocean, would be an ideal location for the research center and Ocearch ship.

City, JEA want out of Plant Vogtle deal The city of Jacksonville

and its public utility, JEA, are suing the owners of a proposed nuclear power plant in Georgia to exit a 2008 deal to purchase power and pay for construction costs. Attorneys for the city filed a complaint in the 4th Judicial Circuit the same day co-owners of the Plant Vogtle nuclear power plant in Georgia sued JEA in federal court, alleging the utility is trying to breach the terms of the contract. According to The Florida Times-Union in August, officials with the Municipal Electric Authority in Georgia and JEA Interim CEO Aaron Zahn sparred for weeks through written correspondence about JEA potentially exiting the deal because of cost overruns and missed deadlines. Zahn wants to void the contract and is asking the plant’s owners, comprising Georgia Power, the City of Dalton, Oglethorpe Power and MEAG, to vote against continuing after $2.3 billion in new cost overruns. Zahn also wants the Sept. 24 vote pushed to October. The now $27 billion project is an expansion of the existing Plant Vogtle that includes the construction and operation of two additional reactors. In 2008, JEA agreed to a 20-year power purchase agreement that could cost ratepayers about $2.3 billion. JEA is responsible for those costs even if the reactors never come online. When it was announced, the expansion was set to cost around $9.7 billion. Since then, the United States has shifted focus from nuclear energy toward cheaper natural gas and other alternatives. Plant Vogtle is the only

active nuclear power plant under construction in the U.S. Attorneys for the city argue that the JEA board of directors did not have the authority to enter into the agreement in 2008, making the contract invalid. MEAG also has asked a federal judge in Georgia to force JEA to remain a partner in the project.

Council approves grant from UAE Jacksonville City Council members approved legislation Tuesday allowing the city to receive a $2.775 million grant from United Arab Emirates to help address damage done by Hurricane Irma a year ago. The grant will fund projects including: n $425,000 to Duval County Public Schools for an architecture career academy and computer labs at William M. Raines High School and Jean Ribault High School. n $250,000 to Builders Care and $400,000 for Habitat for Humanity of Jacksonville Inc. for the Ken Knight Drive Neighborhood Home Repair and Restoration Project. n $900,000 to I.M. Sulzbacher Center for mobile medical clinics. n $800,000 to the City of Jacksonville to restore Charles Reese Park and to improve public infrastructure on Ken Knight Drive. Projects could begin in late 2018 or early 2019. DCAWTON@ JAXDAILYRECORD.COM @DAVIDCAWTON (904) 356-2466

Annex CONTINUED FROM PAGE 1

after the city issued a notice to proceed on July 26. Contractors are performing interior demolition, starting from the top floors down in both buildings. Interior demolition on the annex building is expected to run through December, while work inside the courthouse could finish in late October or early November. Environmental Holdings Group also will perform asbestos abatement in the buildings to coincide with the completion of interior demolition. The buildings have been vacant for years. The city moved most of the legislative and executive branch departments in 1997 to the St. James Building at 117 W. Duval St., although some departments and the State Attorney’s Office occupied space in the old City Hall Annex for several more years. Courthouse operations relocated in 2012 to the new Duval County Courthouse at 501 W. Adams St. “At this time, demo of the annex is targeted for the weekend of 1/12/19 and 1/13/19,” said Mousa in an email. “But that could change.” Controlled Demolition Inc. will perform the implosion of the annex, according to company President Mark Loizeaux. “We look forward to working

Photos by Monty Zickuhr

Work is underway on the demolition of the old City Hall Annex and former Duval County Courthouse on Bay Street, with the area fenced off.

with (Environmental Holdings and the city) toward the design and felling of the structures,” he said in an email. Assuming demolition work continues as planned, Environmental Holdings will begin clearing the sites in January with the goal of completing the project in mid-March. Mousa said the properties will be graded and landscaped with grass. Curry earmarked $8 million for the project in the 2017-18 Capital Improvement Program budget. Destruction of the City Hall Annex will be the first major implosion in Downtown Jacksonville since the Jacksonville Veterans Memorial Coliseum

was imploded in June 2003. Over the summer, JEA imploded large cooling towers at its-decommissioned St. Johns River Power Park. The cleared riverfront Bay Street site will be ready for redevelopment. Curry and the Downtown Investment Authority are reviewing proposals to develop the 8.38-acre property into a convention center complex or other use. Three firms submitted formal bids in August for a new convention center, hotel and parking garage on the site, along with a 6-acre riverfront surface lot that’s being demolished between Liberty and Market

streets and Coastline Drive. The parking lot collapsed in 2015. Demolition is expected to be completed in 2019. In addition to the convention center ideas, the Rimrock Devlin DeBartolo Development group submitted an unsolicited bid to DIA to create a mixed-use development called “Riverwalk Place” on the Bay Street site. It would comprise a fivestory, 347-unit residential complex; a nine-story, 150room limited-service hotel; 10,000 square feet for multiple restaurants; and a 6½-story, 468-space parking garage. An evaluation committee met individually Tuesday with three firms that submitted official

responses to the DIA’s request for proposals to develop a convention center complex along Bay Street. The full DIA board is scheduled to meet Wednesday to review the evaluation committee’s scores and begin discussions on how to proceed, including whether the Bay Street site is the ideal location for a new convention center. Jacksonville Jaguars owner Shad Khan proposes to build a convention center in Metropolitan Park near TIAA Bank Field. DCAWTON@ JAXDAILYRECORD.COM @DAVIDCAWTON (904) 356-2466


Jacksonville Daily Record/Jacksonville Record & Observer

Plans: CONTINUED FROM PAGE 1

the site of the old Duval County Courthouse and City Hall Annex buildings. Bids were accepted Aug. 1 and scored Tuesday by an evaluation committee comprising DIA board member Oliver Barakat, Public Works Director John Pappas and DIA CEO Aundra Wallace. Wallace will present the scores to the full DIA board Wednesday. “The board will need to decide what it wants to do from there,” Wallace said after the five-hour meeting. In addition to the Bay Street plans, Jacksonville Jaguars owner Shad Khan proposes to build a convention center nearby at the Shipyards and Metropolitan Park. Khan’s development company, Iguana Investments of Florida LLC, is the master developer of the Shipyards, which is estimated to be a $2.5 billion project when completed with entertainment, office, hotel and other elements. Wallace said the DIA board, Chairman Jim Bailey and Mayor Lenny Curry are expected to choose a location for the convention center location.

Thursday, September 13, 2018 • Page 11

JACOBS ENGINEERING Jacobs Engineering Group Inc. proposes construction of a 1.8 million-square-foot complex at about $598 million. The city would then pay about $1.2 billion over a 25-year agreement.

CITY WOULD PAY $936M UNDER RIMROCK PLAN

Rimrock Devlin DeBartolo Development, a partner with Khan’s Shipyards plan, is one of three firms offering a proposal for the Bay Street site. Rimrock would pay $450 million in construction costs to build the complex. The city would provide a 75 percent Recapture Enhanced Value Grant over 20 years; convey the property to the developer for free; be responsible for any public utility work; and waive permitting and impact fees. The city would enter at least a 30-year lease with monthly payments of $2.6 million, or $31.2 million annually. Under Rimrock’s plan, the city would pay about $936 million over that time. The city would operate the convention center and parking garage, gaining all net revenue, while a hotel partner would operate its portion of the complex. Rimrock’s plan includes 200,000 square feet of multipurpose exhibition space; a 40,000-square-foot ballroom; 48 meeting and breakout rooms; a 6,000-square-foot kitchen; outdoor function space; 1,300 parking spaces; a connection to the Downtown Northbank Riverwalk and to the neighboring Hyatt; and ground-floor retail. If selected, Rimrock executive Rich Hartline said construction could begin in 2019, taking 26 months to complete.

RIMROCK Rimrock Devlin DeBartolo Development would pay $450 million to build the project. The city would enter into a 30-year lease and pay about $936 million over that time.

Photos special to the Daily Record

PRESTON HOLLOW The group said it would cost $450 million to $460 million to build the project. It would ask the city to contribute up to $229 million, essentially half, to fund the project.

SCORING THE BIDS

$1.2 BILLION PLAN FROM JACOBS ENGINEERING

The largest and most expensive proposal comes from Jacobs Engineering Group. Construction of the 1.8 millionsquare-foot complex is about $598 million, financed by Jacobs. The plan comprises two phases. The first includes working with the city on an “open book” basis to finalize the design, schedule and other preconstruction items. If officials decide to proceed, Jacobs would refund Phase 1 costs to the city and fund the rest of the project. Jacobs would operate the hotel, convention center and parking structure. Under Jacobs’ financial plan, the city has a three-year deferral from payments before it is obli-

Wallace said in a perfect world, the city would have access to that kind of capital upfront to avoid large interest payments. “Because we live in the real world, we would need to sit down and work on those numbers,” he said. “How long, what’s the interest rate, and those particular items.” Preston Hollow’s presentation lacked the design detail offered by its competitors. A 468,393-square-foot hotel and a convention center, with up to 431,000 square feet of exhibition space, is shown in the plans along with 45 breakout rooms with 60,000 square feet of space, a 40,000-square-foot grand ballroom and a 22,000-squarefoot junior ballroom. The proposed hotel would be built above the convention center, rising nine stories for a 190foot tower. It includes 400 rooms, a rooftop pool, three restaurants and other amenities. A six-level parking garage would offer 1,837 spaces. Interstate Hotel and Resorts will operate the hotel, although no flag is identified.

gated to come up with monthly rent. The city would be responsible for repaying the construction costs, plus capitalized interest from the three years of deferred payments, in the form of monthly rent payments of $4 million over 25 years. That’s about $48 million annually and $1.2 billion during the life

of the agreement. Jacobs is partnering with Westmont Hospitality, which operates the Hyatt Regency Jacksonville Riverfront hotel, next to the site. PRESTON HOLLOW ASKS CITY FOR HALF

The last firm to present plans Tuesday was Preston Hollow of Dallas.

While the group was clear about the $450 million to $460 million cost to build the project, details about the city’s contribution were not. Preston Hollow wants the city to contribute up to $229 million, essentially half, to fund the project. The payment would either be upfront or through a payment agreement with additional interest.

The three-member evaluation committee will base its scores on each firm’s financial plans, design work and its operating plans. Wallace will present those scores, listed from highest to lowest, Wednesday during the DIA’s monthly meeting. “This isn’t a decision the board needs to make alone,” said Wallace, who will leaves DIA on Sept. 30. He takes over Oct. 1 as president of the JAXUSA Partnership economic-development division of the JAX Chamber. “After Sept. 19, the board will have a path forward and that’s what was most important for me,” Wallace said. The DIA meets at 2 p.m. Wednesday at City Hall.

DCAWTON@ JAXDAILYRECORD.COM @DAVIDCAWTON (904) 356-2466


THE DATA PAGE

Page 12 • Thursday, September 13, 2018

Jacksonville Daily Record/Jacksonville Record & Observer

Area Office vacancy percentage 38.4%

Arlington Downtown Northbank

19.7%

Southside

19.7%

Southpoint

15.7%

Baymeadows

13%

Deerwood Park

9.4%

Mandarin

8.6%

Westside

6.1%

East Butler

5.8%

Downtown Southbank South I-95 corridor

Office vacancy: Arlington has most, Northside the least BY SCOTT SAILER • EDITORIAL RESEARCH DIRECTOR

In the second quarter of 2018, 38.4 percent of the office space in Arlington was vacant, according to the CBRE real estate services company. The Northside had no vacancy, but accounts for less than 1 percent of the total office space in the city. Deerwood Park commands the highest lease rates, with the Northside the lowest.

4.5% 2.3%

Jacksonville office market, second quarter 2018 Total Q2 2018 Total inventory vacancy net absorption Market (square foot) percent (square feet)

Q2 2018 date net Under absorption construction (square feet) (square feet)

Arlington

984,122

38.4% —

13,094 —

$12.67

Downtown Northbank

5,249,233

19.7%

21,655

27,585 —

$20.71

Southside

1,695,694 19.7% 28,669

36,198 —

$14.23

Southpoint

30,70,137 15.7% 19,013

45,282 —

$20.56

Baymeadows

3,457,008 13% 11,123

21,471 —

$19.75

Deerwood Park

3,474,588

75,194 160,000 $22.95

Mandarin

544,543 8.6% 1,796

8,598 —

$17.39

Westside

367,096 6.1% 1,326

5,366 —

$21.34

East Butler

230,876

5.8%

8,000

1,913 —

$13.95

Downtown Southbank

2,162,040

4.5%

—

3,460 —

$22.06

South I-95 Corridor

110,0183

2.3%

15,426

8,299 50,010 $22

Northside

95,600 0% —

9.4%

41,637

14,100 —

Average asking lease rate per square foot

$12

DEVELOPMENT TODAY

Source: CBRE Marketview, Jacksonville Office Q2 2018

These are the largest commercial building permits by job cost issued Tuesday by the city of Jacksonville. APARTMENTS Valencia Way Apartments, 1214 Labelle St. , contractor is NEI General Contracting Inc., four permits for building renovation, $2.2 million. OFFICE, BANK, PROFESSIONAL Pet Paradise Resort and Day Spa, 1551 Atlantic Blvd., No. 200, contractor is Tenant Contractors Inc., 7,424 square feet, tenant buildout, $765,542. GE Capital, 12854 Kenan Drive, contractor is Tenant Contractors Inc., renovation, $400,836. RESTAURANTS Waffle House Inc., 2688 Firestone Road, contractor is the owner, 1,726 square feet, new building, $400,000. Wingstop, 4375 Southside Blvd., No. 12, contractor is Adkins Construction Co. Inc., 1,345 square feet, tenant build-out, $65,000. ROOFING City of Jacksonville, 1096 McDuff Ave. N., contractor is McCurdy-

Walden Inc., roof replacement, $66,812. City of Jacksonville, 14700 Yonge Drive, contractor is Centimark Corp., roof replacement, $38,690. Jewish Community Alliance, 8505 San Jose Blvd., contractor is Stonebridge Construction Services LLC, roof repair, $20,000. SCHOOL. LIBRARY, OTHER EDUCATIONAL San Jose Episcopal Day School, 7423 San Jose Blvd., contractor is Hurley Construction Inc., install shade structure and playground equipment, $29,000. SIGNS Brooks, 3599 University Blvd. S., contractor is Don Bell Signs LLC, wall sign, $30,000. STORES, MERCANTILE Planet Fitness, 14444 Beach Blvd., No. 51, contractor is Skyline Construction Inc., 19,000 square feet, renovation, $229,070. Compiled by Scott Sailer

BUSINESS IN BRIEF $6 million gift for JU: Jacksonville University announced Wednesday it received a $6 million unrestricted gift from The Carl S. Swisher Foundation. “An unrestricted gift of this magnitude is a rare opportunity to move our University forward, accelerate our momentum, and fuel our progress,” JU President Tim Cost said. The late Carl Swisher is among JU’s first major donors. The Carl S. Swisher Library and Historic Swisher Gymnasium are named in his honor. JU recently completed the largest fundraising campaign in its history, raising more than $121.4 million from 14,000 supporters. New YMCA for St. Johns: First Coast YMCA plans to open a facility next summer in St. Johns County. It will be at Flagler Health Village in Murabella near World Golf Village. The YMCA is part of Flagler Hospital’s development to provide one-stop access to medical services, health and well-being resources, education and fitness. New Montoya partnership: Jacksonville-based wealth management company Montoya & Associates formed a partnership with Tampa-based insurance broker and risk management firm Baldwin Krystyn Sherman Partners.

Special to the Daily Record

Auld & White Constructors of Jacksonville built the Community First branch.

Montoya & Associates will continue to operate under its name in conjunction with Kestra Investment Services and Kestra Advisory Services. Community First Credit Union opens in Oakleaf: Community First Credit Union is open at 9690 Applecross Road in Oakleaf Town Center. The 3,300-square-foot financial center is the credit union’s 19th branch. Gresham name change: Nashville, Tennessee-based architectural, engineering and design firm Gresham, Smith and Partners is now Gresham Smith. The Jacksonville office of the firm is Downtown at 225 Water St. Compiled by Scott Sailer


Jacksonville Daily Record/Jacksonville Record & Observer

Thursday, September 13, 2018 • Page 13

LEGAL COMMUNITY

Daniel Webster Perkins, 1879-1972

ABOUT D.W. PERKINS

Photo by Max Marbut

D.W. Perkins Bar Association President Gregory Redmon, left, and Zachary Faison, the new president and CEO of Edward Waters College.

Edward Waters president joins as D.W. Perkins launches its year Group working on community remembrance project that could be shown to potential jurors at courthouse. BY MAX MARBUT ASSOCIATE EDITOR

At the first D.W. Perkins Bar Association business meeting of the 2018-19 membership year, Zachary Faison, the new president and CEO of Edward Waters College, arrived as a guest and left as a member. Faison has been in Jacksonville only 45 days and is getting to know the area and its leaders. “It’s good to be among lawyers,” said Faison, an attorney who is the former

general counsel and vice president of external affairs at Tuskegee University. One of his goals for EWC’s curriculum is to develop a prelaw program. “We have a long and proud history of producing law enforcement professionals. We want to help produce top-notch attorneys. We feel there’s a niche and a need in the community,” Faison said. D.W. Perkins also has a slate of events and programs planned for the community and legal profession. President Gregory Redmon said the association is working with local historians on a community remembrance project to identify progress made since the years between Reconstruction and World War II, when Duval County was the site of seven lynchings. The project includes working with Duval County Judge Pauline Drake to

develop educational presentations for students and adults and possibly a video that could be shown to potential jurors at the Duval County Courthouse, Redmon said. Plans for the next calendar year are underway as well. Redmon said the Perkins Bar and the Jacksonville Women Lawyers Association will join forces in January for a community service project yet to be determined. Michelle Suskauer, president of The Florida Bar, will be invited to attend the Perkins Bar’s March meeting during Women’s History Month. When the association meets Oct. 4, a panel discussion of the judicial nominating process is on the schedule. MMARBUT@JAXDAILYRECORD.COM (904) 356-2466

The D.W. Perkins Bar Association is named in honor of Daniel Webster Perkins, one of Florida’s first African-American lawyers. Born on Jan. 9, 1879, in Elizabeth City, North Carolina, Perkins received degrees from North Carolina State Normal College in 1897, Temple University in 1899 and Shaw University Law School in 1902. After practicing law in Knoxville, Tennessee, and Tampa, he settled in Jacksonville in 1919, where he practiced until his death in 1972. Perkins distinguished himself as a proponent of civil rights, a community leader and a member of the Bar who was interested in the careers of his younger black colleagues. In 1968, the former Colored Lawyers Association in Jacksonville changed its name in honor of D.W. Perkins, a founding member. Source: D.W. Perkins Bar Association

Florida Coastal School of Law appeal denied by ABA

The American Bar Association denied Florida Coastal School of Law’s appeal after the school was found not in compliance with the ABA’s accreditation standards. Those findings were published in October and confirmed in March by the ABA Accreditation Committee. Florida Coastal Dean Scott DeVito appeared before the ABA Council of the Section of Legal Education and Admissions to the Bar, which denied the appeal, at its Aug. 2 meeting. With the denial, Florida Coastal is required to develop a written reliable plan for bringing the school into compliance with the standards; publish the

JALA Equal Justice Awards Sept. 20 A few tickets remain for Jacksonville Area Legal Aid’s 19th annual Robert J. Beckham Equal Justice Awards Celebration Sept. 20 at the Omni Hotel.

Holland & Knight partner George “Buddy” Schulz is this year’s honoree. He’s chair of the firm’s Public and Charitable Service Department, which coordinates the pro bono and community programs that provide assistance to people of limited means and organizations that help them. In addition to his work at the law firm, Schulz has served as a cabinet member of United Way; general counsel of PACE Center for Girls in Jacksonville; a director of Jacksonville Area Legal Aid and the Jacksonville Urban League; a member of the city Ethics Commission and Juvenile Justice Comprehensive Strategy Board; and a member of the Gator Bowl Association. He also is a volunteer to the Guardian ad Litem program, a trustee emeritus of the University of Florida Levin College of Law and a member of Florida Blue Key. Keynote speaker is Piper Kermon, author of the prison memoir “Orange is the New Black: My Year in a Women’s Prison” that was adapted into the Emmy Award-winning original series on Netflix. She has been called as a

witness by the U.S. Senate Judiciary Subcommittee on the Constitution, Civil Rights and Human Rights to testify on solitary confinement and women prisoners, and by the U.S. Senate Governmental Affairs and Homeland Security Committee to testify about the federal Bureau of Prisons. The awards event begins with cocktails at 5:30 p.m. followed by dinner and the ceremony at 6:30 p.m. Visit jaxlegalaid.org/equaljustice-awards-register/ for ticket information.

Young lawyers hosting breakfast with judges The Jacksonville Bar Association Young Lawyers Section’s judicial breakfast is 8:30 a.m. Sept. 19 at the Duval County Courthouse. Attorneys are invited to meet in the chief judge’s chambers on the seventh floor for a complimentary informal breakfast and conversation with Duval County judges. Visit jaxbar.org to register.

Hall Booth Smith gets building permit The city issued a building permit to Duckworth Construction Co. to build-out office space on the fourth floor at 200 W. Forsyth St. for the Hall Booth Smith law firm. The cost is listed at $131,611.70 for the 8,170square-foot project. Office managing partner Brent Allen said the firm is expanding its Jacksonville operation and will maintain its space on the 11th floor of the BB&T building.

Carr, Allison, Oliver & Sisson issued certificate of use

Birmingham, Alabamabased law firm Carr, Allison, Oliver & Sisson applied to the city for a certificate of use for its new Jacksonville office at 208 N. Laura St. The firm is moving into 4,416 square feet of space on the 11th floor.

MMARBUT@ AXDAILYRECORD.COM (904) 356-2466

THE MARBUT REPORT

MAX MARBUT ASSOCIATE EDITOR

letter from the ABA Council on the school’s website; and within 30 days of semester grades being complete and distributed provide students with information relating to Bar exam pass rates by quartiles and attrition rates. Florida Coastal sued the ABA in May, alleging that the ABA denied the school due process in the accreditation standards review. The U.S. District Court denied Florida Coastal a temporary restraining order in July, stating that such action was inappropriate while the appeal was pending. After being notified of the denial by the ABA, DeVito said, “Our only comment is that we disagree with the decision of the Council and are reviewing our next steps with our attorneys.”


IN THE LAW

Page 14 • Thursday, September 13, 2018

Jacksonville Daily Record/Jacksonville Record & Observer

BILL GRAESSLE

BILL GRAESSLE President, William S. Graessle PA

BY MAX MARBUT • ASSOCIATE EDITOR

Bill Graessle is chair of the Jacksonville Bar Association Appellate Law Committee and board certified by The Florida Bar as an appellate specialist. Who or what inspired you to become a lawyer? My grandfather, both parents, two uncles and an aunt were attorneys. From an early age I was ready to speak up and defend my position or defend someone who I believed was being treated unfairly. Being an attorney was unavoidable for me.

Age: I have my Medicare card Education: Stetson University, bachelor’s; University of Florida Levin College of Law, J.D. Hometown: Jacksonville Family: Wife, Joann; sons, Jonathan and James; and daughter, Taylor Ray

How do you relate your undergraduate degree to your practice of law? I studied political science and perceive that an understanding of how our government is structured and functions and particularly the role of the judiciary was an important basis for pursuing a legal career. The law was a natural fit for me and a good background for my practice of law.

One person other than my spouse who inspires me: Jimmy Carter

How did you decide your practice area? And why have you chosen that? My first job after law school was as a law clerk to Justice Ray Ehrlich of the Supreme Court of Florida. I was absorbed by the work itself and got to experience written and oral advocacy at its finest. It was a logical step for me when entering private practice.

Favorite book: “Anna Kingsley” by Dr. Daniel Schafer (one of many)

What has been the biggest change in your practice area since you passed the Bar? The recognition that appellate practice and trial practice are really different areas of specialization.

most economically efficient social policy and I would like to be able to have that understood by our lawmakers.

If I could change anything in the legal system, I would: Wave the magic wand and eliminate the serious problem of access to the legal system by those who are not economically prosperous. Government funding for civil legal services for those who cannot afford an attorney is the best and

What community service have you pursued and why that? I have spent considerable time doing pro bono work for the Guardian ad Litem program, served on The Florida Bar Foundation Legal Assistance for the Poor Committee and the board, and always handle pro bono cases, both for Jacksonville

Special to the Daily Record

Area Legal Aid and in my own practice. I am currently on the board of Southern Legal Counsel, a nonprofit public interest law firm that specializes in impact litigation. What’s your advice for new lawyers? Breathe. Do your homework. Keep your word. Get involved in something that helps make life easier for someone who needs help. Be proud to be an attorney who has the ability to help people.

Book I’m reading now: “Zephaniah Kingsley” by Dr. Daniel Schafer Website I can’t live without: Words with Friends Favorite nonwork activities: What is that?

BE THE FIRST TO KNOW:

Jay Schlichter

RESIDENTIAL REAL ESTATE, ASSOCIATE EDITOR

Hometown: Cheyenne, Wyoming Currently living: Fruit Cove, FL Daily Record employee: Two months Alma mater: University of Florida What you do when you are not working? I enjoy thinking about developing and building inventions that could help people Business is non-tangible but affects everyone’s lives, and usually every day. It is a living, breathing thing that keeps food on a family’s dinner table, cars commuting back and forth along interstate highways and widgets being developed, improved and shipped to buyers throughout the globe. My goal is to show its importance by covering how it touches and impacts the

in their daily lives. I’ve come up with several ideas but haven’t created the prototypes yet. Connect: jays@jaxdailyrecord.com

Northeast Florida region. Jay Schlichter

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Jacksonville Daily Record/Jacksonville Record & Observer

Thursday, September 13, 2018 • Page 15

JWLA reception launches law year SPECIAL TO THE DAILY RECORD

T

he Jacksonville Women Lawyers Association kicked off its 2018-19 membership year Sept. 6 with the annual Opening Reception at River City Brewing Company. More than 90 members and guests networked, socialized and heard about JWLA’s plans for the upcoming membership year.

Photos by Max Marbut

Spohrer Dodd partner Steve Browning’s new office has a view of Downtown’s Northbank commercial district, including the federal and county courthouses.

Spohrer Dodd moves into SunTrust Tower offices

Photos special to the Daily Record

From left, Leon Jackson, Duval County Judge Eleni Derke, Denise Davis and JWLA President Jamie Karpman.

“It’s invigorating. We’re now in the heart of Downtown and convenient to everything,” says Bob Spohrer, president, CEO and senior partner of the firm. BY MAX MARBUT From left, D.W. Perkins President Gregory Redmon, St. Johns Association of Women Lawyers President Colby Keefe and JWLA Director of Programs Ingrid Suarez Osborn.

ASSOCIATE EDITOR

After more than 15 years at the Elkins Construction building at 701 W. Adams St., the Spohrer Dodd law firm is in its new offices in the SunTrust Tower at 76 S. Laura St. “It’s invigorating. We’re now in the heart of Downtown and convenient to everything,” said Bob Spohrer, president, CEO and senior partner of the firm. Eight attorneys and 12 staff members made the move to the west half of the building’s 17th floor. The firm practices personal injury trial law in state and federal courts and has board certified civil trial and aviation law specialists. The new office is slightly smaller than the previous office, partially because so much of the

Spohrer Dodd President and CEO Bob Spohrer has a view of the Southbank and St. Johns River from his new office.

data attorneys must maintain is now digital, said partner Steve Browning. “We downsized in square feet. It was really more right-sizing. We were able to get rid of about half of the file cabinets we had,” he said. Being in an office tower at Independent Drive and Laura Street offers a different environ-

ment than working in a two-story building in LaVilla. “We really enjoy the view,” said Spohrer. “And we don’t have to get in the car and drive to lunch.” MMARBUT@ JAXDAILYRECORD.COM (904) 356-2466

From left, Florida Association of Women Lawyers President and JWLA immediate past president Jennifer Shoaf Richardson, Lindsay Tygart and Janeen Kirch, both of Coker Law.

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YOU SHOULD KNOW

Page 16 • Thursday, September 13, 2018

Jacksonville Daily Record/Jacksonville Record & Observer

ALAN BLISS BY KAREN BRUNE MATHIS • EDITOR

Alan Bliss is executive director of the Jacksonville Historical Society, based Downtown in the Old St. Luke’s Hospital, built in 1878. A University of North Florida history professor, Bliss took the historical society position Aug. 28 after serving as interim executive director since Jan. 2. He joined its board in 2015. With the society a full-time job, he and UNF are looking at options for him to teach a public history seminar. We are the custodians of the public memory, the institutional memory and many of the private memories and artifacts of Jacksonville’s history. We have tens of thousands of historic photographs. We have letters, manuscripts, documents, minute books, records of organizations, things that are often difficult to preserve in individual collections and that even if they are saved, they’re not accessible to researchers.

ABOUT BLISS Title: Executive director Organization: Jacksonville Historical Society

When things like that are placed with the historical society, our covenant is that we make it widely available and identifiable so that people anywhere in the world can locate information about some aspect of their interest that relates to Jacksonville. It was the University of North Florida that brought me to Jacksonville to teach there for the first time in 2006. Jacksonville has lots of things that appeal to me. It has the river. It’s a seaport town. It’s a Navy town. It has the beach. It has a music scene. It has a symphony. It has a diverse community, surprisingly diverse. It has terrible urban problems but so does every city, and that’s part of what interests me. All of us who are citizens of a great city are intrigued by its problems and helping solve those problems and make it a better city is part of what animates us. It’s certainly part of what interests me and challenges me. I love boating and I have always been an enthusiastic boater. Not much of a fisherman. I like seafood, but to me, fishing is just a good excuse for a boat ride. I keep a small boat at my condo and use it on the St.

Age: 66

Special to the Daily Record

Johns River, on the Intracoastal Waterway and on the tributary waters around here. I relish that every chance I get. Jacksonville has an extraordinarily diverse network of waterways. Part of the Jacksonville Historical Society’s vision is to have a historic exhibition space in the recently created National Register Historic District in Downtown. That would strengthen Downtown, strengthen Jacksonville’s broad identity and strengthen its heritage tourism history. Jacksonville deserves that in a way that is faithful to its history but that reflects its ambitions as a city. We have custody of four historic buildings. Two of them we own, two of them we occupy under long-term agreements with the city of Jacksonville. The Old St. Andrews Church and the Merrill House are city-owned. The Old St. Andrews church is where we have public

events. The Old St. Luke’s Hospital – the first building in Florida built specifically to be a hospital – houses our executive offices and our archives. The other building – the Florida Casket Company Building – is not yet fully active. We acquired it and the hospital in 2012 and we have been trying to digest that acquisition since then. One of the historical society’s initiatives is an oral history program called Speaking of Jacksonville. We try to capture the oral history interviews of people whose lives reflect the Jacksonville experience. The rule that I try to keep in mind is that the best time to get someone’s oral history interview is as soon as you think of it.

Education: University of Florida – Bachelor of Arts, Master of Arts and Ph.D., all in history Hometown: Mentor, Ohio Hobbies: Boating Website: jaxhistory.org

KMATHIS@JAXDAILYRECORD.COM @MATHISKB (904) 356-2466

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