DIA committee recommends Spandrel for The Ford on Bay
Posted by Carlos Renteria on
A Downtown Investment Authority board committee unanimously recommended a $136 million bid by New York-based Spandrel Development Partners LLC to redevelop the former Duval County Courthouse and City Hall site Downtown.
The committee vote Feb. 11 advances the proposal for the city-owned property branded The Ford on Bay to the full DIA board.
If approved, Spandrel’s six-story, mixed-use proposal, with 520 apartments and up to 74,000 square feet of retail space, would be built in two phases on the vacant 5.28-acre green space at 220 and 330 E. Bay St.
“It’s a really unique position in Downtown and serves as a real point of connectivity between the Shipyards, the Elbow entertainment district and the civic core, as well as the riverfront,” said Ben Scharf, Spandrel acquisitions and development associate. “That’s what really attracted us to this site.”
Spandrel’s proposal was chosen over an $80 million project from Miami-based The Related Group, which envisioned a 350-unit multifamily residential development with 10,000 square feet of retail space.
The DIA board could vote to accept or reject the committee’s recommendation at its Feb. 19 meeting.
Includes restaurant, retail
Scharf told the committee 40,000 square feet of retail uses would come online in Phase I, anchored by a 10,000-square-foot riverfront restaurant.
DIA board member Carol Worsham, who sits on the committee, said the riverfront restaurant fills what she sees as a gap in the Downtown Northbank.
“I think (a restaurant), along with residential, could spur other development along the Riverwalk,” she said.
A proposed grocery store would be held until Phase II when the project has residential density, Scharf said.
In an interview after the meeting, Scharf said a typical urban grocer needs 15,000 to 25,000 square feet of space, but Spandrel would examine the market feasibility before committing to a size or announcing an operator.
“We’ve spoken with local brokers, but I think it’s premature at this point to comment further on specific tenant interest,” Scharf said.
He told the committee if a grocer does not work for the development, Spandrel could consider a food hall, gallery exhibition space or meeting space for guests at the neighboring Hyatt Regency Jacksonville Riverfront hotel.
“I think it will be service-oriented retail and experiential retail,” he said. “Whether it be restaurant-bar space, a boutique fitness concept, that sort of thing brings people in and creates a destination.”
DIA CEO Lori Boyer said Spandrel’s proposal budgets $5 million for expansion of the Downtown Riverwalk while the Related Group offered $2 million.
Both proposals rely on a city Recaptured Enhanced Value Grant, which would provide a 50% tax refund for 20 years on the increased value of the property.
City Council member Reggie Gaffney, who represents District 7 that includes The Ford on Bay, called the site “the best location” for growth Downtown. He told the committee not to base its decision on the ability to commit to financial incentives.
“What I don’t want you to do is limit this to what dollars you think you have,” he said. “Allow us to have the problem if you need more dollars.”
Spandrel’s bid for The Ford on Bay did not include the 3.1-acre water parcel that the DIA wants for use as a marina.
Boyer said selecting Spandrel would not kill a marina concept. She said the city has been awarded a design grant from the Florida Inland Navigation District for a marina that has not been allocated.
The DIA CEO is prepared to begin talks with an adjacent landowner interested in developing a public marina, and she told the committee she will help it coordinate with Spandrel if the company is awarded the project.
CBRE Jacksonville, the real estate firm that marketed The Ford on Bay, says it marketed the site to 15,000 development companies nationwide.
Senior Vice President Cliff Taylor and Vice President Joe Ayers told the committee that developers considering the property for high-rise and midrise uses dropped out of consideration after analyzing the market. A “garden product” is lower than midrise.
“We candidly thought there would be groups from all three of those categories who would look at the site and make an attempt to make them work because of the desirability of the location on the river and where they are positioned in the core,” Taylor said.
Spandrel and The Related Group submitted the only bids.
Spandrel’s total project cost is estimated at $262,000 per unit, according to CBRE. The real estate firm’s initial estimate for a garden product at The Ford on Bay site was $225,000 per unit.
Taylor told the committee that’s because of construction materials. Spandrel will build the first two floors with concrete for resilience from a St. Johns River storm surge as well as to enhance the look of the ground-floor retail.
Taylor said the added cost could justify the city giving the land to the developer at no cost, which is what Spandrel has proposed.
The Related Group offered $500,000 for all three parcels.
The price of the land will be part of a development agreement for The Ford on Bay, should the full DIA board award Spandrel the project.
The agreement would have to be approved by the DIA and Council before Spandrel could break ground.
The development agreement also would take into account a right of first refusal held by the Hyatt on the 220 E. Bay St. parcel.
City Deputy General Counsel John Sawyer said the agreement would include only 330 E. Bay St. until the city can reach a deal with Hyatt owners.
By: Mike Mendenhall