Around the State- Northeast- June 2000
Jacksonville hopes plan for luxury downtown apartments will create a domino effect.
By Jane Tanner
An Atlanta real estate firm is building Jacksonville's first significant high-rise housing downtown since the Depression -- the first domino in what economic developers hope will be a large-scale effort to make downtown a center for more than 9-to-5 work activity.
Harbor Cos. is planning twin-tower luxury apartments, townhouses and a marina where a jail, a juvenile detention center and parking lots once stood along the St. Johns River. The development, called Berkman Plaza, marks a homecoming of sorts for Harbor's president, Alan Travis, who grew up in Jacksonville, and Chairman David Berkman, who lives part of the year in nearby Amelia Island.
Responding to the city's request for bids for luxury downtown housing, the two say they believe Jacksonville's growth and a largely undeveloped riverfront present a good opportunity. "You've got to be there before the next guy," Travis says.
Getting Travis and Berkman there before the next guy took some pot-sweetening from the city. Initially, the numbers for the project didn't work, Travis knew, because Jacksonville residents wouldn't pay the rents that his company could collect in similar apartment towers in Atlanta or Cobb County, Ga. One-bedrooms in Cobb, for instance, will start at $1,130, while the most Travis reckons he can get in Jacksonville for the same apartment is $850.
The city responded by chipping in $9.36 million in public incentives. For both the first and second towers, Harbor Cos. gets free riverfront property valued at $3.2 million, $2.3 million for infrastructure work and another $1.5 million for construction. The package also included tax rebates of up to $2.36 million.
Even with the incentives, though, Harbor doesn't expect to make more from its investments here than it does in Atlanta, where it did not get any public money. In fact, the company is building the Jacksonville project in two phases to make sure the first tower attracts residents before the second is built.
The city's reliance on public incentives is controversial, but officials defend the generous handouts as the best way to get downtown revved up.
Travis has developed real estate all over Florida with several other companies. He joined Harbor three years ago to broaden its reach into north Florida.
Berkman, an Atlanta native in his late 60s, prefers to stay in the background and isn't involved in day-to-day operations anymore. He started his real estate career at 18, when he bought a duplex with a $2,000 loan and then went on to amass wealth by buying, selling and building apartments. His company now has about 40,000 apartment units in its portfolio.
Berkman prefers to spend his time nowadays focusing on sports ventures. He brought two minor league sports franchises to Jacksonville: the Lizard Kings ice hockey team and an indoor football league team. He owns two other minor league ice hockey teams, one in Pensacola, the other in Birmingham, Ala. He is former owner of the Atlanta Knights minor league hockey team and tried twice without success for a NHL franchise: Ted Turner outbid him for Atlanta's NHL team, and he also made an unsuccessful run at the Tampa Bay Lightning.
In the News
Baker County -- The county is putting infrastructure in a second industrial park, Enterprise West, and soliciting companies to move in. Enterprise West is 135 acres with water and sewer facilities. A companion 80-acre industrial park, Enterprise East, has a rail connection.
Jacksonville -- Public incentives for businesses continue to spark controversy. The City Council auditor ruled this spring that officials inappropriately used a back door, the Jacksonville Transportation Authority, to dispense $9 million over 10 years for an office tower parking lot. The taxpayer funds were intended to keep retailer Stein Mart from moving its corporate offices out of downtown. Instead, the incentives now must be vetted in a public process.
Downtown Investment Group sold a 27,000-sq.-ft. downtown building to Epik Communications, the digital transmission subsidiary of Florida East Coast Industries. Orlando-based Epik plans to use the former Marine Bank building as a linking point for data moving into the state. Such equipment-laden and fiber-optic-linked edifices are increasingly common. Many carriers, such as AT&T and Qwest, enter Florida through Jacksonville.
Daytona Beach area travelers increasingly fly out of Jacksonville. The number of Volusia County area residents using the Jacksonville International Airport jumped from 2% to 12% just since 1998, according to a recent study commissioned by Daytona airport officials. About 17 airlines use JIA, compared with two at Daytona. Cheaper air fares have been cited as a reason travelers go to Jacksonville.
Citrus Bank is planning to add five branches to the one it now has in Jacksonville. Citrus, part of Greenville, S.C.-based Carolina First Corp., recruited many former Barnett Bank executives to fuel its growth in Florida, where it has 10 branches.
Hotel investments at the beaches are on the rise. The Sea Turtle Inn has undergone $6.5 million in renovations. Meanwhile, construction begins this summer on a Best Western Inn Oceanfront in the heart of the redevelopment area of Jacksonville Beach.
Millennium Specialty Chemicals, which converts paper industry waste products into fragrances for products such as detergents and soaps, plans to generate its own power. The company signed a co-generation agreement with White Plains, N.Y.-based Trigen-Cinergy Solutions for a gas-fired electric-generating plant at its site. Millennium Specialty says it can save $300,000 to $500,000 a year on electricity, depending on natural gas prices.
Marion County -- Developers of the giant On Top of the World residential community, which has 39,000 homes on 12,955 acres, want to modify their plans to shift homes to the eastern part of the property, closer to Ocala. Colen & Associates says western lands then could be set aside for environmental preservation. Ocala officials worry the retirement homes would be too close to the city airport. Right now there is no commercial air service, but officials hope to revive the Ocala airport. Traffic shifts are also a concern. County and state officials must approve the plans.
Putnam County -- Lifepoint Hospitals, a 1999 spinoff of Columbia/HCA, plans to take over Putnam Community Medical Center. Tennessee-based Lifepoint operates about two dozen small, rural hospitals. The 141-bed Putnam facility will be its third-largest. The only other Florida hospital is in Bartow in Polk County.
St. Augustine -- Orange Park developer The Vintage Group is building homes for The Neighborhoods of World Golf Village, including a community near the Jack Nicklaus- and Arnold Palmer-designed course under construction.
Winn-Dixie Denies Sale Rumors
JACKSONVILLE -- Massive changes at Winn-Dixie Stores (NYSE-WIN) could foreshadow a sale of the 75-year-old family-controlled grocery retailer, industry followers say. The chain is undergoing massive cuts and restructuring. Three division offices -- in Tampa, Atlanta and Louisville, Ky. -- will be closed along with 114 of 1,188 stores. A Tampa warehouse and two small plants also will be shuttered. All told, 11,000 jobs, or 19% of the company's workforce, will be cut to save $400 million a year.
New President and CEO Allen Rowland came on board last November. In his last stint, he prepared Utah-based supermarket chain Smith's Food & Drug to be bought out. Winn-Dixie officials continue to say they're not poised to sell the company, which has repeatedly refused to talk to the media.