Jacksonville Market Remains Steady

More Opportunities Emerging for This Northeast Florida Region

By Debra Wood

With projects downtown and at the beaches, Jacksonville-area construction continues at a steady pace, but contractors are concerned about material and labor shortages.

"Things are rocking along," said Dan Haskell, president of Florida First Coast Chapter of Associated Builders and Contractors. "Everyone thinks business will continue to be good. I don't think anybody has projected any downturns."

In fact, plenty of local and regional work exists. Plus, Haskell said many Jacksonville-area contractors are working out of town on hurricane repair and other projects.

Gordon Steadman, director of development for Elkins Constructors of Jacksonville, said demand for a variety of projects has created the largest backlog of work in the company's 50-year history.

"We have a healthy balance in Northeast Florida in every market segment we are involved in," he added. "That looks great. The only challenge is not knowing what the cost of labor and materials in the marketplace will do to several projects."

Steadman expressed concern that if prices continue rising, developers will place projects on hold or scrap them because the jobs will cease making financial sense.

"This is something the whole United States is going to be facing," he said. "We have already felt some of the impact of it."

Downtown

As with other Southeastern cities, Jacksonville is experiencing a downtown resurgence. The city has $359 million in new development under construction, plus $165 million in road and streetscape improvements, according to Downtown Vision, downtown Jacksonville's business improvement and advocacy organization. In addition, developers have proposed $2.3 billion in projects. The work includes office, lodging and residential construction.

The Auchter Co. of Jacksonville is finishing the seven-story Fidelity National Financial headquarters office building and starting to go vertical on a 13-story, $28 million office building on the Fidelity campus for Riverside Avenue Partners of Jacksonville.

The Haskell Co. of Jacksonville recently completed a parking garage at Fidelity's campus and it is beginning to build a three-story, 33-unit guest lodge for the company.

Orlando developer Kuhn Development announced plans to break ground by yearend on a $250 million, 33-story residential and hotel tower at River Watch at City Centre. River Watch will include renovation of the adjacent former SunTrust building into class-A office condominiums. The company also purchased the former Barnett Bank building and will convert the structure into mixed residential and business space.

Owner Cameron Kuhn said Jacksonville's downtown resurgence was a factor in his firm entering the market. He said the volume of projects that have been announced or are under way has reached the critical mass necessary for successful redevelopment.

LandMar Group of Jacksonville has acquired the 44-acre Shipyards property but has not started improvements. Prior developer TriLegacy Group of Jacksonville completed site preparation, infrastructure improvements and soil remediation, using funds from city-issued bonds.

In 2004, the city and TriLegacy disagreed about how TriLegacy spent city incentives, and the mixed-use project was placed on hold while the city negotiated with the two developers. TriLegacy settled with the city and exited the Shipyards.

LandMar agreed to construct the planned Riverfront Public Area and pay the debt service on the city's bonds. LandMar Vice President Jim Doyle said the company expects to release its plans by midyear.

Late last year, Mayor John Peyton proposed restarting another project that fell apart in 2004 - a new county courthouse. He halted the project in October 2004 after the guaranteed maximum price for construction came in significantly over budget.

The mayor's current plan scales back construction to meet only the short-term needs of the judicial system. The mayor's proposed $250 million project includes $140.2 million for a new criminal courthouse building; $23.3 million to renovate the Old Federal Courthouse for the State Attorney and other offices; $8.6 million to renovate space in another building for the Public Defender; and $4.1 million for repairs to the existing courthouse. The balance of the budget covers land acquisition, contingencies and administrative costs. In early March, the City Council still needed to approve the plan.

Again, as in other areas of the Southeast, Jacksonville has its share of downtown residential projects.

"On the Southbank, across the [St. John's] river, which is not quite as urban but an extension of downtown, there are major condo developments," said Bob Renaud, director of public affairs for Haskell. "There are probably 1,000 units under construction [on the Southbank]."

Haskell is going vertical on San Marco Place, a 19-story, $41.2 million condominium tower, with units selling for $300,000 to $700,000. Construction will wrap up in about a year.

Auchter has topped out the Strand, an apartment building, and broken ground on the adjacent condominium called The Peninsula, on the Southbank, both for American Land Ventures of Coral Gables, Fla. Condominium prices range from the mid $200,000s to high $700,000s.

In the San Jose/Lakewood area, Elkins will break ground in April on Old San Jose on the River, a $100 million, Mediterranean-style condominium community on the St. John's River.

Outside the City

Beach-area condominiums remain popular, too. Elkins Constructors expected to complete the mixed-use The Metropolitan at Jacksonville Beach and broke ground last fall on Pier Point, a five-story condominium with a retail component, also at Jacksonville Beach.

"The trend throughout the United States is mixed-use development," Steadman said. "Metropolitan was our first true mixed-use project, but we feel that will be the product of choice in the future."

Auchter has topped off and begun closing in Costa Verano, a $38 million condominium tower at Jacksonville Beach for WCI Communities of Bonita Springs, Fla.

Elkins is building a manufacturing facility for Hanson Roof Tile in Sanderson near Jacksonville. The plant will produce concrete roof tiles when it opens this fall.

Steadman predicted growth in industrial construction in the Jacksonville area as more companies seek easy distribution facilities near the Port of Jacksonville due to an increase in Asian traffic.

Public Projects

While not growing as rapidly as some other parts of Florida, Jacksonville's population continues to increase. Duval County adds about 880 people per month, according to U.S. Census data. The Florida Department of Transportation and Duval County Public Schools are building roads and schools to accommodate the influx.

Archer Western Contractors has begun work on a $148 million interchange at Interstate 10 and I-95 for FDOT. The six-year, 10-phase project includes 17 bridges and construction of 25 mi. of lanes. It is expected to decrease the current bottleneck at the interchange, said FDOT spokesman Mike Goldman.

Several projects are under way on State Road 9A, which will eventually complete a beltway around Jacksonville. Superior Construction Co. of Jacksonville is finishing up a design-build contract to construct 2.3 mi. of State Road 9A between St. Johns Bluff Road and Beach Boulevard, which will eventually become part of the Interstate 295 system.

FDOT also awarded Superior an $80.5 million contract to reconstruct the interchange at State Road 9A and J. Turner Butler Boulevard to improve access. The project is scheduled for completion in 2009.

Duval County Public Schools had more than $237 million in capital projects under way at the end of last year. Ajax Building Corp. of Jacksonville is nearing completion on the $21 million, 145,000-sq.-ft. Arlington replacement middle school, being built on the same campus as the existing structure. The district has selected Ajax to build the $25 million North Shore kindergarten to eighth-grade school.

Elkins is building the $12.7 million Chaffee Road elementary school. Perry-McCall Construction of Jacksonville broke ground in September on the $12 million New Berlin Road Elementary School. The Stellar Group of Jacksonville has completed about 65 percent of a food processing service center for the district.

Contractors remain rather bullish about Jacksonville.

"We have been able to weather the ups and downs," Renaud said. "I think we're in a real strong period right now."

Useful Sources:

I-10/I-95 Interchange project
http://www.thebigi.info/

SR 9A Information
http://www.sr9a.info

The Peninsula
http://www.thepeninsulacondos.com

San Marco Place
http://www.sanmarcoplace.com

Downtown Jacksonville Development Map
http://www.downtownjacksonville.org/content/?page_id=38