After slogging through the COVID-19 pandemic, the outlook for downtown Jacksonville, Fla., has ended 2020 on a sweeter note as the mega-development called The District picks up steam in completing financing that would enable long-awaited construction to start in 2021.
The proposed development, which has been in the works for years without any ground-breaking, got a second wind in September after Dallas-based Preston Hollow Capital took the lead role in turning a 32-acre vacant tract of land into 950 residences along with a hotel, several hundred thousand square feet of office and retail space, and a marina.
The city granted a year's worth of extensions that pushed the deadline to the end of December 2020 for closing on privately financed bonds that will get the first phase of construction under way.
That closing took place Dec. 22 on a $35.6 million bond issuance, which would clear the way for the city to release its own share of taxpayer dollars to get construction started.
"We make it our mission to partner with municipalities across the country to help them with projects that achieve transformative community impact," said Ramiro Albarran, managing director of Preston Hollow Capital, in a statement released by the city about the bond closing. "The District is just such a project."
"From a downtown perspective of what that development would mean, it's a huge project," added Jake Gordon, CEO of Downtown Vision, a nonprofit that represents downtown Jacksonville property-owners. "It's going to be almost like building a little community within our downtown."
The first phase of construction on the Southbank riverfront land will entail building the streets, drainage, utilities and other in-ground infrastructure.
The Jacksonville City Council approved a redevelopment agreement in June 2018 for the city to spend up to $26.4 million for public improvements such as a riverfront park, river walk extension, shoreline bulkheads and roads at the site.
The city's contribution was in a holding pattern, however, until the developer moved forward with issuing bonds for infrastructure geared toward the private portion of the development.
The original deadline for closing on the bonds was Jan. 13, 2020. The Downtown Investment Authority (DIA), which oversees development for the city of Jacksonville, extended that deadline several times to give more time for lining up the private financing.
The board for The District Community Development District (CDD), which is a quasi-governmental entity, voted Dec. 14 to issue nearly $32.2 million in bonds, which were purchased by Preston Hollow Capital.
Elements Development of Jacksonville, which owns the land, will convey four acres of riverfront property to the city for the planned park and river walk extension. The park space will tell the story of Jacksonville's "extraordinary medical facilities" by using art, exercise, gardens and "interactive features," according to the Dec. 22 announcement.
DIA CEO Lori Boyer said that before the end of February, "all permits must be in hand, and we are on track for that." She said construction would start by the end of March.
In addition to the 950 residential units, The District also would have 147 hotel rooms, 134,000 sq. ft. of retail space, 200,000 sq. ft. of office space and a 125-slip marina.
The city approved the development deal with land-owner Elements Development of Jacksonville, which bought the property after the city-owned utility demolished an electric generating station that had stood on it. In September, the company announced that Preston Hollow would be assuming all the rights and entitlements allowed under the redevelopment agreement with the city. Elements became an entity managed by Preston Hollow.
Gordon, of Downtown Vision, said development investment in downtown "was doing unbelievably well" before the pandemic hit, adding that the coronavirus caused a steep drop in foot traffic in downtown Jacksonville, putting a squeeze on stores and restaurants.
He said it's encouraging to see The District is moving forward because the combination of big and small projects are how other cities worked for years on downtown development before gaining national attention.
"These huge projects take a really long time, but when the ball starts rolling downhill and you really see it, it starts to catch fire," Gordon said. "There are years and years of hard work that have to precede that."
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