Failing selection by JEA, Balanky considers Plan B for his Kings Avenue property

Failing selection by JEA, Balanky considers Plan B for his Kings Avenue property
A rendering of a high-rise residential building Michael Balanky is considering building on his Kings Avenue property.

When the Jacksonville Energy Authority’s Board of Directors unanimously selected Ryan Companies’ plan to build its new headquarters at Block 48, land currently owned by the City of Jacksonville at 325 W. Adams St., Southbank resident and Chase Properties CEO Mike Balanky knew it was time to start thinking about a Plan B for his property on Kings Avenue in San Marco near Route I-95.

Balanky’s Kings Avenue plan had been shortlisted by JEA as a location where it might build its new headquarters. Unfortunately for Balanky, his plan trailed behind the Adams Street property when the points were tallied after a series of criteria was graded by a team of experts from CBRE and the JEA board. Some criteria they considered included customer engagement, building program accommodation, workforce engagement/culture, development schedule, economic development, timing and site control. Also rejected by the JEA board was a proposal to establish JEA’s headquarters near the “50-yard-line” of Lot J, a mixed-use development west of TIAA Bank Field that has been proposed by Jaguars’ owner Shad Khan. The Cordish Companies had been tapped by Khan’s organization as developer, and if selected, the new headquarters would have encompassed the office portion and first phase of Khan’s ambitious Shipyards’ plan that would include retail, residential, a convention center and entertainment district near the Jaguars’ stadium.

The cost to build Ryan Companies’ winning 207,810-square-foot building is approximately $72 million, according to documents submitted to JEA. Construction could begin as soon as April 2020, with work expected to be completed within 18 months. Unlike Balanky’s project, which was to be built on land he already controls that includes a 1,650-space garage, Ryan Companies, a Minnesota-based firm, still needs to purchase the property from the City and build an 850-space garage adjacent to the building for JEA employees. The Adams Street project also needs to be signed off by the Downtown Investment Authority and the Downtown Development Review Board, whereas Balanky’s land is already zoned correctly and needs no additional approvals from the City, he said.

Rendering at street level of the building Chase Properties is peddling as a possible headquarters building for corporations interested in settling in Jacksonville.
Rendering at street level of the building Chase Properties is peddling as a possible headquarters building for corporations interested in settling in Jacksonville.

“JEA looked at the site they ended up with for two years. They considered buying it themselves and building on it but then decided they did not want to take the development risk. Then they decided to take out an RFP (Request for Proposal) and see what else was out there. As they would have it, they ended up right back there anyway. There are a lot of reasons to keep them downtown in the core,” explained Balanky. “There is a lot coming on in downtown Jacksonville, which is exciting. We were, of course, disappointed we didn’t get selected, but we are happy for JEA. It was a fun process to work with them. We knew going in there was a possibility, obviously, we would not win, and we did a risk-benefit analysis to see if it was worth the time and the money to do it.”

Although Balanky spent a lot of time and money creating a new design for his Kings Avenue property with some of the top architects in Jacksonville, the effort was not wasted, he said. Going through the process and being on JEA’s shortlist provided his location with visibility that’s tough to obtain any other way, he said. 

“The exposure we got for the site made it worth it if we didn’t get it. “That was our exit strategy going in,” he said, adding a “number of office brokers” from throughout the country have already contacted him about the property. “We have a design already formulated if anybody wants to use it. Also, there is the possibility to repurpose it or redesign it. It’s almost like staging your house. We have showed what could be at this location because it was one of the finalists,” he continued, noting he still has his design team at the ready. “If construction costs would come down just a little bit, we could get started sooner rather than later. We just have to see how it shakes out.”

One idea Balanky is also considering is to return to his original plan of building a high-rise residential building on the property. “Unfortunately, construction costs are high right now for high-rise residential,” he said, noting the current the cost of steel and concrete are prohibitive because so much construction is going on and labor costs are “through the roof.” Because so many residential units are being built in the San Marco area, he is still deciding whether it is worthwhile to build residential units at this time. “We want to be careful we don’t step into an over-saturated situation,” he said. “We have a fresh 70-year lease [from the Jacksonville Transportation Authority]. We want to make sure when we do build a building, it gets absorbed properly.”

At the same time, he is also looking at possibly providing space for other office users –office condos or traditional office rental space – or for retailers by building a structure with ground-floor retail and either office or residential above it. If he can get a 50% prelease of the building, he may build office space on speculation, he said. “Ideally, we’d like to find somebody who is looking for corporate office headquarters. People now realize the connectivity of this location, and it’s got 155,000 cars a day driving by. That’s over 56 million cars [on I-95] per year. It’s a great location.”

In the meantime, Chase Properties is occupied with building a 280-acre adult community with 372 homes called Parkland Preserve in St. Johns County. It is also working on a retail project at the northwest corner of University and Atlantic Boulevards, he said.

By Marcia Hodgson
Resident Community News

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