Despite pending JEA privatization discussion, new headquarters still a go

Despite pending JEA privatization discussion, new headquarters still a go
Rendering of the new JEA headquarters to be built by Ryan Companies of Minneapolis, Minnesota

“All systems are a go,” for Ryan Companies when it comes to building a new headquarters for the Jacksonville Electric Authority, according to Kathy Jalivay, a spokesperson for the Minnesota-based firm.

Even amidst talk of possibly rewriting the public utility’s charter, slashing JEA’s workforce by 29%, abandoning plans for the new headquarters, and having the City sell the utility to a private company, as far as Ryan Companies is concerned it’s “full steam ahead.” 

The construction firm, which does work in 28 states and $130 million in business in the Southeast alone, recently purchased the land at 300 West Adams St. from the city and is currently in negotiations with subcontractors, said Jalivay. On Aug. 20, it submitted its conceptual design application to the City’s Downtown Development Review Board. Its proposal is to build a nine-story, 190,000 square-foot office building with an adjacent nine-level parking garage comprised of 850 spaces.

 JEA executed a 15-year-lease with Ryan Companies July 11, said Gina Kyle, the utility’s spokeswoman, noting the lease includes a cancellation clause allowing JEA to terminate the lease by Sept. 30. 

However, Doug Dieck, president of Ryan Companies Southeastern Region, isn’t worried.

“We’re signing a 15-year lease so the chances of them being there for 15 years is 100% we hope,” said Dieck. “Anything beyond that would be fantastic. They’ve been in their current facility for 50 years. The chances of them being in this facility beyond 15 years are very good.

“If the decision is made for the city to get out and privatize, we would just have to react to it,” he continued. “We’ve underwritten JEA’s credit and the company as it is is a development risk. That’s what we do as developers. We’ve priced it appropriately to go with that. We feel good about who they are. Companies often change as time goes on and we’ll roll with it.”

 Choosing from a shortlist of plans by three developers, including Southbank’s Michael Balanky, JEA’s Board of Directors unanimously selected Ryan Companies’ vision to build its new headquarters at 325 W. Adams St. in Jacksonville’s urban core. The cost to build Ryan’s winning 207,810-square-foot high-rise and adjacent multi-level garage is approximately $72 million, according to documents submitted to JEA at the time.

As a man who has managed complicated construction projects while developing office, industrial, retail, multifamily and healthcare projects in Minneapolis, Phoenix, Chicago, Des Moines, and Tampa Bay, Dieck said he believed his company, which collects $1 billion in revenue on an annual basis, was selected because it was “the most qualified,” and the “most responsive to the RFP (request for proposal) relative to access to public transportation, restaurants and whatnot.

“I think what they saw along the way was a great differentiator and that was who Ryan is. We were very thorough in the lease review. We were very responsive and timely with quick detail. What they saw there was what they were anticipating from each of the groups going forward,” he said, noting Ryan quickly was able to provide documents that identified the landlord’s responsibilities from the tenants in a timely way.

“What we are building is a building for JEA. We are not trying to put a Ryan signature on it.  What we’re trying to do is to figure out by working with them what they really want. We listen to what they say and try to figure out what it means. Then we bring our expertise, having done this across the country, to that conversation. The outcome is usually very good,” he continued.

In the competition over the JEA headquarters, “what we saw, which was surprising to me, was that we were the only group that was not pushing their good idea and saying JEA should be a part of this, as opposed to, ‘what did you say you wanted? Why don’t we give you that?’ 

“I think they chose the location,” he continued, adding that although Mike Balanky’s Kings Avenue plan appeared to be a good one, being located outside of the Downtown Overlay may have been fatal to his cause. “Clearly that was going against what they said they wanted in the RFP,” Dieck said. “I think that was a factor. Mike brought in a good team, but I think our sophistication on having done a lot of this was reassuring.  Who was going to buy the property? Ryan Companies. “Who is signing the lease? Ryan Companies US, Inc. It wasn’t let’s put a team together and pitch this deal. We were bringing who we are. Our team is very established. We’ve got 80 years of doing this fully integrated design, construction, development, property management, and capital markets all within the company. The competitors of ours were good competitors, and they put together good teams, but they were putting them together to pitch while we brought ‘this is what we do, this is who we are,’” to the table.

Dieck said he expects to break ground on the project that is to be built on a vacant lot adjacent to the Duval County Courthouse green, in the first quarter of 2020 and turn the building and its adjacent parking garage over to JEA 21 months later in the fourth quarter of 2021. “I don’t expect this to drag on and on,” he said. “We will turn this over right on time.” 

He also said Ryan’s building process is 100% “open book,” allowing transparency taxpayers can be comfortable with. “JEA will have 100% control of how big the building should be and what the cost of it is. If they decide they need 10,000 more square feet, they pay for it. If they need 20,000 less, they pay less. We will customize it to exactly what they want,” Dieck said. “There are no hidden fees, no hidden dollars. CBRE, which drove this process on their behalf, did a nice job. We agreed to a certain fee to do the project, and our fee is our fee. JEA will have its fingers in the mix the entire time.” 

In July, Ryan Companies opened Grand Living, an assisted living facility in the multi-use development of Tamaya, on Beach Boulevard, which will be managed by Ryan Companies in partnership with Grand Living senior living property management company. “We bought a piece of property and we did a $50 million project. We look for opportunities across the country and within the region,” Dieck said, adding within five years he anticipates Ryan Companies will be doing $500 million of business in the Southeast. “I have people looking for opportunities here. We see great population growth in Jacksonville, and with that comes many things, more residential growth, more senior living, more retail. The mixed-use-type projects that are happening in Brooklyn are some that we do often. We’d love to do something like that in Jacksonville,” he said, adding that he would love to do something on The Landing site.

“I see that as a civic property on the water. Wouldn’t it be neat if there was – and I’m making this up – an aquarium or a history museum?” Dieck said. “I see the Old Courthouse project, from my developer perspective, as a private development at higher density on the water. You see a couple of those across the river to the east (on the Southbank). It could be fantastic for that,” he said.

“What you need is users. Retail can be a supporting cast member in almost any project, but what you need are bodies. Office people bring bodies to downtown. That’s why JEA is staying here.”

Ryan Companies’ philosophy is to be a “servant” and “placemaker” to its customers,” Dieck said. “We aren’t interested in the quick buck, or ‘hey, let’s put that project up and not care what the neighbors think,’” he said, adding his company is not one to “muscle” a project through. “If the neighbors have an issue and want to talk about the project, it’s our job and our responsibility to be good stewards in the community because we are changing the landscape of the community,” he said.

By Marcia Hodgson
Resident Community News

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