JEA’s board of directors is considering five Downtown locations for a headquarters campus, including two new developments in the urban core and one near TIAA Bank Field.
It’s the first time in months the group has discussed publicly the stalled effort to relocate JEA’s operations from its longtime Downtown headquarters at 21 W. Church St.
The board in 2017 agreed to pursue building a new headquarters Downtown, citing the cost of redeveloping its 19-story tower and adjacent customer service center.
In October, it engaged the CBRE real estate company to conduct a workplace strategy analysis.
There’s been little public discussion since then. A debate over possibly privatizing the public utility and the resignation of CEO and Managing Director Paul McElroy consumed much of JEA’s focus and attention.
The utility is seeking 200,000 square feet of space, a reduction of about 160,000 square feet, to accommodate about 836 employees, according to the latest estimates.
JEA identified five possible locations for a downsized footprint.
Two involve leasing multiple floors in the Bank of America Tower or One Enterprise Center.
JEA also is considering three sites for new construction.
The first, “Block 48,” is the site identified in June 2017 and the subject of a negotiated land swap with the Downtown Investment Authority.
Last summer, the DIA board agreed to negotiate the land swap that would give the utility a 1.52-acre site at 337 W. Adams St. next to the Duval County Courthouse in exchange for its current property.
JEA would have marketed the West Church Street campus to potential buyers, giving the city the profits. If the buildings weren’t sold, JEA would clear the site and transfer the parcel to the city, which would then market it for redevelopment.
A second option is to become an anchor tenant in one of the buildings proposed by Jacksonville Jaguars owner Shad Kahn, who is seeking to develop the western parking lots, including Lot J, next to TIAA Bank Field.
Board member Kelly Flanagan recused herself from the discussion since she is the chief financial officer of the Jaguars.
Both projects for Lot J and Block 48 show a seven- to eight-story building with a detached parking garage.
The board also is considering a proposal by developer Steve Atkins for a mixed-use, four-block footprint Downtown.
Atkins, who is developing the Barnett and Laura Street Trio buildings, was in attendance. He said he couldn’t disclose details other than to say, “It’s an opportunity to continue revitalizing Downtown.”
He said no agreements were in place.
Atkins’ project calls for JEA’s current headquarters to be retrofitted and expanded. In addition to JEA’s West Church Street parcel, renderings show three more sites between Main, Ocean, Monroe and Ashley streets developed into mixed-use.
While leasing space in the existing towers trims the estimated construction timeline from 24-36 months to 18-24 months, board members acknowledged it would not necessarily support Downtown development in the same way new construction would.
Board Vice Chair Husein Cumber said the board shouldn’t weigh “developing Downtown” ahead of the overall benefits to JEA.
If the utility were to move its employees into the Bank of America Tower or One Enterprise Center, security could be an issue because JEA would not be the only tenant, said JEA Director of Government Relations Nancy Kilgo.
There also is the possibility that JEA wouldn’t be able to lease contiguous space.
“Space has a huge effect on productivity, has a huge effect on company culture and interaction between people,” said new JEA board member John Campion.
For the three new construction scenarios, the greatest risks are higher costs, possibly less cost control and longer lead time.
A report released in January 2017 suggested the cost to build a campus would range from $58 million to $78 million. The cost to redevelop the 19-story tower is around $60 million to $65 million.
City Council liaison Matt Schellenberg said he was glad to hear JEA addressing the issue again.
“Older buildings are costlier over time, and I think a new building would be more efficient,” he said.
Schellenberg said while he wants what’s best for JEA, keeping the headquarters and its employees in the urban core “is essential to the viability of Downtown.”
“I think that they need to issue an RFP immediately to solicit additional input,” he said.
The next step for the board is to finalize its preferences, which could happen by December. In September, the board could issue a Request for Qualifications or Request for Proposals from interested contractors.
The board ideally would like to accept a plan by March.
JEA hired a consultant in 2016 to determine what to do about its properties, which executives say are inefficient and in disrepair.
JEA bought the tower and the next-door customer service building in 1989 for $8 million. They were built in 1962.
The buildings are considered contributing properties in the Downtown Jacksonville Historic District as listed on the National Register of Historic Places. Demolition would require the Historic Preservation Commission’s approval.
