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Fidelity considers Shipyards tower in downtown Jax

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Fidelity considers Shipyards tower

27 February 2004

Company could also add additional 450 jobs

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By KAREN BRUNE MATHIS

The Times-Union

Fidelity National Financial Inc. Chairman Bill Foley said Thursday the Jacksonville-based Fortune 500 company should decide within 30 days whether to develop an office building on property near its Riverside campus or at The Shipyards downtown.

"We couldn't do both," Foley said from his corporate offices at Fidelity's 601 Riverside Ave. campus.

Fidelity moved its headquarters from Santa Barbara, Calif., to Jacksonville in August. Fidelity acquired the campus as it bought the financial services division of Alltel Information Services Inc., which employed 1,400 people in Jacksonville.

Fidelity promised to add 750 jobs over three years in return for an incentives package of $12.525 million, comprising a city-state tax rebate for job creation, a reimbursement of taxes for improving its property values and state road grant assistance.

"We covered our expenses in relocating our employees," Foley said. "We were just trying to come out even."

The company is growing through internal expansions and external acquisitions. Foley said the company could relocate more jobs to Jacksonville, provided the city and state assist with an incentives package.

Foley said Fidelity could boost its workforce by 1,100 to 1,200 people, up from the initially promised increase of 750, at an average wage of $62,500.

To handle the growth, Fidelity has surfaced potential expansion plans at its campus, which now has a 13-story office building and three other buildings.

"We've got real space constraints," Foley said.

Foley said that Fidelity has a contract to buy 5.9 acres next to the campus and must decide by March 25 whether to complete the deal. If Fidelity chooses that site, it probably would build a 10-story, 280,000-square-foot building, he said.

BY THE NUMBERS

About the company

Fidelity reported more than $7.7 billion in revenues and earnings topping $860 million in 2003. Fidelity employs about 32,000 people worldwide, with the majority in the United States.

If Fidelity chooses to build at The Shipyards downtown, along the Northbank riverfront, it would develop a larger building to house the headquarters, title business and part of the mortgage services business. The Riverside campus would serve as a processing center.

Foley said a Shipyards building likely would be up to 18 floors and 500,000 square feet in size. The site is on the far western side of The Shipyards, near Berkman Plaza.

"It's a great spot. The property is terrific," Foley said. He said he was talking with the city and the Spence family, which owns the Shipyards property, about the potential project.

In either event, the next building probably would not be completed for at least 20 months, given approvals and construction timetables.

While Foley said the talks are "very, very preliminary," he said that the city and the Spence family would need to "come to us with a proposal" for a Shipyards project.

In the meantime, the company continues to renovate and update its Riverside Avenue campus. As the company moves businesses and functions to Jacksonville, it probably will need to lease temporary office space until a new building is completed.

"We're going to build a building," Foley said. "We're going to know in 30 days."

Jeffrey Spence, chief executive of Shipyards owner TriLegacy Group LLC, said he talked with Foley.

"It's a great opportunity if we do that, if it makes sense for him and us," Spence said.

Spence said that if Fidelity chooses the Shipyards, "it would be an FNF campus, and my interpretation is they would own that and develop it themselves."

Spence said the city was aware of the interest, "but I can't tell you what they are thinking as far as a package" of assistance.

Kirk Wendland, executive director of the Jacksonville Economic Development Commission, said Thursday that he has spoken with Fidelity, but refers questions and comments about the potential Shipyards building to Foley.

Wendland also said that he has discussed the job increases with Foley, but that no incentives package has been designed.

Spence said the Shipyards was designed for office space along with a marina, condos and other development. "I can't crystal-ball what their needs are," Spence said about Fidelity. "We always felt like Class A office space would be on that site."

The Shipyards is the former Jacksonville Shipyards along East Bay Street. TriLegacy bought the almost 45-acre site and announced plans in 2001 for a 10-year development to include two office towers totaling 1 million square feet of first-class space, 662 residential units, 150 boat slips and a 350-room hotel, along with a 16.8-acre city park.

The city agreed to help develop the first phase with $40 million in tax-exempt bonds for the public park and pier improvements. It also agreed to a maximum $35 million tax-increment rebate over 20 years after debt service on the riverfront park is paid. That payment would be based on increased taxes generated by property improvements.

The Shipyards continues to work on plans to develop 99 condo units in One Shipyard Place. Jacksonville Jaguars owners Wayne and Delores Weaver agreed to buy one of the condos.

TriLegacy, formed in 2000 and is the development arm of the Spence family.

Fidelity is No. 326 on the Fortune 500. It sells products and outsourced services to the financial and real estate industries. It provides information-based technology solutions and processing services to financial institutions and mortgage and financial services companies through Fidelity Information Services Inc.

Fidelity Information Services processes almost half of all U.S. residential mortgages and works with 46 of the top 50 U.S. banks.

Fidelity says it also is the nation's largest title insurance company and sells other services such as escrow, credit reporting, property appraisals, flood and other insurance, and more.

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Maybe the city should focus on attracting more Fortune 500 companies to Jax, if they plan t expand like this as soon as they get here.

Really though, I like the idea of Fidelity building a larger tower at the Shipyards site. That stretch of Bay Street will bloom a lot faster with an additional 1,000 well paid employees working there. It might also speed up future condo development plans at the Berkman & Shipyards sites surrounding it. The best thing about Fidelity is they're going to building a tower somewhere downtown soon, because they definately need the extra space.

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Do you know if they have decided on the location of their tower yet?

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They purchased a lot, just north of their current headquarters on Riverside Avenue. They plan to build a 280,000sf office building, a condo tower, and a hotel on the property. The office building was originally supposed to be 10 stories, but I have a feeling it will have to be a little taller to fit all of those projects on that site. If not, it will still be cool, because that will become one pretty urban peice of property.

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