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Expert sees steady market for downtown residences


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The Times-Union

As a pioneer downtown Jacksonville homeowner, Russell Motley finds his neighborhood a peaceful retreat, especially after the workforce heads home.

"It's uncharted territory that's very quiet and peaceful," said Motley, who has lived at Parks at the Cathedral on Church Street for about a year and a half. "Most people haven't seen it that way."

With more than a dozen major downtown development projects in the works, that could soon change.

Motley is banking on it.

"It's about looking 10 years from now and thinking -- what's my property going to be worth," said Motley, a co-anchor of WTEV TV-47's 5:30 p.m. newscast. "I encourage other developments because it's going to raise my values."

If all the projects go as planned, the number of downtown residences available could triple in the next five years to more than 6,000. Most of those living there now are like Motley, professionals wanting to be close to work, said Ray Rodriguez, who did an extensive study on the market for the city. And while the builders are quick to say they're selling fast, Rodriguez, a Jacksonville-based consultant who tracks real estate trends, predicts a steady pace.

"Yes, they will sell, but go like gangbusters, no," Rodriguez said. "They're going to go consistently and have a nice absorption rate."

He seriously doubts that all 6,000 of the planned dwellings will be built and expects the number of downtown units will be closer to 4,000.

The city has set a goal of 10,000 residences downtown, including the Southbank area.

The driving force behind downtown residential development has been more than $58 million in city incentives. That doesn't count $111.5 million pledged for The Shipyards, a waterfront project in limbo that also includes public park areas, according to the Rodriguez report.

"The government, the city of Jacksonville, are the ones behind this," Rodriguez said. "There's no doubt without the incentives it couldn't happen."

But that money could be harder to come by.

The city is going to scrutinize residential incentive requests more closely, said Susan Wiles, spokeswoman for Mayor John Peyton. "Early projects, especially on the Northbank, were incentivized with the hopes they'd be a spark plug," she said. "We're seeing that pay off."

The mayor hopes what develops will be a mix of affordable and luxury but would like to let demand take over, Wiles said.

"The downtown housing economy is entering a stage where it is market-driven," she said. "The mayor is inclined to let the market drive what's being built."

Developer Steve Pardo, who announced Monday a 1,500-unit development on the Southbank called San Marco Riverwalk, will join the list of developers who will ask the city for public money but says he's not sure how much.

Pardo points out that his plans could change depending on market conditions. Right now, one of the project's three proposed towers is planned as rental apartments. "We are studying the market for the demand of additional rentals," he said.

Most downtown renters are young professionals, Rodriguez said. The owners are commonly in their 40s and career oriented.

"The market's not there yet for million-dollar condos in downtown Jacksonville," Rodriguez said. "We're not there yet. Excluding the top floor, there's always a buyer for the top floor."

Of the 96 units sold at Berkman Plaza, 66 purchased the condo as their primary residence. Of those, 13 are female, 10 are jointly owned, 20 are single males and 23 are married, according to Rodriguez. A message left at the Berkman offices was not returned Tuesday.

Thirty are owned mainly by locals but not considered primary residences. "These are more high-income people," he said. Most developers interviewed said that demand has exceeded their expectations.

Mike Gentry, vice president of sales and marketing at American Land Ventures, which is developing The Peninsula project at St. Johns on the Southbank, said pre-sales have been strong.

Gentry's company has already sold about half its units at the luxury condominium project. He said he welcomes Pardo's development and said the project's planned supermarket and other support services reinforce the vitality of the area.

Gentry said The Peninsula has sold to a variety of consumers, but about 60 percent are empty-nesters, and other residents include some younger couples with no kids.

Nearby, Barbara Cesery and her brother, Bill Cesery, are developing The Lofts San Marco, a conversion of the South Jacksonville Elementary School into rental lofts and town homes. The project is located along Cedar Street between Flagler and Belmonte avenues in San Marco, near the Southbank growth.

Barbara Cesery said they've leased more than half the spots at the lofts and are not finished with the project.

"We're moving them in as fast as we can," Cesery said.

In Rodriguez's study, most downtown residents were concerned with a lack of creature comforts. "They want to be able to buy milk or a soda," he said.

mary.moewejacksonville.com, (904) 359-4689

This story can be found on Jacksonville.com at http://www.jacksonville.com/tu-online/stor..._16458886.shtml.

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