A project that looks to add 1,000 multifamily units and thousands of square feet of retail space to downtown Jacksonville’s North Core is just the first step in what the developers say could be valued at $2 billion worth of work over the coming decade.
Work on the first phase of the project could begin in mid-2024, transforming a four-block area on the edge of downtown.
That phase will consist of five buildings centered on Pearl Street, with the project stretching between Union and Church streets, near Florida State College at Jacksonville’s downtown campus.
The rest of the project would extend throughout the urban core, with Gateway saying it owns almost two dozen acres of properties in North Core, the center of downtown, LaVilla and Cathedral Hill.
“We’ve been assembling properties — 22 acres and 20-plus city blocks — just over the past year,” Gateway Jax LLC CEO Bryan Moll told the Business Journal.
All told, the project would be one of the largest developments the urban core has seen, dwarfing the $182 million project Fuqua Development has underway on Riverside Avenue and even the $600 million entertainment center project the Jaguars have proposed near a renovated EverBank Stadium.
On its own, the Pearl Street portion of the project would be transformational for a section of downtown now occupied mainly by parking lots and garages. If the full scope of the plan comes to fruition, it would rival developments in cities like Tampa, Miami and Nashville, changing the face of the urban core.
“People wonder why anyone would want to live downtown,” Moll said. “The answer is, if you provide the right amenities for them, the right mix of retail and restaurants, those residential dwellers will have places to go and things to do.”
Gateway Jax plans to share more details on the project at a press conference later today.
Proven track record
The team behind the development has a long history both in and out of Jacksonville.
The main funder on the project is DLP Capital, a fast-growing real estate company based in St. Augustine.
Founded in 2006, the company has built and funded projects around the state and beyond, with a focus on buying and building multifamily housing nationwide. Last year, an affiliate of DLP acquired a bank in Starke, supercharging its balance sheet.
DLP put in about two-thirds of the equity invested in Gateway and will be lending about 80% of the debt that is financing the project.
Given the turbulent capital markets, DLP Capital CEO Don Wenner said being able to fund the project gives the team a leg up in a city that has seen projects falter when faced with issues related to funding.
“We have the great benefit that we don’t need to go out there and raise the equity or go out there and find a lender to do this project,” he said. “We’re able to be the lender and be the primary equity with the capital we already have.”
“What Shad Khan and the Jags are doing by the stadium, and what we’re doing can put downtown on a phenomenal trajectory,” JWB President Alex Sifakis said. “It’s really transforming an area that wouldn’t have seen development in 10 to 15 years.”
Moll, who joined Gateway Jax last year, has worked on large mixed-use projects in urban areas including Tampa’s Water Street development and Amazon HQ II in Arlington, Virginia.
Water Street has been a key piece in the revitalization of downtown Tampa. Vertical construction started in 2018 and completed its first phase of development in 2022 with the opening of The Tampa EDITION. The project has won an Urban Land Institute award for excellence.
Laying out a plan
The project now being rolled out has been years in the making, the principals behind the plan say.
Sifakis recalled purchasing downtown properties over the past three years, taking executives on scooter tours to lay out the vision for the properties and raise funds.
“Urban assemblages are tough, you have to track down the owners,” Sifakis said. “We’ve been working on it for a long time.”
In early 2022, JWB acquired the Lighthouse parking garage at 721 N. Pearl St. that will be part of the Pearl Street development and other nearby properties, two years after acquiring the nearby Porter House mansion.
In July, the company also bought the Salvation Army building at 328 N. Ocean St., a 12,000-square-foot parking lot at 39 E. Monroe St. and a vacant 5,000-square-foot property west of the Salvation Army building on Duval St.
Sifakis said the recent Salvation Army purchases do not factor into Gateway Jax at this point. Moll declined to discuss what other properties would be included in later phases of the project.
While the Gateway vision for downtown extends throughout the urban core, the initial focus will be on five buildings on Pearl Street between Union and Church streets.
“It seemed like a no brainer that Pearl Street and this Pearl Street district was the perfect spot for this first phase,” Moll said.
Three of the buildings will add up to 148,930 square feet of multifamily and retail space, while a 21,100-square-foot building will be redeveloped at Pearl and Ashley streets.
A portion of the project might be used for a hotel, and the developers said they are working to get a grocery store in the development.
“We’re focused on everyday needs and a place where people want to spend time after work or on the weekends. It might a grocery store, lots of restaurants,” Moll said. “The one thing we’ll really have to have is great food and beverage. That’s going to be critical.”
The development keeps the 55,900-square-foot “Lighthouse” garage that is bordered by Pearl, Union, Julia and Beaver streets and marked by a small, nonfunctioning lighthouse and adds first-floor retail to it — part of what Moll said was a desire to “heavily leverage the existing parking supply.”
Finishing the process
With the plan unveiled, Gateway will now focus on shepherding the project through various city agencies.
The site plan for the Pearl Street project was approved by the Downtown Development Review Board last week, with final approval slated to be asked for next month.
The first three multifamily buildings are also poised for conceptual approval next month, and Moll said they are targeting submitting a request for incentives to the Downtown Investment Authority in coming weeks.
The DIA requests include a 75% property tax rebate of $66 million over 20 years and a $41 million grant upon completion of the project and successful leasing of retail, according to the developer.
While the developers work on governmental paperwork, they’ll also be focused on promulgating a vision for the urban core — something Wenner said has been missing.
“I really believe something like this,” he said, “bringing housing, amenities, ultimately hotels, grocery stores and companies to downtown, is only going to further Jacksonville as a top job market and a top destination in the country.”