OPINION | Southbank storage units are a bad deal
After repeated attempts against significant community opposition to develop self-storage units on a prime corner in Downtown’s Southbank neighborhood, Atlanta-based developer The Simpson Organization is back with a new proposal that will require a rezoning and taxpayer incentives to construct a 10-story building to include 100 low-income housing units, between 550-600 self-storage units and retail space. In April, the project will be included on the agenda of the Downtown Development Review Board (DDRB).
Located at the corner of Hendricks Avenue and Prudential Drive, a proposal is being pursued to redevelop this site surrounded by single-story and five-story buildings, into a ten-story building.
A look at what this site could look like, if plans to construct a ten-story self-storage unit and apartment building are approved.
In order to fill financial gaps associated with providing rent-subsidized apartments, the DIA will possibly loan the development team a $600,000 Affordable Housing Support Loan payable at an interest rate of 1% over 20 years. Funding rent-subsidized apartment complexes require the use of Low-Income Housing Tax Credits (LIHTC), a federal tax incentive administered by the Florida Housing Finance Corporation (FHFC). Low Income Housing Tax Credits issued through the State of Florida that are primarily funded through LIHTC awards are highly competitive, as funding exists for only a handful of projects each year. Having local municipal participation is considered a crucial element of successful awards of these extremely limited funds. The DIA created the Affordable Housing Support Loan in 2022 to provide a non-competitive funding program for developers of affordable housing looking to participate in competitive financing arrangements through FHFC.
If this proposed development is awarded LIHTC financing, the developer will then come back to the DIA to request a $6 million loan featuring a below-market interest rate, and likely some form of REV grants to refund a portion of the property taxes generated by the site. In effect, February’s DIA meeting was the first step towards publicly incentivizing self-storage units- even though Downtown, St Nicholas and San Marco residents and business owners are overwhelmingly opposed to such a use that was outright banned from this portion of Downtown 5 years ago.
The developer has twice tried to move forward with plans to place a project featuring self-storage units here. Downtown’s Southbank is already plagued by dead space, and allowing more self-storage units simply serves to further stifle a key street that is intersected by hotels, offices, restaurants, multifamily buildings and a long-awaited megaproject known as RiversEdge.
A proposed elevation of the self storage complex as proposed
A section of the self storage complex as proposed
The developer has previously retained high-profile land-use attorneys and lobbyists in the hopes of pushing through a development that the community has pushed back against since 2021. In 2023, despite former Mayor Lenny Curry’s administration trying to tip the scales in the developer’s favor, City Council voted against the previous rezoning request on a 9-9 vote. Now, that same team has enlisted the services of another high-profile local housing developer in Vestcor, who currently holds tens of millions of taxpayer-financed loans for housing projects throughout the Downtown Investment Authority’s boundaries from below-market rate loans on market-rate housing such as the Carling and 11 East Forsyth, to a series of affordable housing projects in Brooklyn, the Cathedral District and LaVilla.
For Vestcor, this deal makes financial sense. They previously had this property assemblage under contract in 2021 for a Lofts of the Southbank affordable housing apartment and retail project. That deal fell apart when Vestcor was unable to attain highly-competitive and extremely limited low income housing tax credits from the Florida Housing and Finance Corporation.
By partnering with The Simpson Organization, Vestcor is avoiding certain capital contributions (IE the purchase price of the land) that they would have had to fund if they were pursuing the original Lofts of the Southbank apartment and retail project on their own. The project also relies on an almost $5 million deferred developer fee. Quite simply, a developer fee is cash received by the development team once a project is complete (or drawn out progressively when certain development thresholds are met). It acts as an incentive for completing a project on time and within budget. A deferred developer fee can be best described as a form of sweat equity, allowing Vestcor to count their developer fee in their own required equity contribution (essentially meaning they bring less cash up front). This is an extreme oversimplification as a deferred developer fee can also be counted as debt on the balance sheet and likely will be paid back to the GP over time, but breaking this down requires more than two sentences and is irrelevant to the larger issue – self storage units are being publicly incentivized Downtown by Duval County taxpayers (or more accurately, on the Duval County Taxpayer’s credit card).
By partnering with Vestcor, The Simpson Organization believes they have a path forward to what the developer previously told the Downtown Development Review Board would be ‘the most successful of the 24 self-storage projects they have previously developed.’
After Vestcor’s original Lofts of the Southbank project never materialized, Simpson swooped in to aggressively push for a project which would be in direct conflict with the Downtown Overlay zoning and redevelopment plan established after considerable input by the public and development community in 2019. Although self-storage units were specifically not allowed on the Southbank, the development team is attempting to exploit a perceived loophole whereas the Overlay does not prohibit mixed-used development that include integrated self-storage.
This mixed-use loophole is what led to the eventual approval of a two-story gas station in Downtown’s historic LaVilla neighborhood. The previous Simpson “mixed use” proposed development included 80% self-storage units and 20% retail space, with very limited on-site parking. Now they are partnering with Vestcor to present a project that includes four floors of up to 100 rent-subsidized apartment units, four floors of roughly 136,000 square feet of self-storage units (34,000 square foot floor plates, which could equate to anywhere between 550-600 storage units depending on configurations), a structured parking garage and 14,500 square feet of retail space within 4 bays (one of which would include the customer-facing retail needs of the self-storage facility).
The bottom line is that this proposal is not consistent with creating a vibrant, walkable Downtown. Furthermore, the public incentives required to make this project work creates a dangerous precedent for future developers looking to build incompatible uses in our Downtown, which desperately needs new development that enhances, not detracts from creating a walkable and vibrant environment.
The size of the building at 10 stories is vastly out of scale with surrounding buildings which do not exceed five stories. In fact, this 10-story building which features roughly 5-stories of a blank wall directly abuts the oldest remaining residential building from the city of South Jacksonville—1451 Home Street, built in 1909. Other nearby structures include the single-story City Grill restaurant and the single-story BB’s restaurant, which itself includes portions of the building that have historic designations prohibiting their demolition. The scale is too large for this corner, and roughly half of the building’s frontage will feature blank, windowless walls.
Opened in 2000, BB’s on Hendricks Avenue took over a historic building. It was originally constructed in 1938 as the old Thompson House- the first freestanding, full service restaurant Downtown.
Dating to 1909, 1451 Home Street is the last remaining historic residential structure in this section of the city formerly known as South Jacksonville.
This corner serves as the centerpiece to the Southbank’s pedestrian experience. Three hotels flank this corner. When visitors to our community book rooms at the Marriott, Hilton Garden Inn, Extended Stay America, or even the nearby Doubletree by Hilton – they will be met with a monstrous building dedicated to self-storage units. Jacksonville, like already vibrant city centers in Savannah, Charleston and Denver, restricted the proliferation of self-storage units in this area for good reason. Now, visitors looking to attend concerts, festivals or football games could soon be met with a massive self-storage building looming that creates an imposing barrier towards the desire to walk past to find potential places to eat and shop along bustling Hendricks Ave. or Kings Ave. The potential to revitalize Kings Avenue was recently buoyed by relaxing requirements for on-site liquor sales, and at least one business has already opened as the result of these changes. The self-storage units that already exist Downtown have proven unequivocally that they attract homeless and shady characters that congregate (and sometimes temporarily camp) outside, creating an uncomfortable environment that would scare off out-of-town families visiting Downtown. They are in effect, beacons of blight.
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As seen here, a ten-story building featuring nearly five-stories of blank walls would stick out like a sore thumb, and open up Home Street to a constant stream of U-Haul trucks and trailers of junk.
Not only would the scale of the building and proposed use contribute negatively to the pedestrian experience- effectively taxpayers are being asked to publicly subsidize self-storage units. That’s a bridge too far. A taxpayer-funded incentive package should have a much higher standard, than helping to usher in self-storage units, especially after the elimination of such a use from this and nearby sites was enacted in 2019, and after more than 200 residents and surrounding property owners came out in 2023 to oppose such a use. A more appropriate path would be to work with Vestcor to be the sole developer on a mixed-use project that does not include self-storage units. This may require additional local participation in the forms of higher cash completion grants to offset the land acquisition costs, or an outright purchase by DIA with an extremely low-cost ground lease to Vestcor. Although not ideal, this path would provide a far superior project that would more fittingly support the residents, property owners and hard-working entrepreneurs who have invested in this area for years. Without the housing, this project wouldn’t have a prayer of moving forward. And without incentives, the housing portion doesn’t work. The simple answer is to remove the unwanted use, and negotiate an incentive package for what matters- an affordable housing building which features ground-floor retail space.
Affordable housing is a critical need in Jacksonville. But is this truly quality affordable housing? Should rent-subsidized tenants have to deal with the negative externalities that a self-storage facility would bring on site? A typical tenant that would qualify for housing in this project would earn 80% of the area’s median income. An example would be a single mother, who is employed as a third-year Duval County Public School teacher, or a recent honorably-discharged Navy veteran who just joined the Jacksonville Sheriff’s Office as a Community Service Officer. Living on top of a potentially 500+ unit self-storage facility means that these working-class public servants will be dealing with a constant stream of Uhaul vans, dozens of unhoused drifters entering and exiting their rented storage units, and the potential rodent problems inherent when hoarded junk is dumped and poorly stored in units. Vestcor’s ‘Lofts’ products that already exist throughout Downtown are generally well-constructed and well-managed. Why subject this quality product to the adverse consequences that self-storage units bring?
To make your thoughts known ahead of April’s DDRB meeting, a list of contacts for individual DDRB board members can be found here.
I’m an otherwise YIMBY (Yes In My Backyard) advocate. Here’s my take on denying another affordable housing project based on particularly arbitrary reasons, despite the overwhelmingly positive outcomes that the project would employ. Here’s my take on a Murray Hill self-storage unit, which was vehemently opposed by neighborhood residents and business owners. It was my opinion then as it is now that opposition in that case should have taken a backseat towards focusing on viable solutions that would have improved a product in which the property’s underlying zoning allowed for that proposed use by right. But this Southbank use is not allowed by right and frankly, not wanted. Affordable housing is desirable, and the DIA must work with Vestcor to do whatever is possible to make a standalone Lofts of the Southbank development financially viable without an attached self-storage component. That scenario was once a possibility for this site in 2021, and should again be a possibility in 2024 and beyond. But the proposed use is out-of-scale, and out-of-character for this site. In this case, my YIMBY-ism is taking a back seat to reality. And the reality is, that it is a sad state of affairs when the discussion about Downtown development over the past five years has centered around two-story gas stations, being the only city in the country to demolish and not redevelop its festival marketplace, and ten-story self-storage units. We must do better.
Editorial by Mike Field. I am formerly a Southbank resident, and currently reside in San Marco.