Jacksonville, FL — JEA's Downtown campus needs an estimated $37 million in work to overhaul several major systems- from plumbing to fire protection and more.
After lengthy study of the options available, building a new campus has emerged as the leading recommendation for the most cost effective option for JEA's future. The JEA Board will vote on the first major step in that process Tuesday- a land swap agreement with the City of Jacksonville. The vote would specifically give JEA's CEO authority to execute the land swap, under the terms and conditions that have been set forward.
Renovating the current building and rebuilding in the current location were also considered, in addition to various sites on which to construct a new campus. Building a new campus on an Adams Street parcel currently owned by the City was deemed the best option when considering the disruption of daily operations, facility needs of JEA, location, and cost.
The City Council and Downtown Investment Authority still need to approve the agreement as well.
JEA’s Downtown campus
The Tower and Customer Center were constructed in 1962 and purchased by JEA in 1989 for $8 million, according to information filed with the JEA Board. Since then, JEA says there has been minimal capital investment.
JEA says their plumbing, electrical, fire protection, security, and structural systems are all due for replacement. The space is also larger than their current needs, according to the JEA documentation.
Maintaining current operations without substantial systems replacement was ruled out as an option through the study, and renovations would require multiple employee relocations. JEA further says the current floor plan is inefficient, and the existing parking beneath the building is a security risk. Further, the costs of moving and maintaining operations through the renovation is estimated at more than $23 million, according to the study prepared for presentation put forward in September 2016.
The land swap
JEA, the City of Jacksonville, and the Downtown Investment Authority have executed a term sheet for a land swap. JEA would vacate its current Downtown campus on Church Street- which includes the Tower and Customer Service Center- and the property would be transferred to the City. In exchange, JEA would receive a parcel east of the Duval County Courthouse, on Adams Street. JEA would build its new campus on that site.
The Adams Street parcel currently owned by the City is 1.52 acres with a land value of $1,655,275. The parcel is currently used for parking and construction trailer storage. JEA’s current Church Street parcel is 1.84 acres with a land value of $1,632,760. The land value for the JEA site does not include the buildings on the property.
If there is environmental remediation needed on the new parcel, the City and JEA will split the cost. If this cost is excessive, JEA can choose to terminate the deal.
While this is a land swap, JEA is committing to marketing to try to sell the existing Downtown campus parcel starting 180 days after they get the parcel for the new site and continuing through 180 days after JEA vacates their current site. At the time of the sale of the JEA parcel, City compensation will be based off the value of the City parcel, which will be valued either at the current assessment in the terms sheet or the 2019 market value- whichever is greater at the time.
If the Church Street campus is sold at a value higher than what the City parcel on Adams Street is worth, JEA and the City will split the net profit. If the sale is below the assessed value of the City parcel, JEA will be responsible for paying the difference.
If JEA is unable to sell its existing Church St. site, the term sheet says JEA will pay to demolish the buildings and return the parcel to street level grade. The City would take ownership of the parcel within 30 days of the completion of that work.
The new campus building or buildings- which don’t have a price tag in the land swap term sheet- will include a customer care facility, office space for roughly 750 employees, sufficient parking, and an emergency operations center. The City also agrees, under the terms sheet, to look at potentially expanding the parking garage that will be built on the new campus to also use for City employee parking.
Construction would be completed around the end of 2020, according to documentation going before the JEA Board.