Studer Community Institute

Diamonds in the rough

October 16, 2014
/ Shannon Nickinson
/ community-dashboard

The recent rejuvenation of commercial and entertainment properties along Palafox Place has put a welcomed smile on the face of downtown Pensacola. But a closer look at the broader downtown area reveals some rather gaps in that smile. Several large pieces of commercial property, many recent victims of the Great Recession, are sitting vacant and wanting for buyers. To get a sense of the current market — or lack thereof— for downtown Pensacola’s commercial property market, we’re detailing the status of some prominent, large-tract properties. Each tract has its own set of challenges, but each also has the potential, if fully developed, to create a significant number of jobs and ad valorem revenue for city and county taxing authorities. A key empty parcel in downtown is 401 W. Government St. — the Emerald Coast Utilities Authority property. The 19-acre site is the former home of the Main Street Wastewater Treatment Plant. [sidebar] ECUA PROPERTY Owners: Emerald Coast Utilities Authority. Location: 401 W. Government St. Size: 19 acres. Price: The property is listed for $9.5 million. Current status: For sale, active listing with NAI/Halford. [/sidebar] The plant was built on the waterfront in downtown Pensacola in 1937, where it remained for nearly 70 years. Hurricane Ivan crippled the plant in 2004, sending sewage into the streets and homes that surrounded the plant. That coalesced support for relocating the plant. Ground was broken for its replacement, the Central Water Reclamation Facility in Cantonment, in 2008. Demolition of the Main Street plant began in 2011. Florida Department of Environmental Protection gave clearance to the site in 2013 and it went on the market. It drew one offer from a Houston-area developer, but that deal did not materialize. Since then, it has been quiet. “We get regular inquiries on the property but none have reached the point where they would have gone to our board for formal consideration,” says Nathalie Bowers, ECUA spokeswoman. TECH PARK AND CAP’N FUN

Two other high-profile vacant properties are the Pensacola Technology Campus at Ninth Avenue and Chase Street, and the former Cap’n Fun/Seville Inn property on East Garden Street. [sidebar] SEVILLE INN/CAP’N FUN PROPERTY Owners: Jim Cronley, Tony Terhaar and Ron and Emily Hedgecock. Location: 223 E. Garden St. Size: 5 acres. Price: $1 million per acre. Current status: For sale, active listing with Neal & Company, Pensacola. [/sidebar] Contractor and commercial developer Jim Cronley, co-owner of the Cap’n Fun/Seville Inn property, said interest in the Garden Street property has increased significantly in recent months. “We’ve been talking to several companies that have expressed interest in buying smaller sections of the five-acre site,” Cronley said. “We’re talking about potential buyers who would construct commercial office space in the under 10,000 square foot range. “We are prepared to build to suit for anyone that comes to us with the right price.” Cronley said he and the other co-owners bought the property several years ago with the intent of developing it as a site for financial/banking institutions. Selling off large parcels of the Garden Street property may hinge on what happens at another large downtown property nearby. The 9.2-acre tech park may become the linchpin for the development of several large-scale downtown commercial properties.

Built in 2010 with a $2 million grant from the U.S. Economic Development Administration, the park has sat vacant since opening in August 2011. [sidebar] PENSACOLA TECHNOLOGY CAMPUS Owner: Pensacola-Escambia Development Commission. Location: Ninth Avenue at Chase Street. Size: 9.2 acres, subdivided. Price: Long-term lease, negotiable per parcel. Current status: Space Florida is moving forward with development of a $9 million, 70,000 square foot office building to house a “major aerospace parts supplier.” Space Florida’s board of directors meets this week in Orlando and is expected to select an architectural firm to begin design of the Tech Park building. [/sidebar] Earlier this year Space Florida, the state’s aerospace economic development agency, announced it would build a $9 million, 70,000 square foot building to house, among others, a “major aerospace industry parts supplier.” The funding for the project has been set aside by the state, and Scott Luth,CEO of the Pensacola Community Economic Development Association, said the project is moving forward. Space Florida’s board of directors is expected to approve the selection during a meeting in Orlando this week of an architectural firm to begin the design of the building. “When the Space Florida building gets under way I think many of these parcels in the Tech Park will go quickly,” said Justin Beck, president of Beck Property, the commercial listing broker for the tech park. GARDEN STREET, GUS’

Beck’s company also has the listing for another large downtown tract: the former Garden Street headquarters for the Escambia County School District. One of the current bright spots among the large vacant property, the 4.8-acre site is under contract with Hemmer Consulting, a major developer from the Tampa Bay area. [sidebar] VERNON MCDANIEL BUILDING Owner: Escambia County School District. Location: 215 W. Garden St. Price: $3.25 million. Size: 4.8 acres. Current status: Brokered by Beck Property; under sales contract to Hemmer Consulting of Tampa Bay area. [/sidebar] Beck said the Hemmer firm has plans for a “mixed-use” development featuring residential living and commercial office space. “We’ve got a lot of interest in that site and there’s some really exciting stuff that’s going to be happening there,” he said. Two other sites in the East Pensacola Heights neighborhood: a six-acre site on Scenic Highway across from the now-closed Angus restaurant, and the site of the former Gus’ Shuck Shack, a site where Cervantes and Scenic Highway meet. [sidebar] FORMER GUS’ SHUCK SHACK Owner: Robert Kerrigan, Pensacola. Location: 550 Scenic Highway. Size: 1.67 acres. Price: $1.3 million. Current status: Active listing with Gunther Properties. [/sidebar] The 1.67-acre Gus’ Shuck Shack site is owned by Pensacola attorney Robert Kerrigan and is zoned for high-density residential or commercial developments.

“We’ve had some interest on the property, but as of today it’s still an active listing,” said agent Fred Gunther, owner and broker of Gunther Properties. Asking price for the property, Gunther said, is $1.3 million. SCENIC HIGHWAY APARTMENTS The six-acre tract on Scenic Highway is the former site of a 130-unit apartment complex destroyed in 2004 by Hurricane Ivan. Washington, D.C. resident Barry Rupp owns the property. [sidebar] SCENIC HIGHWAY PROPERTY Owner: Barry Rupp, Washington, D.C. Location: 1020 Scenic Highway. Size: 6 acres. Price: $4 million. Current status: For sale by owner. [/sidebar] “We’ve been talking to a company specializing in developing assisted living facilities,” Rupp said. “The problem is I don’t know if I can get my money out of the property if we sold now.”

Rupp is asking $4 million for the property, but local commercial market brokers say the property’s current market value is probably more in the $3 million range. “I would sell all six acres today if someone offered me the right price,” Rupp said.

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