Path cleared for new Downtown HQ, but JEA can still opt out

Jacksonville, FL — The final roadblocks to a new JEA Downtown headquarters were overcome Tuesday, as JEA’s Board of Directors approved the lease agreement with Ryan Companies, and the Jacksonville City Council approved the sale of the land for the project.

But there is a new question that’s now hanging over the project, as JEA carries out its strategic planning process- will the utility follow through?

The process of putting up a new headquarters has been a long time in the making, but is needed, according to JEA. The utility says this new building will not only be a more proper size for their staff- and therefore more efficient to run- but that maintaining the current, aging facility is becoming very costly.

Ryan Companies beat several others with their proposal to build the new HQ on West Adams Street, near the Duval County Courthouse. They were formally selected by the JEA Board in April, which authorized lease negotiations to begin. Today's action by the Board approved that lease.

“When it comes to the building itself, we want to make sure that this isn’t a Ryan stamp, that it’s a JEA stamp. We don’t want to bring our design preferences, we want to make suggestions, bring in our great experience, but ultimately let JEA have the project that they want, as opposed to making sure we have a signature on a project that we developed,” says Ryan Companies’ Southeast Regional President Doug Dieck.

GALLERY:Ryan Companies' JEA HQ proposal

Speaking one-on-one with WOKV, Dieck says the lease negotiation process has been thorough, but has led to a deal that is good for both sides. He says there hasn’t been anything unexpected through that process, but they have made some changes from the initial proposal, in order to accommodate JEA’s specific needs. There have been some design changes, for example,  although the new renderings are not yet available.

Another change was adding in a contingency at JEA’s request, to let them opt out of the project overall.

JEA is currently engaged in strategic planning, as they face a future in a challenged industry that includes declining sales as a result of energy efficiencies. On Tuesday, the Board voted to move forward with planning a scenario that could include raising rates and making some big cost cuts over the next ten years, possibly including hundreds of layoffs. Another cost cutting measure that was raised was scrapping plans for a new HQ in Downtown, and instead renting some space on the Southside. That strategic planning process is still ongoing, so Dieck says they were happy to provide JEA a 90-day opt-out option to help, when JEA asked for it.

“We said, if that’s what you need, it’s no problem. So, it was a surprise, but it really was no problem, and if it helps them run their business well, it’s something we’re happy to do,” he says.

If JEA invokes the opt-out, they would have to reimburse Ryan Companies for costs incurred up to that point. Despite that question looming, Dieck says JEA wants them to keep going forward.

“What they’ve told us is full steam ahead,” he says.

The City of Jacksonville currently owns the land that Ryan Companies wants to build the new headquarters on. The Downtown Investment Authority previously recommended approving the company's proposed purchase of the land, for $2.6 million. Tuesday night, the Jacksonville City Council followed along with that, clearing the final major hurdle for this project.

There is still a 90-day due diligence period to close on the land, and information presented to the Council confirmed that if JEA opts out, there would be enough time for Ryan Companies to pull from the land deal as well. Dieck says if they do happen to close on the land early, and then JEA opts out, JEA would be responsible for reimbursing Ryan Companies for the cost of the land purchase.

Dieck says Ryan Companies expects to be able to get shovels in the ground in the first quarter of 2020, with construction completed in the final quarter of 2021. The building would house close to 800 employees under the current design, and Dieck wants to make sure they have the best work environment possible.

“I want them [JEA employees] to be thinking ‘Wow, incredible, I can’t wait to engage, let’s get going, what a great place to work’,” Dieck says.

JEA says they do not believe they will have to increase customer rates in order to fund this project. During Tuesday's Board meeting, JEA said they are not forecasting a rate hike through the next fiscal year at all.