INSIGHTREALTY GROUP, Inc.

Bridgestone getting Cecil discount

The JEDC offers $3 million worth of modifications after tire company encounters problems with land at Commerce Center.

By JOE LIGHT, The Times-Union
 

At first blush, it might look like Bridgestone Firestone is getting a steal. The tire manufacturer, which plans to build a distribution center at Cecil Commerce Center, now intends to buy about 67 acres of land from the city for $400,000 - nearly $3 million less than it previously agreed to.

But unexpected costs to prepare the land for industrial use skyrocketed to $7 million, according to executives from Bridgestone Firestone and the Jacksonville Economic Development Commission, making development more expensive than the land is worth.

The JEDC authorized the modifications at its meeting on Thursday, and the contract will go to the City Council for final approval.

Last June, Bridgestone Firestone North American Tire announced it would build a 1 million-square-foot distribution center at Cecil Commerce Center that would employ 250 workers and indirectly create 219 jobs. Bridgestone would invest almost $44 million in the facility, and its annual payroll would top $9.4 million.

Company officials agreed to buy 63 acres from the city for almost $3.2 million in September, but asked for six months to perform due diligence to discover any site conditions they weren't aware of.

'We can't swallow $7 million'

Those inspections revealed some pricey problems: The company found 32 acres of wetlands that will need to be filled - more than twice as much as city officials thought were there. Development will also require more than twice as much fill dirt as the city and Bridgestone thought.

The additional costs ran up to $7 million.

At the meeting, Bridgestone director of logistics Nelson Miller said he "near had heart failure," when he heard about the cost run-ups. Even with the $3 million discount, he said Bridgestone will spend $4 million more than it planned.

"We can't swallow $7 million," he said.

After the meeting JEDC executive director Ron Barton said the enormity of the city's land inventory at Cecil - which stands at more than 8,000 acres - makes it difficult to know all the problems associated with every parcel. What's more, because the city and Bridgestone spent months earning permits for the project, they couldn't move the distribution center without restarting the process. Barton said Bridgestone, which is already about three months behind schedule, was unwilling to wait.

"With time we could have found a different piece of land, but even so, we would still eventually have to mitigate this 30 acres," he said. "This is a prime piece of property that we can't leave undeveloped."

Barton said that JEDC staff would slow negotiations with other prospective tenants at Cecil to avoid similar undiscovered land issues.

City Councilman Art Graham, who is the City Council's liaison to the JEDC, said the low margins of industrial land make it understandable that the purchase price might end up so low.

"If you wanted to sell it to a developer and let him put townhouses out there, it probably has a great deal of value," he said. "After the citizens made the decision on Cecil Field, we had to get the commerce center off the ground and running. We'd lose a whole lot of momentum if we let the first project fall by the wayside."

JEDC OKs $8.6M in bonds

At Thursday's meeting, the JEDC also:

  • Approved $8.6 million in industrial revenue bonds for Lee & Cates Glass Inc. for an expanded operation that will create seven jobs. The tax-exempt financing would not affect city money.
  • Amended a lease held by Northrop Grumman at Cecil Commerce Center to free up parcels that could be used for different economic development projects.
  • Finalized changes to the Downtown Zoning Overlay. Among other changes, the new overlay would replace the Design Review Committee with a board that would have both design and planning responsibilities.

    The City Council will need to approve the overlay and the lease amendment.

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