News Article | 6/9/2010

What’s next for Cecil Commerce Center after Hillwood approval


After winning the hard-fought battle to be master developer of Cecil Commerce Center, Hillwood faces a tall order in translating that political success to where it counts on the ground — construction of industrial buildings.


Hillwood, a Dallas-based company that is among nation’s largest industrial developers, will be in charge of bringing businesses to land where the city attracted just two companies in the past 11 years.


“We’ve got to deliver on our promises now,” Preston Herold, vice president of Hillwood Investment Properties, said after City Council approved the master development agreement Tuesday night.


Herold said Hillwood has talked with a couple of businesses about locating at Cecil Commerce Center. He said Hillwood wanted to get the master development approved before moving ahead with those discussions.


“That will be job number one — getting back to those folks,” he said.


Herold will move to Jacksonville to lead Hillwood’s marketing of the commerce center. He said Hillwood will set up its office in a former Navy building at the commerce center. The city and the Jacksonville Aviation Authority obtained thousands of acres of land from the federal government in 1999 after the Navy base closed.


One change that will take effect immediately when Hillwood takes over as master developer is real estate brokers will be able to earn fees when their clients decide to locate at the commerce center. The city hasn’t paid broker fees, but brokers will have a financial incentive to have their clients consider Cecil when Hillwood is on board.


The master development agreement with Hillwood can run for up to 25 years, but it establishes a series of benchmarks for development that Hillwood must meet along the way or else it will lose the contract. Those requirements are based on the square footage of construction.


Within three years, Hillwood must construct a 400,000 square foot building, regardless of whether Hillwood has tenants for the building or not.


In 10 years, it must have built 2 million square feet, and by the end of 20 years, the total tally must be at least 7 million square feet.


Since 1999, the city has struck two deals at the commerce center by selling land for the 1 million square foot Bridgestone Americas Tire Operation center and the 235,000 square foot Saft high-tech battery manufacturing plant.


City Councilman Daniel Davis, whose Westside district includes the commerce center, said he isn’t expecting Hillwood to come roaring out of the gate.


“We all know what kind of economic environment we’re in,” he said.


But he said he’s confident that Hillwood’s connections with industrial businesses will result in tenants and jobs coming as they building are built.


“I’m measuring success as consistent takedown of lots and consistent new job creation at Cecil,” he said.


The City Council voted 16-0 Tuesday to make Hillwood the center’s master developer. The unanimous support capped a year of negotiations that started last summer when the city tapped Hillwood as the top-ranked applicant for the role of master developer.


Despite opposition that came mainly from businesses doing industrial development in Jacksonville, council members have said the commerce center needs a master developer and Hillwood has a track record of success.


“We’re looking forward to them getting busy out there,” Councilman Ronnie Fussell said Tuesday night.


The master developer contract will cover as many as 2,800 acres. As Hillwood attracts businesses, the company will purchase tracts of land from the city for construction of distribution centers and warehouses.


Hillwood will call its project Alliance Florida, the same “premier brand” the company affixed to its Alliance Texas and Alliance California mega-developments. Alliance California is at a former Air Force base in San Bernardino.


Opponents of the contract argued the negotiations between Hillwood and the Jacksonville Economic Development Commission resulted in the city agreeing to sell land on the cheap.


Though some council members said the price would probably be higher if the city were just selling land in a straight land deal, they said the price is part of a much larger agreement that requires Hillwood to develop the center or lose its right to the contract.


Mayor John Peyton has supported making Hillwood the master developer, saying the city cannot afford to maintain the “status quo” at the commerce center.


Hillwood will be the master developer of city-owned land at the center. The Jacksonville Aviation Authority’s land is not covered by the contract.