Jackson’s Old Capitol Green District seems to make it to the starting line only to stall there.
A recession that won’t go away as well as the massive scope and costs have created doubts the district will be transformed into a $1.1-billion mix-use community anytime soon.
But a key executive of Full Spectrum of New York’s development team insists financing is close to “99 percent” complete and work could begin by late summer on a multi-story parking garage. Turning dirt for the garage would mark the start of Full Spectrum’s $129-million portion of development in the Old Capitol Green district, a 14-block expanse of warehouses and industrial buildings targeted for transformation into a “sustainable” mixed-use community of shops, hotels, apartments and office buildings.
Full Spectrum’s initial phase of the ambitious multi-property project born in the real estate boom five years ago consists of the parking garage and a pair of buildings atop it, one a 10-story office tower and the other an eight-story retail-residential building. The garage and buildings will be situated a block south of Hal & Mal’s restaurant and lounge, 200 Commerce Street.
Full Spectrum says construction of the buildings would begin once the garage is about 80 percent complete. Getting to that point in the garage work should take about nine months, he said.
Ground contamination for diesel fuel must be cleared from the site, but Full Spectrum believes it can start work on the garage and remove the contaminated soil at the same time, said Malcolm Shepherd, development director for Full Spectrum South, the Jackson arm of the New York-based development company.
Getting permission to mitigate the ground contamination of the 3.5-acre site simultaneous with the start of construction of the 800-space garage is the largest uncertainty at the moment, Shepherd indicated.
“We’re probably 99 percent complete with our financing,” he said. Loan sources have been “maintained throughout the recession. They believe the activity is there,” he added.
Lenders are convinced that demand is strong and getting stronger for downtown Jackson residences across all price levels, according to Shepherd.
“You’ve still got more people wanting to move downtown,” he said.
Despite a 25 percent vacancy rate for downtown office space, Full Spectrum expects it can fill the 180,000 square feet that it will seek to lease at its 10-story office building, Shepherd added. “All of our marketing studies have been completed. So we know the office space is needed and the residential space is needed. And there is always an opportunity for retail.”
Full Spectrum’s retail component will be concentrated in a 30,000-foot space on the ground floor of the seven-story residential building.
Full Spectrum expects to spend $28.3 million on the garage and a 1,200-ton water chiller plant that will help provide energy-efficient air conditioning to the two structures and new developments beyond the initial buildings.
Mixed-use is at the heart of Old Capitol Green’s strategy for success, according to Shepherd.
Referring to Jackson in general, Shepherd said, “Our problem is that we’ve always had divisions among things, such as downtown is the central business district for offices and businesses. We always did things in zones.
“Now we know better,” he said, insisting that mixed-use makes the building more useful for a longer period of time. Further, the owner can always convert more of the building to whatever use may be working better at a given time, he noted.
“It gives the owner the option to adjust to their market.”
United for Change
In initiating its plans for redevelopment the multi-block Capitol Green District south of the Old Capitol building, Full Spectrum enlisted 48 property owners to join the effort. They designated Full Spectrum the master developer and handed the real estate firm authority to establish design guidelines and a zoning overlay for the entire district.
The zoning in place allows conversion of warehouse space into loft apartment buildings as well as conversion of buildings to ground-floor retail and upper floors of office and residential.
“We’re hoping to alter the skyline and we’re hoping the other property owners will alter the skyline with their developments,” Shepherd said.
An emphasis will be placed throughout the district on green, sustainable building, he said. “The costs of those technologies have come down. We’ll lose less energy. The people will be healthier.”
New water and sewer lines top the list, he said. The city installed the Commerce Street waterline in 1898 and sewer line in 1909, Shepherd added.
The city has committed to the design of the utilities lines. Shepherd said he is hoping that “once we’re moving dirt they’re going to say, ‘We need to go ahead and make this happen now.’”
Until now, the aged infrastructure has kept private investors “from wanting to risk millions of dollars on a new building,” Shepherd said.
That should change once the city clearly signals it will make good on its commitment, he said.
An Appealing Mix
An encouraging confluence is underway, according to Shepherd. He sees the soon-to-open Farish Street entertainment district adding greatly to the appeal of Old Capitol Green. “Once Farish Street is done and our project is up, we’re going to see a new vitality,” he said. “A new lifestyle is developing in downtown Jackson where we can live, work and play in a single place.”
And retailers, restaurateurs and hoteliers should be more willing to invest in the Old Capitol Green District now that the state has committed to building a $38-million pair of museums on North Street — the Mississippi History Museum and a civil rights museum, Shepherd said.
“We’re talking about local tourists and people from all over the State of Mississippi,” he added.
With all the projects falling in place around the same time, lenders will see a revitalization they cannot pass up, he said.
“They will be saying, ‘Wait a minute – there are some opportunities here.’”
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