One Daytona complex inks Marriott deal, moves toward construction
DAYTONA BEACH — After nearly a year of little visible progress, the planned $812 million development across from Daytona International Speedway is reawakening with new efforts to woo big-name shops, restaurants and hotels — including a Marriott that just cemented its commitment.
New leases are being negotiated and infrastructure work could be in full swing early next year.
Officials at International Speedway Corp., which owns the vacant 190 acres where the One Daytona development will take shape, won’t publicly discuss the business names or timing with tenant agreements in progress. But they have signaled that the city’s biggest project ever is back in motion.
“We recently attended the International Council of Shopping Centers RECON trade show in Las Vegas with great success,” said Craig Neeb, an executive vice president for ISC and the company’s chief development and digital officer. “The project is seeing tremendous interest from tenants, and we have several leases currently in negotiation.”
ISC announced last week that it has locked in a contract for a 145-room, full-service boutique hotel.
“The franchise agreement with Marriott International for an exclusive Autograph Collection hotel at One Daytona has been executed,” confirmed Plato Ghinos, president of Shaner Hotels Group, which handled the Marriott deal for ISC.
That brings One Daytona’s tally of announced tenants to three. The other two are Bass Pro Shops and Cobb Theatres. Talk is wafting around town of a popular restaurant signing on for a spot in One Daytona within the next few weeks, but ISC executives won’t discuss that.
Volusia County real estate agents are also trying to work out deals for local businesses that want to grab up one of the development’s rental plots.
It could all add up to enough critical mass for the first phase of the project, which will carry an estimated $289 million price tag, to open in 2017.
When plans for the 5 million-square-foot One Daytona were unveiled in August 2013, ISC officials said they hoped to open the initial 1.1 million square feet by early 2016 in concert with the planned completion of the $400 million Speedway makeover known as Daytona Rising.
The Speedway project is on track to be complete in about seven months. But infrastructure work and construction have yet to start on One Daytona.
Until ISC has signed leases for 60-70 percent of its project site, “you probably won’t see much,” said City Commissioner Rob Gilliland, whose zone includes the project area. “Until they get tenants, things will be idle,” he said.
Daytona’s city government and the Volusia County government have each promised to give $20 million for the project’s expected $53 million bill for things such as roads, water and sewer pipes, sidewalks and retention ponds. But neither government has sent any money yet because their agreements with ISC call for the funds to be paid out in increments as permits for site work and vertical construction are issued, vertical construction gets underway and the property’s value increases between 2016 and 2046.
Both the city and county government offers for financial help come with conditions and time limits, but the city’s main deadline is still four years away and the county’s earliest deadlines start in January 2017. County Manager Jim Dinneen said he recently asked ISC CEO Lesa France Kennedy if she was interested in extending the deadlines in the county agreement, but she said she’s still comfortable with the dates, Dinneen said.
A community development district has been set up for One Daytona to handle infrastructure financing and give the project the ability to raise money for infrastructure expenses by issuing bonds and assessing fees on tenants. Because there was so little activity on the project, the community development district’s board of supervisors hadn’t met for a year when they huddled earlier this month to handle some minor budget matters and appoint ISC’s Neeb to a board term that will extend through 2018.
One Daytona’s slowdown coincided with ISC’s transition from using Jacoby Development of Atlanta as its lead development consultant to Kansas-based Legacy Development, which until recently had called itself RED Legacy.
Those keeping tabs on One Daytona’s progress have wondered if the project’s slowdown had to do with that transition, or with competition from a planned outlet mall with major retailers, 3,300-home upscale community and hotel projects.
Others have pondered whether the rent ISC is seeking for One Daytona is too high. An ISC spokeswoman said she can’t discuss rents, but Gilliland said he’s heard the asking price is in the range of $50 per square foot, which local real estate officials say would be on the high end for Daytona Beach, but not unheard of.
Gilliland said the city and county were asked to give the $40 million to keep the rent cost viable.
Bob Rand, vice president of commercial investment properties for Coldwell Banker Commercial Benchmark in Ormond Beach, said he was told ISC is asking “high $30s for small users, but it’s so fluid.”
Rand said he’s in the early stages of negotiations to try to get a spot in One Daytona for a local food and beverage business client. He said ISC officials “expressed to me it’s important to have a mix of local and national tenants.”
Tim Davis, vice president of investment sales for Charles Wayne Properties in Daytona Beach, said one of his clients is locating in a new development fronting International Speedway Boulevard just east of Mainland High School for $28 per square foot. The client originally wanted to locate in One Daytona.
“They liked the idea of going into One Daytona, but they didn’t like the indefinite wait, the higher-per-square-foot cost and the ongoing marketing fee,” Davis said.
Dinneen said it makes sense for One Daytona to seek higher rent.
“You can’t get much more prime property than that,” he said.