When Chad Munsey and Michael Schmidt announced plans to open a barbecue restaurant on San Marco’s Kings Avenue, they were met with doubt from longtime business owners in the neighborhood.
The space, located in the former Endo Exo in San Marco and next to longtime neighborhood bar Local’s, is in an area on the margins of San Marco, a short distance from San Marco Square, which has long served as the nucleus of activity.
Kings Avenue represents the eastern border of the growing neighborhood, which is split from the Southbank by I-95 to the north and ends at River Oaks Road to the south. San Marco Boulevard, which leads to San Marco Square, is its main artery, pumping the bulk of daily traffic through. It runs into Hendricks Avenue, another main road that has seen businesses like Aardwolf and V’s Pizza setting up shop in recent years, which Kings Avenue, often seen as more of a commuter road than a destination, runs parallel to.
Since Bearded Pig debuted on the road in April, however, people are starting to change their minds. Try to park in the designated lot or the nearby parking garage and most spaces are filled. Walk into the fast casual restaurant at lunch hour, and there will likely be a line and a long search to find a seat.
Munsey said the restaurant regularly serves 500 customers per day. It’s a popular stop for the Downtown business crowd during the lunch hour, and customers from as far away as the Beaches and the Mandarin area frequently visit during nights and weekends.
“A lot of people probably thought Kings Avenue was a risky proposition because it hasn’t had a lot of commercial business, but not really retail business on it,” Munsey said. “We were thinking ahead with the 95 interchange happening at Atlantic and Kings Avenue and we’ve seen a huge increase in traffic.”
The restaurant is riding a surging tide – one that’s pushing development further out in San Marco.
“It’s been a total win-win for us,” Munsey said. “I think we’re starting to see San Marco grow from a business standpoint outside of the Square and filling in the area east and, obviously, north.”
It’s a shift that also signals more growth in the future – one that’s motivating several restaurants and bars, as well as residential and commercial developers to move into the neighborhood. Coupled with major developments on the neighborhood’s periphery – The District on the Southbank and the long-awaited East San Marco development – San Marco could likely become Jacksonville’s fastest-growing neighborhood.
Growing pains
Phyllis Waldrop, the owner of Local’s, has spent enough time in the neighborhood to have weathered its development stumbles, including massive roadwork over the years and business closures during the recession.
Since moving to Jacksonville in the early 1970s, she has started two bars, including Local’s, a place that attracts a slew of regulars after work and members of the service industry during the late night shift.
Those regulars helped it stay afloat two years ago, when road work and construction cut off access to Kings Avenue. Though construction continues, a new off-ramp from I-95 has made access easier.
“It’s been tough – but we’ve survived it,” Waldrop said.
Now, that neighborhood bar finds itself in an area that’s on the cusp of growth. Waldrop said she wants, and expects, to see that momentum carry on. She wants to see more small businesses succeed, which Bearded Pig shows can be done, and more long-in-the-works, but slow-moving developments like East San Marco get off the ground.
“There’s such an explosion right now that San Marco has to grow,” Waldrop said.
Development barriers in San Marco weren’t limited to San Marco’s environs. Upscale restaurant Taverna in San Marco Square experienced the same challenges, opening in the midst of the economic downturn and major road work.
“We had a lot of obstacles against us,” Taverna co-founder Kiley Efron said.
Since then, the climate has changed dramatically, Efron said. Restaurants and bars, including Maple Street Biscuit Company, Grape and Grain Exchange and several small boutiques, have moved in since the economy started to slowly recover in 2012.
“After the road work was done, business has grown by leaps and bounds. San Marco is really busy – I hear that a lot from a lot of the shops,” Efron said. “Overall, business has been much stronger and has continued to grow over the last seven years.”
Now, it’s just a matter of that growth extending, which Efron believes is on the horizon.
“There’s still great new businesses coming into the Square, but there’s a lot of build-up around it. People are going to start thinking there’s more to San Marco than just San Marco Square,” Efron said. “That’s really good for us and the surrounding areas.”
The scope of development increasing could mean an increase in value that extends beyond San Marco’s main drag – and, because San Marco’s demand hasn’t fallen off as significantly as other neighborhoods like Downtown or Springfield, it’s poised for sustainable growth.
That shouldn’t just interest potential retail developers – home owners, or potential buyers, could also see gains on their investment. San Marco’s home value index has increased 11.4 percent year-over-year, and was at about $279,000 in June 2016, according to data from Zillow. It’s projected to continue its steady gains in 2017, with Zillow projecting that it will hit nearly $300,000 this time next year.
High demand
San Marco has always been a popular neighborhood for retailers, and local brokers only see that growing in the coming years.
Franklin Street Managing Partner Carrie Smith said when she began working in Jacksonville in 2005, it was almost impossible to find a vacant space in San Marco for clients.
The recession saw vacancies increase, but lately, San Marco has been regaining steam.
“Now, it’s a matter of tracking what’s coming available,” Smith said. “Or getting creative and thinking outside the box.”
That doesn’t mean there isn’t room to grow. The average rental rate in San Marco is in the $20-per-square-foot range, said Prime Realty’s Matt Clark. In comparison, Riverside’s Five Points neighborhood can command rates of up to $35 per square foot. San Marco’s retail vacancy rate is sitting at 9 percent, in comparison to Riverside’s 7.1 percent. Southbank, meanwhile, is slightly lower than both neighborhoods at about 6.8 percent.
That’s a gap in rental rates between the neighborhoods could be closed with the addition of the East San Marco development, a mixed-use development that would incorporate a Publix, as well as residential and retail spaces, or The District development further east.
It won’t be the silver bullet, most brokers say, but it could be a push in the right direction in a market that’s already desirable.
“San Marco is already one of the strongest trade areas in the city,” Colliers International of Northeast Florida Executive Vice President Jason Ryals said. “It’s not going to dramatically change San Marco.”
The development could still have a noticeable “tipping point” effect, however, especially in areas that haven’t been saturated by development.
“I think it’s going to be out-of-the-box areas where tenants will start looking,” Clark said.
Combining efforts
Developer Peter Rummell is betting that his planned development on a 28.6-acre plot of JEA land on the Southbank, will be one of the pillars of San Marco’s future growth, though it’s not a part of San Marco itself.
Rummell’s project was selected by JEA after he bid $18.5 million to purchase the land in Oct. 2014. Deadlines have been pushed back a few times, but Rummell’s development group is scheduled to close on the land by the end of the year.
He compares The District’s relationship to the East San Marco project as having a “dumbbell” effect on one another.
“When all you have is one, it takes forever,” Rummell said. “But when you have both, the third comes for free.”
Rummell said the plan for The District, which will also be mixed-use, with recreational spaces like a marina and a movie theater in addition to residential and office development, is that it will dovetail with other development efforts in San Marco – both with East San Marco and otherwise.
“East San Marco is a complement,” Rummell said. “We are going to make them better and vice versa.”
When he thinks of what San Marco could be like five or 10 years down the road, he said he thinks of The District and San Marco as being inseparable – and, in many ways, indistinguishable – from each other. He said he sees developments like The District ushering in that change.
“That would be success for me,” Rummell said.
Building interest
As The District and East San Marco wait in the development queue, smaller projects could have a meaningful effect on the future of the area.
San Marco Train Station could be one of those catalysts for the area.
The long-vacant, historic building on Hendricks Avenue will soon open to the public with a rebooted 180-seat restaurant from La Nopalera owners and an upscale hair studio. A third, yet-to-be-announced tenant will, meanwhile, fill the hexagon structure adjacent to the San Marco Panera.
“All the growth is concentrated in that area. It’s the main artery of San Marco,” Tiffany Ash, principal in developer AshCo Inc., said.
Ash said she sees Hendricks and Kings Avenue reaching the same level as San Marco Square within the next few years, with the help of developments like the train station.
“It’s just a natural thing for Kings Avenue. It won’t be long,” Ash said. “I give it a couple of years.”
Two projects in San Marco Square by established restaurateurs, meanwhile, may contribute to that momentum.
Al Mansur, the entrepreneur behind the Al’s Pizza franchise and Neptune Beach’s Flying Iguana, plans to enter the market soon at a location on Atlantic Avenue. He said he also expects an explosion of growth in the next few years.
“That whole area is going to explode, as well as the corridor of Kings Avenue and Hendricks Avenue. It’s becoming a very busy and wonderful area to be near,” Mansur said.
Moxie Kitchen + Cocktails’ Tom Gray, meanwhile, is making his big return to San Marco with a new restaurant – Town Hall – in the space that was, until recently, The Grotto.
“There’s a lot of future growth coming,” Gray said. “To see what’s coming to life is an exciting thing.”
There’s just one thing on the mind of business owners in San Marco at this point: commercial, and population, density. There’s echoes of it, of course. It hasn’t, however, been realized yet.
“San Marco hasn’t had anything big or new. Avondale and Riverside have had a lot of business and a lot of investment,” Munsey said. “As a business owner, I love the idea of a Publix coming. I love the idea of more density with apartments. San Marco has lacked that.”
