City of Orlando Targets Growing Digital Media Industry for 67-Acre 'Creative Village' Redevelopment Project

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(ORLANDO, FL) -- As the Orlando Magic NBA team transitions to its new $500M arena in the fall, the current Magic arena and surrounding buildings will become part of a large-scale commercial re-development project called the 'Creative Village'.

The City of Orlando is now looking at conceptual ideas and master plans on how to best utilize this land asset. The City has recently started to solicit proposals from developers across the U.S. to review for potential re-development partnerships.

All developer partnership bids are due into the City by April 26, 2010. Then a review process will begin and the City review board will make final recommendations to the City Council on May 24, 2010 for its review and approval. The City is open to both public-private development partnerships as well as an out-right sale on the 67-acres site if it makes economic sense. Some local real estate analysts have said the site is worth $70 million to $90 million as it stands today.

Developers who are submitting bids to the City are required to include a redevelopment plan for a high-quality urban, mixed use, mixed income development including educational, commercial and residential uses, with an emphasis on expanding educational and creative industries in Orlando.

The Creative Village site is located just West of Interstate-4 in the northwest portion of Orlando's downtown core and is generally bounded by Hughey Avenue to the east, Florida Central Railroad rail spur to the south, Parramore Avenue to the west, and Concord Street to the north. The approximately 68-acre subject site is zoned Public/Traditional City. The future land use designation is in the process of being changed from Public/Recreational/Institution to Urban Activity Center.

The Creative Village redevelopment area is located within a Brownfield and Enterprise Zone and a Transportation Concurrency Exemption Area.

The City of Orlando has decided to call it the "Creative Village" because it intends to target a growing industry cluster in Central Florida called Digital Media.

Digital Media is a grouping of primarily high-tech companies that produce interactive media content, products, services and applications. Central Florida's Film and Entertainment Technology sector, which is a vibrant subset of digital media, has over 8,000 workers who yield over $1.4 Billion in sales (worldwide) and are paid $280 million in annual salaries - according to a 2006 study of the region by Catalytix - and a strong upward trend is predicted going forward.

According to Jud French, Executive Director of Digital Media Alliance Florida (DMAF) - the state's digital media industry association, "Having a 60-plus acre redevelopment opportunity in a city's urban core, already anchored by world-leading digital and interactive media educational institutions, convenient to transportation, and adjacent to a vibrant existing digital media community is almost a dream scenario!

"But this is not a new or sudden development. We have been laying the ground work for the Mayor's vision for several years.  I look forward to seeing Lake Dot become Lake Dot Comm!"

Some of the current anchor digital media companies and organizations located in Central Florida include major video game developers like Electronic Arts and U.S. Military-based modeling and simulation sectors that include all branches of the U.S. Military. Orlando is considered the world center of modeling and simulation by most industry organizations.

Because of Orlando's growing digital media marketplace, the need to create a centralized cluster location was born.

As Orlando Mayor Buddy Dyer stated in an interview with the Real Estate Channel, "Given our indigenous digital media cluster, we now have a unique opportunity to re-develop the current Amway Arena site into a world-class digital media community like no other City in the U.S."

The Mayor further stated, "Because we already have the University of Central Florida's Center for Emerging Media, the Florida Interactive Entertainment Academy and the House of Moves motion capture facility on-site today as anchor tenants, we are well positioned to make the Creative Village a world-class project in the years ahead."

"Metro Orlando's digital media industry is a combination of several strong industries that have been present in this region for a long time. Therefore, it is one of the fastest growing industries in this region," said Ray Gilley, president and CEO of the Metro Orlando Economic Development Commission. "Our goal for our digital media industry is 'global domination' because all of the right ingredients for success are found here - a talented workforce, great schools and a nurturing creative environment.  And with continued growing assets such as downtown Orlando's 'Creative Village', it looks like 'global domination' isn't such a far off goal."

However, one of the issues the Creative Village project will face is Orlando's commercial real estate marketplace.

Currently Orlando's commercial real estate sector is dealing with a tough economy as most cities are. According to CB Richard Ellis (Orlando, FL), Orlando's central business district (CBD) office market stats for Q1, 2010 show there are 66 office buildings totaling 7,533,639 S.F. of office space that is currently experiencing an increase of over 19.1%  vacancy rates, which has steadily risen over the last 12 months from 15.7% vacancies at this time last year. The average office rental rate currently is $23.93 per SF, dropping 10% from $25.51 per SF at this time last year.

In addition, many real estate developers today have a very difficult time financing real estate projects of this size, or any size, due to lack of credit or very restrictive lending policies by banks.

The good news here may be 'timing'.

By the time the Creative Village is built, the economy will have turned around enough to start absorbing much of this local downtown office inventory, and the demand for more office space can be met by the Creative Village office supply. The site is currently zoned to support up to an additional 1 million square feet of new commercial space that would be built in phases over a 10 year horizon.

In addition, several real estate analysts expect credit to become more available in the coming years as the commercial market becomes healthy again.
 

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'Get Googling Orlando' Update

In a related digital media matter, Orlando Mayor Buddy Dyer also shared with Real Estate Channel that the City of Orlando recently applied to be an official test city for Google's new ultra-fast broadband services. Google's new broadband service is estimated to be 100x faster than today's broadband services in many U.S. Cities.

Over 600 U.S. cities have applied to Google as of the March 26, 2010 application deadline. No word as to when Google will make its test-city selection, but Orlando does have a leg-up on most cities because the growing digital media cluster will become huge consumers of Google's ultra-fast services. Orlando's current Creative Village tenants just might be the right place to test such a venture.

 

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