ORLANDO-Downtown Orlando is seeing new life with thousands of new jobs and hundreds of millions worth of new projects planned or completed. Indeed, Downtown Orlando is growing more diverse as it strives for live-work-play status, but there are still sore spots for O-Town to overcome in its self-proclaimed economic renaissance.
The recovery has its roots in the newly-minted Amway Center. On Oct. 1, a $480 million, multiuse sports and events facility made its debut. Home to the Orlando Magic, the 875,000-square-foot Amway Center has put thousands of people to work and is driving revenue businesses that otherwise might have closed during the ongoing economic slump.
"We have an events center that seats about 20,000 with parking for only about 2,500 cars," Thomas Chatmon, executive director of the Downtown Development Board, tells GlobeSt.com. "That means the majority of patrons have to park off-site in the central business district and walk to the event. That's wonderful for western downtown's retail, restaurant and entertainment venues. The Amway Center has already helped decrease the retail vacancies downtown."
Chatmon admits that Downtown Orlando's biggest challenge has been driving traffic between 6 p.m. and 10 p.m. The Amway Center has helped, but the Dr. Phillips Center for the Performing Arts will be an additional boost when it is completed in 2013.
A few blocks away from the Amway Center, work has already started on the nine-acre complex that will include three theaters and accommodate Broadway productions, concerts, the symphony, opera and ballet as well as educational facilities. In its first year of operation, the Dr. Phillips Center for the Performing Arts is expected to generate 4,000 jobs and have an economic impact reaching $240 million, according to the Downtown Development Board.
"These new developments are causing people to come off the sidelines," says Tom Cook, principal of Tom Cook Commercial, which specializes in downtown Orlando commercial real estate. "We saw a good flurry of activity in the first quarter—but it didn't last. We were flat for a good six months. Now it's picked up again. Even before the Amway opening, we've been busy now for a couple of months. Time will tell if this is a sustained recovery."
Orlando is working to stimulate the downtown economy in the present, but the future holds the greater promise. As part of the renaissance, downtown development officials are planning to redevelop a large area of the urban core. Dubbed Creative Village, the district will host creative and educational businesses and organizations will converge. The development is expected to host thousands of new residents and workers accounting for $300 million-plus in wages.
Finally, the most significant component of Downtown Orlando’s revival is a $615 million commuter rail line, SunRail that will link with the nation’s first high-speed rail. This will create a transit hub for the entire state, fueling and supporting growth from Florida’s west coast to the east. Combined economic impact is $10.9 billion by 2035. The rail should be operational by 2013.
Although the retail market seems poised for improvement and the multifamily market is clearly recovering, Downtown Orlando's weakest spot is vacant office space. Office market fundamentals remained weak during the second quarter of 2010 as overall absorption was negative for the 11th consecutive quarter and leasing activity fell in comparison to the same period in 2009, according to Cushman & Wakefield. The office vacancy rate in the urban core is about 18%.
One particular sore spot is the SunTrust Center. SunTrust vacated about 200,000 square feet in 2009 in a downsizing effort that has left much of the building dark and had a negative ripple effect across downtown Orlando's office market. "There's a huge glut of space in a class A building," Cook says. "That has pushed class A prices down to B and B down to c. If that space could be backfilled that would be a great thing for the market. But I'm optimistic. This is the first time in this cycle I've seen what I feel is a believable recovery."
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