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Jacoby Development: a company with an eye on the future

As you enter Atlanta-based Jacoby Development Inc.'s (JDI) 12th-floor suite, you are immediately aware of the company's environmental focus. In its lobby, a picture hangs of a dolphin jumping out of clear blue water. Further into the lobby is an aquarium with driftwood and aquatic plants. But JDI's environmental interest does not end there.

Following its founder's interests, JDI is involved in a handful of environmentally aware development projects in several states. Nevertheless, Chairman, CEO and founder James F. Jacoby's start in real estate was not ecologically auspicious. Jacoby, a 24-year veteran of commercial real estate, initially spent six years as a leasing agent for industrial and retail buildings. It was in the early-1980s, when real estate was at a low point, that Jacoby became a developer.

"The 1980s were a heck of a time to start into development," says Jacoby. "I got my feet wet in the worst of times." But the bad times didn't slow him down.

Jacoby set up downtown development authorities and financed retail projects with tax-free bonds. His company grew from redevelopment work to developing small strip center stores, with his first, big break coming from Mauldin, S.C.-based Bi-Lo grocery stores. Bi-Lo asked Jacoby to do development for its company, which he agreed to do even though he had no money. Bi-Lo agreed to back Jacoby, and the company was on its way.

After development of the Bi-Lo grocery store, many other projects came Jacoby's way. In 1987, JDI was contacted by Bentonville, Ark.-based Wal-Mart Stores Inc. to develop several stores in the Southeast. A partnership was formed, resulting in a turning point for JDI. Today the company is Wal-Mart's "preferred" developer. JDI has developed, or is in the process of developing, Wal-Mart stores in three Georgia locations - Douglasville, 450,000 sq. ft.; Villa Rica, 150,000 sq. ft.; and Austell, 250,000 sq. ft. - and in Timonium, Md., 250,000 sq. ft. Jacoby's company has developed, owned and managed more than 30 shopping centers with more than 5 million sq. ft., many anchored by Wal-Mart stores. Now, JDI has approximately 1.2 million sq. ft. in development or under construction.

Environment takes center stage Wal-Mart was there again, when Jacoby became involved in environmental projects. When JDI built a Wal-Mart project on Hilton Head Island, S.C., an exclusive area where the community has covenants about environmental impacts, Jacoby says it was a learning experience. "I would say we got our education at the 'University of Hilton Head' when we did the Wal-Mart and Publix at Hilton Head Island," he says. "You can't see the store from the road because we left all the trees in the parking lot. It is really beautiful."

Since then, JDI has been involved in many environmental projects. In 1991, the company joined with the Robert Troutman Estate in Atlanta on Summerlin Sands, an ecoplex environment project in Fort Myers, Fla.

Located near Sanibel Island, the property includes 700 acres of wetlands and a large, undeveloped beach. From construction through completion, Summerlin Sands will promote and practice protection of the land and its ecosystems in the development of retirement housing, wellness facilities and nature trails.

In 1991, Hilburn O. Hillestad, now JDI's senior vice president of environmental science, was called in to advise Jacoby on Summerlin Sands. Hillestad had worked on Summerlin Sands in 1971 when he was a coastal and estuarine research scientist with the University of Georgia. Jacoby says he and Hillestad developed a relationship, and in 1996 Hillestad joined JDI.

"Here was an opportunity for him to come in and be part of JDI and be a developer with us," says Jacoby. "I think when Hilburn came on board was when we really started to focus on opportunities for redevelopment, rather than greenfield development." Hillestad, a certified wildlife biologist and consultant in ecological science, has more than 25 years' experience in the United States and the Caribbean.

With Hillestad on board, the company became even more involved in environmental projects. One of these projects, the 138-acre former Atlantic Steel mill in Atlanta, is one of the largest brownfield developments in the country. The former steel mill site will become a live, work and play community in metropolitan Atlanta and will include 4 million to 5 million sq. ft. of high-tech office space, 1.5 million sq. ft. of retail and entertainment space, and a 4,000- to 5,000-unit apartment complex. A hotel with up to 1,000 rooms also is planned.

A damper was put on the Atlantic Steel project when a moratorium on road building, due to the city's poor air quality, threatened to halt plans for site improvements. Recently, however, JDI was given an Environmental Protection Agency Project XL designation - a program created to give companies flexibility with environmental rules if the end result is better air, water or land quality - which overrides the moratorium and allows JDI to build a bridge from the Atlantic Steel site to Midtown Atlanta. A crucial link in the project, the bridge will allow pedestrians and traffic to have access to the project from Midtown Atlanta and by way of the city's public transportation. JDI was given the exemption because the project may curtail air pollution since residents are not expected to use their vehicles as frequently.

The company's list of environmental projects is impressive. JDI is redeveloping a sand and gravel quarry in Anne Arundel County, Md., into a retirement community, a limestone quarry in Timonium, Md., into a shopping center anchored by JDI's old friend Wal-Mart, and a sand and gravel quarry in Whitemarsh, Md., into a mixed-use project. The White- marsh development will include a 65-acre General Motors plant, the first new manufacturing facility in Baltimore in more than 10 years, which will bring 430 jobs to the area.

High-tech and shrimp farming Because of the company's environmental involvement, the EPA has sent a few projects JDI's way. "It is probably worth pointing out," says Jacoby, "that with the EPA involved in Atlantic Steel and the high profile of that project, there are [other] projects coming to the company now." One of those projects is the Naval Air Station Barbers Point, Hawaii. After the Navy closed the base, the land was returned to native Hawaiians. At the EPA's suggestion, the landowners sought JDI's help with redevelopment of the base. Jacoby says this is the type of project his company likes, "where we can do high-tech, incubators [start-up companies] or live, work and play communities - where we can create."

For the high-tech component of the company, JDI engaged an information technology consultant, John Picard, president and founder of Los Angeles-based E2 Inc., who, according to JDI's chief marketing officer John P. Bevilaqua, has a tremendous national and international reputation. "Picard's fundamental purpose in his professional life is to use technology to overcome environmental problems," says Bevilaqua. "He is way beyond using recycled materials in buildings." JDI has asked Picard to make its buildings as environmentally sound as all its other projects.

JDI also has a 10-acre aquaculture farm in Plantation Key, Fla., to genetically enhance shrimp breeding for shipment to developing countries to feed the hungry. "We grow the shrimp, and when they are 24 hours old we put them in plastic bags and ship them by plane to Nicaragua, Honduras and Central and South America," says Jacoby. His interest in shrimp farming comes because of the damage trawling does to the shrimp population. "Hilburn [Hillestad] tells me shrimp should cost $100 each because of the amount of collateral damage trawling does to the environment," says Jacoby. "We can make a difference working with aquaculture."

Educating for the future But the creme de le creme of all the company's projects is Marineland in Marineland, Fla. Built in 1938, it is the oldest marine park in the world. For this redevelopment, Jacoby envisions a refuge where people can spend a week bird watching, scuba diving or learning about estuaries or marine biology - a research resort. "We want to have demonstrations so people can learn about clam and shrimp farming and about raising striped bass," says Jacoby. He says he also would like to see Marineland become a haven where organizations like the Sierra Club and National Audubon Society could meet in a natural environment.

Where JDI stands on the environment is best expressed by its leader. "We want to redevelop Marineland into an environmental experience for future generations of politicians, bankers and businessmen," says Jacoby. "We want to teach them how important the environment is and how to take care of it."

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