Police Memorial Building nears end as headquarters for Sheriff's Office in future plans.

The Florida Blue office tower that opened a half century ago as a health insurance headquarters could become the future home base of the Jacksonville Sheriff's Office.

The prospect remains in the discussion stage but is picking up speed. If the Sheriff's Office were to make the move to the Riverside Avenue office tower, it would be a sign of how the COVID-19 pandemic and remote work has impacted Jacksonville's office market by making it less costly to lease space than build something new from the ground up.

The Police Memorial Building on Bay Street has been the headquarters of the Sheriff's Office since 1977. A special City Council committee examining the future location of the Duval County jail also has been assessing what to do about the Police Memorial Building, which sits in front of the jail.

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While the plan for a new jail would be to build a campus facility outside of downtown, the City Council committee and the Sheriff's Office are examining relocation of the administrative office and other divisions in the Police Memorial Building by leasing space in an existing office building.

"Right now after COVID, there's a lot more office space available which has brought down that cost per square foot, which makes this a really good option that wasn't available five years ago compared to building all-new," Sheriff's Office Director of Police Services Larry Schmitt said.

He said the Police Memorial Building has run its course for housing the administrative side of the Sheriff's Office.

"It's been outdated for a while," he told the City Council group examining it. "It's been increasingly challenging to continue to function in that building."

The city's consideration of leasing more space from Florida Blue comes as Darnell Smith, Florida Blue North Region Market president, is serving as Mayor Donna Deegan's chief of staff.

Smith started Jan. 2 in the mayor's office and is working as an “executive on loan” with Florida Blue still paying his salary and providing benefits. Smith will work for the city full-time and he won't do any work for Florida Blue while he is chief of staff, according to the mayor's office.

City spokesman Phillip Perry has said if any potential conflicts arise while he is chief of staff, "Darnell would simply recuse himself from the discussion."

City Council member Michael Boylan, who is the chairman of the special committee examining the jail and the police administration building, said it's important that Smith is "nowhere near any of these conversations" and recuses himself from the matter.

"I don't want any appearance of this being a done deal with him in that position," Boylan said during the meeting Thursday. "I want to make sure we speak to that here as well as when we go through this process."

The Sheriff's Office already has a foothold in the Florida Blue building. City Council agreed in September to authorize a lease between the city and the Jacksonville-based insurance corporation to lease space spread over three floors of the 20-story building. The Sheriff's Office will move some of its workforce into the tower after buildout of office space finishes.

If the Sheriff's Office moved out of the Police Memorial Building, it would take about 80% of the building.

While Florida Blue has an advantage in already leasing space to the Sheriff's Office, the search won't be limited to just that building. Schmitt said the Sheriff's Office doesn't plan to do a formal request for proposals from building owners, but it will provide the details of what it needs to the city's real estate division to contact commercial brokers.

Duke Addison of Addison Commercial Real Estate told the committee he knows of two or three options in the suburbs. Schmitt said he welcomes the competition for the best site that fits the requirements.

"If we can get any better deals for what we need, we're all for it," he said.

Blue Cross and Blue Shield of Florida, known as Florida Blue, moved its headquarters to the Butler Boulevard corridor in 1997 when it opened a new complex at 4800 Deerwood Campus Parkway. The tower on Riverside Avenue continued to be used for offices related to Florida Blue but has a large amount of empty space in it.

The Duval County School Board also has discussed the possibility of leasing space from Florida Blue for the district's headquarters. The board did not reach any decisions at a workshop Wednesday.

Boylan said he supports moving the Sheriff's Office out of the Police Memorial Building to lease space.

"It gives them the opportunity to address the fact that they are busting at the seams now," he said.

He said it also avoids the cost of constructing a new administration building on top of what will be a huge cost for a new county jail. For several years, the city's capital improvement program has used an estimated cost of $244 million for building a 3,000-bed jail off Lannie Road on the Northside, a $41 million pricetag for a second 500-bed jail for short-term holding of inmates somewhere in downtown, and a new Police Memorial Building at an estimated cost of $96 million.

Boylan said the projected cost of a new jail in Pima County, Arizona, recently came in at about $850 million and it is a comparable facility to what Jacksonville is considering for its new jail.

He said moving the administration out of the Police Memorial Building also could take some pressure off the county jail by creating more space for services in it. He said it also would free up parking capacity.

This article originally appeared on Florida Times-Union: Florida Blue might lease tower to Jacksonville Sheriff's Office