East San Marco has stalled again, but maybe not for long.
That means residents waiting for Publix Super Markets Inc. will need to exercise more patience.
Publix agreed more than a decade ago to anchor the corner of Hendricks Avenue and Atlantic Boulevard, which most recently planned for a more than $60 million project to include retail space and 266 apartment and townhouse units.
Developer ArchCo Residential LLC terminated its involvement just before the scheduled March 6 closing to buy the property from Regency Centers Corp.
ArchCo’s group intended to buy the land, develop the project and sell the retail space to Regency Centers, which is a national shopping-center owner.
Jacksonville-based Regency Centers intends to continue the project without ArchCo and its development partner, but details are being worked out, said spokesman Eric Davidson.
The site is at 1532 Atlantic Blvd.
“The project is still moving forward but not with ArchCo and Bluerock. We are still committed to the project,” Davidson said Thursday.
Publix still is onboard.
“We remain committed to this project and are anxious to serve the beautiful East San Marco community in a more significant manner in the near future,” spokesman Dwaine Stevens said Thursday.
Davidson said Regency Centers was deciding how to proceed. He said Regency was committed to the development of East San Marco and he knew of no changes regarding the size and scope permitted by City Council ordinances about the development.
ArchCo, based in Atlanta, and New York-based Bluerock Residential Group REIT formed BR ArchCo ESM LLC to buy the 4.3-acre site.
ArchCo Residential Regional Partner Jason Jacobson said Thursday that a combination of higher construction costs and a more uncertain interest rate environment led to the decision to terminate the deal.
“It’s not very common to go through two years of work on a project and then come to an end so suddenly,” Jacobson said.
He said the decision “wasn’t done lightly.”
“We could not get our construction costs down to the point where we needed them to be to make the deal financially feasible and on top of that, the interest rate environment was volatile post-election and the interest rate risk overall led us and our investor partner to decide they could not go forward on that basis,” he said.
Jacobson said previously that ArchCo began looking at the project in 2014 and executed a purchase-and-sale agreement in February 2015.
He said construction cost estimates increased by almost 50 percent “from where we initially thought they would be in 2014.”
“We preferred to take our losses and not go ahead and start a project that was not financially feasible,” he said.
He called East San Marco “an exciting opportunity.”
Jacobson said his group would like to find a way to stay involved and continues to talk with Regency, but “there’s nothing imminent.”
“Everybody thinks it is a great project and everybody wanted it to go forward and it just wasn’t working,” he said.
The project draws strong neighborhood interest. At the Southside Business Men’s Club on Wednesday, outgoing City Council President Lori Boyer fielded questions about the project.
She represents District 5, which includes San Marco and much of Southside.
Boyer said ArchCo backed out of the deal, saying it couldn’t make the numbers work. She didn’t rule out another attempt to develop the property.
“It’s been a good market,” she said. “It may become viable again.”
Development at the site surfaced in 2002 when it was owned by SouthTrust Bank.
In 2006, Regency Centers and The St. Joe Co. announced a mixed-use project on the site and Publix committed to lease there.
After the recession, plans continued and City Council enacted ordinances to allow apartment and commercial development.
ArchCo and Bluerock executed a purchase-and-sale agreement in 2015. The city issued building permits in late 2016, but the site remains vacant.
2002: Discussions surface for a mixed-use project, possibly with Publix, on the Hendricks Avenue and Atlantic Boulevard property owned by SouthTrust Bank.
2006: Regency Centers Corp. and The St. Joe Co. announce a mixed-use project for the site; Publix commits.
2007-08: Regency and St. Joe buy the property.
2008-09: The Great Recession stalls development projects and the effects linger.
2013: Whitehall Realty Partners joins the project as the residential partner but withdraws from the deal in 2014.
2014: Regency Centers buys out St. Joe’s interest; City Council enacts ordinances to allow apartment and commercial development on the site.
2015: ArchCo Residential LLC and Bluerock Residential Group REIT execute a purchase-and-sale agreement with Regency Centers; Whitehall Realty Partners remains involved as a local partner.
March 2016: Regency Centers announces ArchCo and Bluerock will buy the property, develop the project, and sell the retail space back to Regency. Groundbreaking expected in August.
Nov. 29, 2016: City issues a site-work permit.
Dec. 29, 2016: City issues seven building permits for the project. ArchCo says it should buy the land in January and start work in April.
January 2017: ArchCo executive predicts work will start in April with completion in two years.
March 2017: ArchCo and Bluerock terminate the deal.
June 2017: Regency Centers says it remains committed to the project.