The Downtown Investment Authority is giving developers of The District on Downtown’s Southbank a 90-day extension to obtain financing.
In a Jan. 10 letter to developer Elements of Jacksonville LLC Managing Partner Peter Rummell, DIA CEO Lori Boyer agreed to grant the proposed $600 million, mixed-use project an extension on its full performance schedule.
Boyer’s letter was in response to a written request from Rummell dated Jan. 9 for a six-month extension from the DIA. Rummell told Boyer that Elements would miss the Jan. 13 deadlines to secure The District’s $31.1 million in Community Development District bonds and bond insurance needed to pay for public infrastructure that will support the development.
In his written request, Rummell said long-term equity capital for the project has not been secured. Elements hired commercial real estate services firm Jones Lang LaSalle to run a national marketing campaign to attract investment.
“Our intent was to have this resolved months ago so that we could remain on the current timeline as outlined in our agreements with the City. However, due to the drawn-out marketing process and the fact that this is a complicated mixed-use urban project, we find ourselves in a position of not being able to meet the upcoming deadline of January 13th as outlined in the Redevelopment Agreement (RDA) with the City,” Rummell wrote.
Boyer said Elements must show “meaningful milestones” toward securing the equity capital on or before the 45th day of the extension. Specifically, Boyer would like to see a signed agreement with an investment firm or individual, even if it’s in the due diligence phase.
The development is part of a CDD managed by a five-member board. In May, the board approved a special debt assessment of $44.5 million on the property owners, which will enable the board to issue bonds and finance the infrastructure work.
The DIA approved The District’s redevelopment agreement in April 2018 that allowed the creation of the CDD as well as a Recaptured Enhanced Value grant of up to $56 million.
As part of the deal, Elements and the CDD will split The District’s public infrastructure improvement costs, including roadways, parking facilities, utilities, environmental improvements, landscaping, signs and lighting.
The city’s portion of the infrastructure improvements is a separate $23 million project that will be taken on by the same general contractor.
If Elements still needs more time, the developers could request another 90-day extension in March, the last allowed in its contract with the city.
The redevelopment agreement allows the DIA CEO to approve up to 12 months of extensions on the performance schedules if good cause can be shown. Elements was granted a six-month extension in March 2019 by DIA then-interim CEO Brian Hughes.
Rummell also told Boyer that Elements is near finalizing an agreement with a developer for The District. He did not name the firm.
“The good news is that the most competitive proposal is from an incredibly experienced and highly regarded mixed-use developer with vast experience with similar projects, including work here in Florida,” Rummell wrote. “We executed a Letter of Intent with this group and are on the verge of executing a final agreement with them.
“Given this developer’s track record of execution on complex mixed-use developments, we are very confident that The District and the City of Jacksonville will be able to continue the path forward,” he wrote.
The District’s performance timeline filed with the DIA in October also shows Jan. 13 as Elements’ deadline to file all permits for infrastructure construction.
In a phone interview Jan. 13, Boyer said her order extends the full performance schedule for 90 days, including permitting and the anticipated April 13 groundbreaking.
Boyer said the project did receive 10-set approval from the city and developers have been working on recreational park, road and other infrastructure design.
She said Elements was not in the position to apply for the building permit.
It’s not like anybody has been sitting around. There has been a ton of work done to move the project forward,” Boyer said. “It’s a delay but I wouldn’t interpret it as a major setback. It’s moving forward, just at a slower pace.”
Project engineer Kimley-Horn & Associates Inc. filed documents with the city Planning and Development Department last year that show three phases of building construction.
Phase I will comprise 200,000 square feet of office space and 94,400 square feet of enclosed commercial retail along with 250 apartments, 250 condominium units and 200 hotel rooms.
Kimley-Horn will file project descriptions later for Phases II and III.
Elements said the completed District will comprise 1,170 residential units — 770 apartments and 400 condominium units — and 288,500 total square feet of retail and the 200,000 square feet of office space.
Plans include a 125-slip marina and a riverfront park with an extension of the Southbank Riverwalk.
A land-use breakdown filed in February 2019 with The District’s mobility fee approval shows 100,000 square feet of retail will be built in Phase II and 94,100 square feet in Phase III.
Phase II will include 100 apartments and 100 condominium units, and the final 420 apartment and 50 condominium units will come online in Phase III.
There was no timeline for the construction of the buildings.
Munz and Rummell own the 32-acre site through Elements Development.