Atlanta-based Columbia Ventures LLC could receive $893,883 less than requested in city incentives for a $60.8 million plan to convert the historic Union Terminal Warehouse to apartments.
The Downtown Investment Authority released a term sheet May 10 that shows its board will consider $8.28 million in forgivable and deferred principal loans for the affordable housing project through the Downtown Revitalization and Preservation Program.
In its report, DIA staff said only $52.9 million of the project costs are eligible expenses under the program, resulting in the lower incentives offer. The report says that $7.9 million comprises developer fees, expected tenant improvements and reserves.
In April, a Columbia representative said the company was negotiating for $9.2 million in gap financing to complete the 228-unit adaptive reuse project at 700 E. Union St. near Jacksonville’s Eastside.
A DIA staff report shows the developer asked for $9.179 million.
If approved by the DIA board and City Council, Columbia subsidiary East Union Holdings LLC would receive a:
• $4,246,963 historic restoration forgivable loan.
• $2,381,671 code compliance forgivable loan.
• $1,657,159 deferred principal loan.
The loans would mean that public incentives pay for 13.6% of the overall project cost, according to the DIA.
Documents sent by Columbia to the Daily Record on April 15 show 70%, or $41.21 million, of the workforce and affordable housing project would be financed with a 40-year, fixed-rate insured mortgage from the U.S. Department of Housing and Urban Development.
The DIA summary says $10.04 million would come from the developer and federal Historic Tax Credit equity, or 16.5% of the total project cost.
The documents are included in the May 17 DIA board’s Strategic Implementation Committee meeting packet.
The committee could take a first vote on the deal at that meeting.
The developer says in a report to DIA that the state Historic Preservation Office approved it for listing on the National Register of Historic Places
Columbia representatives said COVID-19 market effects required a turn from private financing to HUD-backed financing.
The DIA reports the city would see an 86 cent return for every $1 invested.
The strings
Columbia is required to invest at least $5.29 million in total equity capital to receive the incentives program’s maximum benefits with a $60.8 million project.
If the project cost drops more than 10%, the city financing package would reduce.
Columbia also must own Union Terminal for at least five years to qualify for the maximum city payout, according to the DIA.
Council voted April 13 to designate the 330,000-square-foot Union Terminal a local landmark. That makes Columbia’s project eligible for the DIA program meant to fill financial gaps in historic adaptive reuse projects.
The 7.35-acre Union Terminal Warehouse parcel straddles the DIA’s boundary, but remains eligible for financing.
Columbia said it also received approval from the National Park Service with conditions.
At least 220 apartment units will have base rents below the HUD maximum of 120% of the area’s median income, according to the DIA.
No less than half of the units will have initial rents at or below the HUD maximum for 80% of the area’s median income.
The project
Columbia plans studio, one-, two-, and three-bedroom apartments in the warehouse ranging from 582 square feet to 1,473 square feet.
The developer told DIA it would commit to at least 38,000 square feet of community commercial space and makers/artists studios inside the warehouse to serve 44 tenants, the DIA report says.
Columbia said Union Terminal also will have 4,205 square feet for a restaurant and coffee shop.
The DIA staff report said Columbia plans 292 parking spaces including 56 covered spaces.
The proposed path for Groundwork Jacksonville’s Emerald Trail runs through the site and will have access to Hogans Creek.
The developer intends to keep the water tower as a design feature on the rooftop terrace that will feature a community garden. It also plans to restore one of the industrial freight elevators inside the warehouse.
The main building now is 90% leased and occupied by creative loft spaces for artists, woodworking, makers and manufacturers, according to Columbia.
Turner Construction Co. built Union Terminal Warehouse from 1912-13. The developer says it once was the largest commercial building built in Florida.
It was vacant for a brief period in the 1970s, according to the report.
Property records show additions to the site at 640-648 E. Union St. continued through 1990.
Columbia says if it meets its Nov. 26 target to close on financing and begin construction, the rehab will be completed in summer 2023.
