The Downtown Investment Authority board voted 6-0 on May 19 to back an $8.28 million incentive deal for Columbia Ventures LLC’s $60.8 million plan to convert the historic Union Terminal Warehouse to apartments.
The Atlanta-based developer wants to repurpose the 108-year-old warehouse on the edge of Jacksonville’s Downtown and Eastside neighborhoods into 228 apartments and more than 35,000 square feet of commercial space.
The incentives comprise forgivable and deferred principal loans through the city’s Downtown Preservation and Revitalization Program. The agreement needs City Council approval before Columbia is awarded the money.
Board member Jim Citrano abstained from the vote because of connections with Columbia. Members Bill Adams and Craig Gibbs were absent.
The 7.35-acre Union Terminal Warehouse parcel straddles the DIA’s boundary but remains eligible for Downtown incentive financing.
Steve Kelley, DIA director of Downtown real estate development, said May 19 that access to Hogans Creek and the proposed 30-mile Emerald Trail makes the southern edge of the property integral to the city and DIA’s development goals.
Columbia Managing Partner Dillon Baynes said the company is working with Emerald Trail project lead Groundwork Jacksonville on how the multiuse path could run through “subway” tunnels at Union Terminal once used for freight loading.
Baynes said May 19 that he and Groundwork CEO Kay Ehas think tunnels would “create a moment” on the Emerald Trail.
Because the Union Terminal building is outside of the Downtown Zoning Overlay District, DIA staff says the project design will not need Downtown Development Review Board approval.
Columbia Ventures Development Manager Ryan Akin said May 17 that the building’s National Register of Historic Places designation will require it to meet U.S. Department of Interior standards.
Before the DIA Strategic Implementation Committee’s 5-0 vote in favor of the Union Terminal deal early this week, board member Oliver Barakat said the project’s quality outweighs any concern that the property “barely sits” in the DIA boundaries.
“It is such a great historic rehab project and its size makes it important to where you couldn’t just label it as a Springfield project or an East Jacksonville project,” Barakat said.
“It’s big enough to warrant a label that it’s also a Downtown project, regardless of what the parcel does or doesn’t do.”
Council voted April 13 to designate the 330,000-square-foot Union Terminal at 700 E. Union St. a local landmark. That makes Columbia’s project eligible for the DIA program meant to fill financial gaps in historic adaptive reuse projects.
Columbia said it also received approval from the National Park Service with conditions.
The developer wanted $9.179 million from the city but it negotiated an $8.28 million deal with a:
• $4,246,963 historic restoration forgivable loan.
• $2,381,671 code compliance forgivable loan.
• $1,657,159 deferred principal loan.
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.
The loans would mean that public incentives pay for 13.6% of the overall project cost, according to the DIA.
Columbia documents 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 DIA report says rents in at least 220 apartment units will be set at or 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.
Kelley said that qualifies as workforce housing but Columbia would not be required by HUD to keep rental rates low for the long term.
Past and future
Columbia plans studio, one-, two- and three-bedroom apartments in the warehouse ranging from 582 square feet to 1,473 square feet.
The community commercial space will include makers/artists studios inside the warehouse to serve 44 tenants, the DIA report says.
Columbia representatives said, as of April, the main building is about 70% leased and occupied by creative loft spaces for artists, woodworking, makers and manufacturers, according to Columbia.
Columbia Development Manager Ryan Akin said those tenants will have to relocate during construction but Columbia wants to retain as many of the makers and artists as possible.
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.
If approved by Council, the economic development agreement would require Columbia to begin construction within six months of receiving its HUD financing.
The company wants to close on the federal mortgage by Nov. 26 and break ground by the end of the year, according to documents Columbia filed with DIA.
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.
