The Jacksonville City Council approved a $7.15 million city-backed forgivable and deferred loan package for developer Lotus Commercial USA LLC’s plan to renovate the historic former Furchgott’s Department Store into apartments and retail space.
Council voted 15-0 on Aug. 24 to approve the financial assistance for the at least $17.71 million project that would bring 40 apartments along with retail to the five-story building at Adams and Hogan streets Downtown.
Lotus Commercial CEO Soo Gilvarry said rising construction costs likely will take the final price for the renovation higher than the initial estimate used to calculate the city incentives.
She said Aug. 24 that construction contractor Danis expects final pricing in September.
“Renovating a historic building is hugely expensive. Without the city’s program, it (Furchgott’s) could sit empty for years. Lotus commercial is willing to take that risk with the city.”
City incentives paid through the Downtown Preservation and Revitalization Program would fund about 40% of the total development cost.
The city Downtown Investment Authority program is meant to preserve and put historic, vacant and underused buildings back into service.
DIA documents and Council Ordinance 2022-0572 shows the incentives in three parts:
• A $2,846,162 Historic Preservation Restoration and Rehabilitation Forgivable Loan.
• A $2,874,390 Code Compliance Renovations Forgivable Loan.
• A $1,430,138 DPRP Deferred Principal Loan.
DIA Director of Downtown Real Estate and Development Steve Kelley told the Council Finance Committee on Aug. 16 that the deferred principal loan would be repaid by the developer after 10 years.
The other $5.7 million in financing will be forgiven at 20% per year for five years after the project is complete.
Council members Joyce Morgan, Randy DeFoor, Rory Diamond and Garrett Dennis were absent for the vote.
The project includes plans for 3,872 square feet of ground-floor retail in three suites in addition to space dedicated for a fitness center, workspace and a conference room for tenant use.
Gilvarry said Lotus is working with Colliers broker Matthew Clark to fill the spaces. Kelley said Aug. 16 that the developer will not start preleasing the spaces until it closes on the remaining construction financing.
Gilvarry said that will be soon.
The redevelopment will allow the retail space to support a food and beverage business with commercial kitchen ventilation and grease traps factored into the design.
The building at 128 W. Adams St. has been home to De Real Ting Cafe for more than 20 years. Gilvarry said Aug. 24 that Lotus Commercial and the owners of the cafe have not decided if the business will remain in the building.
“We are well aware of the challenges of having the commercial units, but we’re willing to work with anyone to revitalize that corner of Hogan Street,” she said.
According to the DIA project summary, the building’s basement, currently operated by the restaurant owner as a nightclub, could have uses for the residential and commercial tenants.
“The basement level will provide caged storage, a dog washing station, and bike storage,” it says.
An amendment to the bill approved by Council says the project must have a minimum 38 residential units and 3,750 square feet of commercial space to stay in compliance with the incentives deal.
The Lotus design and construction team comprises six Jacksonville-based firms: Robbins Design Studio; Danis Construction; Keister Webb Structural Engineering; civil and landscape engineer Baker Design Build; NineOaks Development; and TLC Engineering Solutions.
The real estate law firm Driver, McAfee, Hawthorne & Diebenow represents Lotus in the project.
The Furchgott’s Department Store, built in 1941, was one of the largest remaining retailers in Downtown when it closed in 1984, according to a report by the city Planning and Development Department.
The art deco building was designed by the Jacksonville architectural firm Marsh & Saxelbye, which the report called “the most prolific” firm working in the city from 1919-46.
Council member Matt Carlucci told DIA officials he wants to ensure the city agency is recruiting service businesses like grocers and dry cleaners to sustain new Northbank residents and make the area “more livable.”
Kelley said DIA has been coordinating with real estate brokers to try and fill those commercial gaps.
“We’re making strategic efforts to identify and actively meet with brokers to help fulfill and bring some of those amenities … for our Downtown residents that bring the broad base of types of business that one would expect in their neighborhood,” Kelley said.
