The mayor’s office has scheduled community meetings to use $7.5 million in Community Development Block Grant funding for the “Made at the Armory Project,” which is the mixed-use renovation for the historic National Guard Armory near Downtown Jacksonville that has been at least five years in the making.
The hearings are scheduled for 3-4 p.m. March 13 and 9-10 a.m. March 20 on the eighth floor of the city’s Ed Ball Building at 214 N. Hogan St. Downtown.
The block grant funding is a Section 108 Loan Guarantee project to be a part of the 2023-24 Community Development Block Grant Duval County Entitlement funding.
The proposed project is for rehabilitating the city-owned 116-year-old Armory to serve the Eastside and Springfield communities as well as all of Duval County and beyond. It would create 228 permanent jobs and 100 construction jobs, according to the draft Section 108 loan application.
Through Armory Redevelopment Associates LLC, REVA Development Corp. of Fort Lauderdale proposes to renovate and revitalize the vacant 80,826-square-foot Armory building on 2.02 acres at 851 N. Market St.
It also wants to develop part of an adjacent parcel at 928 N. Liberty St. for apartments, but that is not part of the HUD grant.
In 2020, Armory Redevelopment Associates entered into a 40-year ground lease for the property with the city. It was amended in 2022 and now is being amended again.
Rezoning and lease legislation also is being introduced to City Council.
The city says it is applying for the HUD Section 108 loan to provide third-party funding for the project.
Armory Redevelopment Associates Leverage Lender LLC was created for the New Market Tax Credits and will be the borrower, according to the draft application.
Plans include a food hall
A public notice for the hearings says the proceeds of the funds be used to assist in the restoration of the Armory, “and most significantly for the food hall, which includes the buildout of twenty-two food stalls along with seating and storage space.”
The notice says the project will “not only create new small businesses and jobs but will also serve as a significant economic stimulus for the surrounding community.”
The application says the loan would allow Armory Redevelopment Associates to address issues that include lead-based paint, asbestos and mold remediation as well as remove and replace functionally obsolete mechanical, electrical and plumbing systems and meet other regulatory requirements.
Hearing participants can ask questions and provide opinions about the rehabilitation and services provided by the project.
The public notice says Duval County receives Community Development Block Grant funds from the U.S. Department of Housing and Urban Development as an entitlement community.
Duval County is eligible to apply for a loan guaranteed by HUD in an amount up to the equivalent of five years of its anticipated Community Development Block Grant allocations.
The funds must be used for eligible projects and to allow the county to complete costly infrastructure and facility projects.
The county must repay the loan over 20 years using part of the city’s annual Community Development Block Grant allocation.
The $7.5 million will represent about 25% of the overall development cost, the draft application shows.
According to the application, the development team comprises REVA Development Corp.; Ted Spitzer, president of Market Ventures LLC, a public markets executive; Jacksonville-based Intuition Ale Works; Miami-based Event Rhythm, an event planning service; General Provision, a coworking and event hub; and Suzanne Pickett, founder of The Art Center Cooperative.
The application says Intuition Ale Works would be the Armory’s on-site microbrewery to specialize in small-batch handcrafted ales “and aims to create quality, flavorful, and creative beers in a wide range of styles.”
The redevelopment
The application states that the city identified the Armory redevelopment project as necessary to promote community and neighborhood revitalization.
The first floor offers more than 15,000 square feet of usable space for the food hall as well as a commercial kitchen rentable to restaurants. The microbrewery also will be on the first floor as well as 4,000 square feet of coworking space.
The second floor would be rehabilitated to become event space for wedding receptions, networking and corporate events and other special occasions.
It would host catered affairs from food hall tenants and offer a capacity of 300 table seats and 500-plus stadium seats.
The second floor also would hold more than 8,300 square feet for art studios and gallery space and 4,790 square feet of coworking space for “creatives and entrepreneurs.”
The third floor would provide 5,000 square feet of coworking space and offices and a 3,200-square-foot balcony for additional seating from the food hall, entertainment and coworking open table space.
The project steps
The HUD funding appears to be a necessary element in the project, which requires rezoning and financing for the city to amend the agreements.
Among other steps in the project:
• The city wants to rezone the site to Planned Unit Development. The property is next to both the Downtown and Springfield zoning overlays.
The applicant’s agent is the Rogers Towers law firm. BDG Architects is the architect.
A rezoning would need to be approved by Council and the Planning Commission.
The city wants to change the land use from Recreation and Open Space to Community/General Commercial and rezone it from Public and Building Facilities-1, which is restricted to public services, to PUD.
There are two parcels.
The PUD written description dated July 25, 2023, explains the Armory Parcel building is proposed for renovation into a mix of live stage performance; coworking space and offices supporting small business; a food hall and microbrewery; conference and event space; arts studios and galleries; and member-driven workspace for entrepreneurs and makers.
The North Hogan Parcel, which is the North Liberty Street property north of Hogans Creek, is used by the city Parks and Recreation Department for maintenance and storage. REVA wants to redevelop part of it with rental apartments.
• The Mayors Budget Review Committee authorized the mayor to introduce an ordinance to amend the redevelopment agreement between the city and Armory Redevelopment Associates LLC and to restate the lease agreement contingent on zoning and financing for the improvements.
The MBRC voted Feb. 26 to introduce the legislation March 12. Ordinance 2024-208 is assigned to the Finance Committees and the Neighborhoods, Community Services, Public Health and Safety Committee.
The Dec. 20, 2020 agreement was amended in December 2022 by Ordinance 2020-728-E.
The legislative fact sheet dated Jan. 31, 2024, says Armory Redevelopment Associates and the city entered into a lease agreement and redevelopment agreement in 2020. A 2022 amendment extended the performance schedule.
As part of the agreement, the developer was required to rezone the property to accommodate the proposed uses. Due diligence found that there was no clear title.
It also found that there was an unopened right-of-way for Orange Street through the parking area of the property.
Both issues had to be resolved for zoning and financing.
The fact sheet said the right-of-way has been closed and title issues are being resolved through the Office of General Counsel.
OED requests that the language in the lease and redevelopment agreements be modified to extend terms for seven months and other provisions to sync the documents.
“Due to additional remedial work discovered by the Developer that will be necessary to stabilize the Armory building and the necessity of Developer obtaining financing,” the developer and the city agreed to amend the agreements to extend the dates for the approvals and financing.
The latest legislation states that supporting the project will provide for the restoration of the Armory building “and provide for the redevelopment of City-owned real property in the Springfield neighborhood, eliminate blight conditions in the area, and provide job opportunities to residents in the area.”
The legislation says the developer has been unable to apply for zoning approvals of the primary parcel because of unanticipated title issues which delayed benchmarks in the performance schedule.
The legislation says the tenant would accept the leased premises “as is” so long as it obtains a minimum of $20 million in funding commitments for improvements.
The past deals
The Armory has been in project development since 2019.
The city chose REVA based on its response to a request for proposals issued in July 2019.
REVA’s interest stems from what President and CEO Don Patterson called its location in “the doughnut hole” between Downtown, historic Springfield and Eastside.
“We want to help Downtown and the surrounding areas grow in economic vitality,” he said when the project proposals began.
Council agreed Oct. 25, 2022, to give REVA more time to start the estimated $20 million mixed-use renovation for the Armory by approving a restated and amended redevelopment agreement for REVA Development Corp.
The legislation is Ordinance 2022-0727.
According to the city Office of Economic Development, the two-phase Made at the Armory project has doubled in cost since it was first approved by Council in October 2020.
REVA told the city that it found $15 million in unanticipated remediation needs after it signed the 40-year lease agreement for the building.
Along with higher construction costs, the problems stalled what REVA initially thought would be a $3 million renovation.
Patterson said in September 2022 the problems with the building and the 2020 pandemic caused “pretty significant delays.”
“It’s an opportunity to bring an architecturally attractive building that’s been sitting vacant for years back into service and could be an economic driver and catalyst for the area,” Patterson said.
According to a previous city summary from the economic development office, the three-story building needs asbestos, lead-based paint and mold abatement; HVAC, plumbing, electrical and telecommunications replacement; fire protection and sprinkler system installation; waterproofing; re-roofing and framing; and floor rehabilitation.
The Armory building sits near Hogans Creek and has been prone to flooding.
Since determining what needs to be fixed, the summary said the developer had received letters of interest about potential funding from traditional lenders; financing through the HUD Section 108 Loan Guarantee Program; New Market Tax Credits; and Historic Tax Credits.
That legislative bill and amended agreement would keep the 40-year lease term for $1 per year with a 20-year renewal option.
The amendment increased REVA’s capital investment to $20 million and increased the company’s option to purchase the 2.02-acre property to $4.04 million from the $2.75 million appraisal in July 2019.
After the first 20 years, REVA would be required to spend $200,000 annually in maintenance and upkeep averaged over a five-year period.
REVA also still intends to buy the adjacent 2.97 acres at North Liberty Street to develop a mid-rise, 100-unit workforce housing apartment building.
That would bring the entire project to $40 million.
REVA would be required to complete the project within three years of securing the money.