Developer Theotokos Holdings qualified for a $820,000 REV grant to convert the Arlington property.
The Jacksonville City Council approved developer Theotokos Holdings LLC’s request for up to a $820,00 property tax incentive for its proposed $14.545 million apartment redevelopment of the former FBI Building in Arlington.
The Council approved Ordinance 2021-0159 in a 19-0 vote.
Theotokos Holdings wants to convert the vacant office building at 7820 Arlington Expressway into 118 market-rate housing units, according to a project summary filed with the bill.
The Recapture Enhanced Value Grant authorized by the bill will refund 75% of the projected incremental ad valorem tax increase over 10 years.
The city will require Theotokos Holdings to invest at least $11 million for demolition and construction and complete the work by Dec. 31, 2023, to get the full tax refund, according to the fact sheet.
Theotokos Holdings will receive a 50% REV grant if the investment is below $11 million, and the city will terminate the incentive if the investment is less than $9 million.
The bill waives the city’s public investment policy because the residential project will not create the minimum 10 targeted industry jobs required to qualify for a REV grant.
The building has been vacant since 2009 when the FBI relocated operations to Gate Parkway.
The 95,000-square-foot structure was built in 1975 along with two other office buildings to serve as the Westinghouse Offshore Power Systems headquarters, according to a Council legislative fact sheet.
Theotokos Holdings paid $1.2 million in September 2019 for the six-story, Class C office building.
Kozman Realty, the agent for the developer, bought the building and began interior demolition toward the conversion of it into apartments.
Marc Peter Kozman and Magdi Samuel are partners in Theotokos Holdings.
According to city Executive Director of Economic Development Kirk Wendland, the developer estimated a $10 million project when it first considered acquiring the former FBI Building.
Council member Al Ferraro had the bill pulled from the consent agenda vote April 13 to discuss the incentives before final approval.
Wendland told the Council that added materials costs from needed steel replacement in the building was the primary driver of nearly $5 million in project cost overruns and prompted the REV grant request.
“This was a way to encourage the developer to continue moving forward with that project in this very needed area of our community,” Wendland said.
Two vacant office buildings adjacent to the Theotokos Holdings site are for sale and city economic development officials hope a market-rate apartment community will spark more redevelopment in the area.
Wendland said the city declined to contribute to the project’s capital costs but offered Theotokos Holders the REV grant to help improve what the city classifies as a Level II Distressed Area of Jacksonville.
Be the first to know the latest breaking news and information that business leaders rely on in this fast-paced changing Northeast Florida economy. Regional business news, trends and statistics needed to grow your business. Key upcoming events you won’t want to miss and much more. Click Here to Grow your Business NOW!