Invest another $400,000 to make it possible for a developer to finish a project — or face paying back $1.7 million in federal funds spent so far on the deal.
Faced with that choice, the Downtown Investment Authority on Wednesday approved a $200,000 grant from the Downtown Historic Preservation and Revitalization Trust Fund.
The grant will provide 50 percent of the gap financing needed before Clara White Mission, the developer, can secure a $1.1 million private loan to complete a veterans’ housing and service center under construction at 605 Beaver St.
The remaining $200,000 is being sought from the Northwest Jacksonville Economic Development Fund.
When complete, the project will include 16 units of affordable rental housing and 4,300 square feet of space on the ground floor to be leased by the U.S. Department of Veterans Affairs as a service center.
Ju’Coby Pittman, CEO of Clara White, said unanticipated construction issues that surfaced during the restoration of the building, designated a local historic landmark, increased the project cost from $2.1 million to $3.8 million.
The city already has invested $1.7 million from Community Development Block Grant program for acquisition, stabilization and construction.
If the project is abandoned, the grant would have to be repaid and that’s not an option, said Aundra Wallace, authority CEO.
“Jacksonville is not in a position to pay back $1.7 million,” he said.
Wallace said the project can be completed with the additional $400,000 from the city, a $550,000 grant from the Department of Veterans Affairs and a $50,000 cash investment from Clara White Mission.
With those elements in place, Synovus Bank will loan the developer $1.1 million needed to complete the project.
“No Synovus without the $400,000 from the city,” Wallace said.
Authority board member and Springfield developer Jack Meeks said historic preservation is “treacherous.” He supported providing the additional funds instead of abandoning the project and putting the city in the position of having to repay what already has been spent.
“We’re trying to get the car out of the ditch,” he said. “This is not what we typically do, but this is not a typical situation.”
Pittman said the general contractor, Acon Construction Co., has guaranteed the cost of the project will not exceed $3.8 million. If it does, she said, Acon will absorb the additional cost.
With the city funding and the Synovus loan secured, the ground floor portion of the project can be complete by Dec. 31 and the apartments about six months later, Wallace said.
In other business, the DIA also approved a $270,000 loan from the Downtown Economic Development Fund to Vestcor Inc.
The company proposes to build “Lofts at LaVilla,” a $22 million, 120-unit affordable housing development at Lee and Water streets near the Jacksonville Branch of the Federal Reserve Bank of Atlanta and the Prime Osborn Convention Center.
Vestcor plans to build affordable apartments that would be leased by Downtown workers and others whose annual salary is 80 percent or less of the state median income.
That calculates to about $49,000 or less for a family of four to qualify for the housing.
The loan, combined with another $270,000 from the Jacksonville Housing Finance Authority, represents the minimum required local government support for the project. That will allow Vestcor to apply for federal funds through the Florida Housing Finance Corp.’s Low Income Housing Tax Credit Program.
The loan approved by the authority has a 20-year term at 0 percent interest and no installment payments required.
If Vestcor ultimately does not receive the tax credit for the project, the city will not be liable for the loan.
Perhaps an indication that LaVilla will be a regular topic on the authority’s future agendas, the board approved issuing a Request for Proposals to retain a consultant for up to $100,000 that will provide a master plan for the neighborhood to guide and facilitate its redevelopment.
Wallace said LaVilla is an area that has been “studied to death,” and the authority is “looking for implementation.”
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