The incentive is contingent on developer Vestcor securing a $17.7 million state low-income housing tax credit.
The Downtown Investment Authority voted 8-0 July 29 to approve a $625,000 development loan for The Vestcor Companies’ proposed mixed-income, multifamily renovation of the former Community Connections building Downtown.
It is the second time since Aug. 19 the board has advanced the incentive for Vestcor’s estimated $28.78 million Lofts at Cathedral project at 325-327 E. Duval St. in the Cathedral District.
The board first approved the loan last year contingent upon Vestcor winning a 9% Low Income Housing Tax Credit award from the Florida Housing Finance Corporation.
The Jacksonville Housing Finance Authority selects local projects for the tax credit but chose a competing project in the 2020 selection process, meaning Vestcor needed to start the process again.
Vestcor told DIA officials it again will apply for the low-income tax credits expected to pay for $17.7 million of the housing project, according to a staff report to the DIA board.
Board member Jim Citrano said Florida succeeds at “fairly distributing” low-income housing incentives but the market needs more inventory.
“When you can deliver a property and have it 100% preleased or near 100% … it clearly demonstrates that there is far more demand for affordable housing than there is supply,” Citrano said.
“I am more than happy to support Vestcor or any other housing developer that wants to do a project like this in our (Community Redevelopment Area),” he said.
The report states Vestcor would be awarded points in the scoring process if it secures a minimum $610,000 from local government.
According to the DIA, Vestcor plans to ask it and the city for another $400,000 through the Downtown Preservation and Revitalization Program.
DIA Director of Downtown Real Estate and Development Steve Kelley told the board July 29 that Vestcor will return to the board with a project pro forma for the $400,000 incentive request.
The board will hold a separate vote on that.
The report says Vestcor also will use $9.25 million in conventional financing.
The term sheet limits the city’s total contribution to the project to $1.025 million
Built in 1949, the Community Connections building was part of the Florence Davis YWCA. City Council awarded the building local landmark status in June 2017.
The 120-unit housing project will have studio, one- and two-bedroom units, according to the report.
The staff report says Vestcor will reserve about 18 units for tenants earning 30% of area median income; 39 units for tenants earning 60%; 27 units for tenants earning 80%; and 36 market-rate apartments.
A chart released by DIA shows monthly rents in Lofts at Cathedral will range from $343 for a studio housing tenants at 30% of the area’s median income to $1,300 per month for a two-bedroom market rate unit.
Board member Oliver Barakat supported the project and said he likes that Vestcor plans to keep the interior and exterior historic design of the former YWCA.
Barakat also said he wants the DIA to promote a balance of affordable and market-rate housing.
“If you strip out the Southbank and Brooklyn, most of what we’ve incentivized at this board has been the affordable housing,” Barakat said.
“I think we just need to be thoughtful about delivering market-based luxury as well as affordable in Downtown,” he said.
“The best Downtowns have a strong mixture of all the product types.”
Board member Carol Worsham was absent for the vote.
Vestcor’s core business in the Downtown Jacksonville market in the past five years is low- to moderate-income housing that includes the Lofts at Brooklyn, Lofts at Jefferson Station and Lofts at LaVilla multifamily developments.
Vestcor paid $1.4 million for the Community Connections building and adjacent property in September 2019 and February 2020 from Billy Goat Hill Inc., a subsidiary of the nonprofit Cathedral District-Jax Inc.
Vestcor bought the 1.25-acre property through VC Cathedral LLC, according to Duval County Clerk of Courts records.
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