JWB Real Estate Capital’s request for nearly $9 million in forgivable and deferred loans to help finance the redevelopment of two historic structures will move on to the full Downtown Investment Authority Board.
The DIA Strategic Implementation Committee voted 4-0 on Jan. 14 to support $8,706,356 for the developer’s proposal for the Florida Baptist Convention Building at 218 W. Church St. and the Old Federal Reserve Bank Building at 424 N. Hogan St.
The project is scheduled for a full DIA board vote Jan. 20. From there, it moves to City Council for final approval.
“Upon completion, this is going to be a real good thing for our Downtown core,” DIA Chair Ron Moody said. “It’s a great location. The synergy of the three buildings presented here this morning, not to mention other development close by, it’s exactly what we’re supposed to be doing.”
The money will come from the DIA’s enhanced historic incentives program — the Downtown Preservation and Revitalization Program — approved by Council in October. It is the first project to use the DIA program, designed to boost historic projects.
JWB, led by president Alex Sifakis, plans 24 studio and one-bedroom market-rate apartments for the Church Street building.
It also will house two restaurant spaces at just more than 2,000 square feet each and two retail spaces of 655 square feet and 492 square feet on the first floor and in the basement.
The Hogan Street building redevelopment plan comprises two restaurant spaces: 4,500 square feet on the first floor and 2,900 square feet in the basement.
The second and third floors of the property each will offer 4,500 square feet of event space.
Plans for the two historic buildings link the development to the adjacent Seminole Building with an outdoor courtyard. JWB Real Estate Capital owns the three structures.
The DIA staff reports show the incentives comprising forgivable loans totaling $3,370,170; Code Compliance Forgivable Loans totaling $3,325,900; and Downtown Preservation and Revitalization Program Deferred Principal Loans totaling $1,727,864.
Board members showed hesitation Jan. 14 at the city’s expected return on investment for the project — 50 cents for every $1 of taxpayer money.
Sifakis said his 10-year projection of the development’s net operating income filed with DIA shows an $81,000 return in year three and $120,000 in year four.
He’s said that makes his return on JWB’s $3.2 million capital investment 3.75% by the fourth year of operation.
Sifakis added that JWB could invest the money in other areas of Jacksonville for a higher return.
“We’re choosing to take money we could invest at 30% and invest in Downtown at 3.75% because we believe in it,” he said. “We think in the long term it’s going to be successful and we want to be a part of that revitalization.”
The forgivable loans would amortize concurrently with principal forgiveness at the rate of 20% annually over a five-year period.
The deferred principal loans are interest-only with the rate established at the level of the 10-year Treasury note at the time of funding.
According to DIA Director of Downtown Development Steve Kelley, JWB is required to begin construction within six months of executing the redevelopment agreement and complete the work within two years.
Kelley said JWB entered into an agreement to forgive two $1.4 million municipal liens on the Church Street property.
Vista Brooklyn
The committee voted 4-0 in favor of a 10-year, $1,556,000 Recapture Enhanced Value Grant for the Vista Brooklyn Apartments at 200 Riverside Ave.
The developer, HP-DBG 200 Riverside LLC, comprising Hallmark Partners and Bristol Development Group, told the DIA that the additional grant will mitigate the negative effect on retail because of the COVID-19 pandemic.
If approved by the DIA board, the REV grant would amend the city’s 2017 economic development agreement for the 308-unit midrise apartment building.
DIA CEO Lori Boyer said retail losses from COVID-19 are pushing staff to consider a new retail incentive in 2021 to keep developers interested in retail as the market recovers.
She said the REV grant requested by HP-DBG could be a model for that.
The project includes a wellness studio and fitness center on the first floor, a latte lounge on the second floor, an indoor-outdoor pet spa on the eighth floor, and a rooftop swimming pool and club area with a beer garden and gaming areas on the 10th floor.
Also in the design is nearly 13,000 square feet of retail space fronting Riverside Avenue.
The original agreement requires HP-DBG to build no fewer than 295 residential units and not less than 12,750 square feet of retail space, supported in part by a $9 million, 20-year REV Grant authorized by Ordinance 2017-0101-E.
Associate Editor Max Marbut contributed to this report
