The DIA board advanced the deal for apartments and retail in the historic former department store Downtown.
A $7.15 million city-backed forgivable and deferred loan package for Lotus Commercial USA LLC’s plan to renovate the historic former Furchgott’s Department Store into apartments and retail space is headed to City Council.
The Downtown Investment Authority board voted 7-0 on March 16 to approve the deal for the $17.71 million, 40-unit mixed-use residential and retail project at 128 W. Adams St.
Before the vote, board member Ron Moody said he expects the developer could lease the 40 units in less than a year.
“This absolutely cleans up what I consider a blighted part of our city.” Moody said.
“With the new JEA building going up very close by and some of the things that are going up, not to mention Barnett, this will be a very welcome development.”
Moody was referring to SouthEast Development Group LLC’s renovation of the historic Barnett National Bank Building at 112 W. Adams St. with apartments and commercial uses completed in 2019.
City incentives paid through the Downtown Preservation and Revitalization Program would fund about 40% of the total development cost.
According to the committee materials, the incentives would be awarded in three parts:
• A $2,846,162 Historic Preservation Restoration and Rehabilitation Forgivable Loan.
• A $2,874,390 Code Compliance Renovations Forgivable Loan.
• A $1,430,138 DPRP Deferred Principal Loan.
The deferred principal loan would be repaid by the developer.
Lotus Commercial, led by CEO Soo Gilvarry, paid $1.3 million for the five-story, 65,000-square-foot building in March 2020.
Council voted 18-0 on Oct. 26 to designate the 81-year-old Furchgott’s building a local landmark.
In its report, DIA staff said the city will receive 51 cents for every $1 of taxpayer investment in the project. The historic loan programs allow projects with city return on investment as low as 50 cents to qualify for the incentives.
Board member Oliver Barakat said enabling a local development team to restore a historic structure with mixed-use residential in the Downtown Central Core is worth the low return.
“This is the type of project we want to see, the type of developer we want to see and, therefore, are willing to accept this level of ROI because it will have some multiplier effects along this corridor,” Barakat said.
The Lotus design and construction team comprises six Jacksonville-based firms: architect Robbins Design Studio; Danis Construction; Keister Webb Structural Engineering; civil and landscape engineer Baker Design Build; NineOaks Development; and TLC Engineering Solutions.
The DIA report says the developer plans 3,872 square feet of rentable ground-floor retail in three suites in addition to space dedicated for a fitness center, workspace and a conference room for tenant use.
DIA Director of Downtown Real Estate and Development Steve Kelley told the board Lotus has been in conversations with Matthew Clark, a senior director for real estate firm Colliers, about the retail space but there are no current negotiations with prospective tenants.
Kelley said March 16 those spaces could be eligible for additional city incentives to help tenant build-out costs.
According to the project summary, the building’s basement could have uses for the residential and commercial tenants.
“The basement level will provide caged storage, a dog washing station, and bike storage,” it says.
“A large portion of the basement area will be ‘white boxed’ for future tenants which may be office or retail tenants.”
The redevelopment will allow the retail space to support a food and beverage business with commercial kitchen ventilation and grease traps factored into the design.
The building at Adams and Hogan streets has been home to De Real Ting Cafe for more than 20 years. Gilvarry said in January that Lotus Commercial and the owners of the cafe have not reached an agreement for the business to remain in the building.
The Furchgott’s Department Store, built in 1941, was one of the largest remaining retailers in Downtown when it closed in 1984, according to a report by the city Planning and Development Department.
The art deco building was designed by the Jacksonville architectural firm Marsh & Saxelbye, which the report called “the most prolific” firm working in the city from 1919-46.
The DIA could request permission from Mayor Lenny Curry’s administration to file legislation with Council to approve the loan package as early as March 30.
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!