The company received two extensions to its city-backed development agreement citing Downtown “market instability” because of the pandemic.
Vestcor Companies delayed construction of its for-sale town house development in LaVilla twice this summer and the company said it is hesitant to begin the project in a Downtown market impacted by COVID-19.
Ryan Hoover, president of Vestcor subsidiary TVC Development Inc., said Sept. 2 that the company sought two extensions to its development agreement with the Downtown Investment Authority and the city to build the 88-unit town house project.
Hoover said Vestcor still plans to complete the development but won’t begin construction until the for-sale product market, which includes Downtown employees and people seeking an urban core lifestyle, returns.
“You have a lot of people who really aren’t even in Downtown now. I assume that everything will be back to some form of normal,” Hoover said.
“As long as things come back where we’re comfortable to do it (the town houses). We really worked hard on it,” he said.
“At the same time, we’re not going to sit here and delay something forever. We’re not going to hold them up. We’re not going to start construction on a for-sale product in the current market.”
DIA documents show that Vestcor President Steve Moore requested a 60-day extension to commence construction, originally scheduled June 13.
DIA CEO Lori Boyer granted Vestcor’s first extension request in a June 8 letter to Hoover based on “market instability” and concerns over the sale price and absorption rates caused by the pandemic.
The housing developer agreed to keep the base price for each town house at $250,000 in its deal with the city, which will receive 75% of any revenue Vestcor receives above the marketed price.
Boyer granted a second 60-day extension in an Aug. 10 letter, pushing Vestcor’s groundbreaking deadline to Oct. 12.
Vestcor still has one 60-day extension remaining in its deal with the city, if the company can show good cause. The developer is required to complete the project by Dec. 31, 2021, under the development agreement.
The latest data from Downtown Vision Inc. shows the extent of COVID-19’s impact on Downtown foot traffic. From Jan. 1-Sept. 14, Downtown had 8.35 million visits compared with 14.43 million during the same period in 2019, according to DVI.
“We’ve had 53% of the visits we had by this time last year,” DVI Vice President of Marketing Katherine Hardwick said in a Sept. 17 email.
The statistics exclude Downtown employees and residents.
DVI partnered with Regency Centers Corp. to use cellphone activity data Downtown to calculate the drop.
The nonprofit’s annual report showed that from March 14 through July 31, Downtown had 21,641 daily average visitors.
There’s not a high volume of for-sale residential inventory Downtown, but Boyer and DVI CEO Jake Gordon told the JAX Chamber ImpactJAX Public Policy Committee on Aug. 6 that Downtown rentable housing had a 94% occupancy rate and is seeing a high demand despite the pandemic.
Vestcor’s portfolio in LaVilla has been growing since 2017, with an early emphasis on affordable and workforce housing apartments.
The 108-unit Lofts at Monroe opened in December 2018; the 133-unit Lofts at Jefferson Station came online this year; and the 130-unit Lofts at LaVilla was Vestcor’s first project in the Downtown area.
The Jacksonville City Council signed off on the town house agreement Jan. 28 after a DIA bid process that selected Vestcor in September 2019 to acquire and develop the city-owned land.
Council agreed to sell the 3.9 acres in LaVilla to Vestcor through VC LaVilla Townhomes Ltd. for $100.
DIA valued the property at Adams, Johnson, Lee and Forsyth streets at $3.58 million.
As part of its deal, Jacksonville-based Vestcor will donate $100,000 each for the development of the LaVilla Heritage Trail and Lift Ev’ry Voice and Sing Park.
VC LaVilla Townhomes plans to build 10 three-story buildings comprising 50 town houses and four two-story buildings with 38 town houses.
The land will revert to city ownership if Vestcor doesn’t break ground.
Vestcor is working with architectural firm Group 4 Design Inc. Plans include gabled roofs on the town house units, a preference expressed by some DIA board members to reflect LaVilla’s historic shotgun-style architecture.