The Cawton Report: Vestcor planning project in Brooklyn
Developers want to extend affordable and workforce housing from LaVilla into neighboring Brooklyn in 2019.
A multifamily project headed by The Vestcor Companies Inc. is planned for a 1.16-acre site along Spruce Street between Jackson and Stonewall streets in Brooklyn.
The Downtown Investment Authority allocated development rights at its Wednesday board meeting to Jacksonville-based Vestcor.
“What we’re attempting to do is something very similar to Lofts at Jefferson Station where it’s a mixed-income deal,” Vestcor President Steve Moore said, referring to the company’s other LaVilla projects.
He said Vestcor has the properties under contract, although he declined to say for how much.
Moore said about half the estimated 136 units will be affordable for those earning at or below $29,400 annually, or 60 percent of the average median income.
Other units would be reserved for individuals making 80 to 140 percent of the average, capped at $69,600.
It would be Vestcor’s fourth housing development near Downtown since 2015.
The company completed the Lofts at LaVilla in 2017. The Lofts at Monroe will open in November, and the Lofts at Jefferson Station will be completed in fall 2019.
Moore said the Brooklyn project is in an early stage of development.
“We’re looking at a late summer, early fall groundbreaking in 2019,” he said.
Vestcor is seeking assistance from the Jacksonville Housing Finance Authority and the Florida Housing Finance Corp. to help subsidize the estimated $20 million to $30 million construction cost by using government-backed low-interest loan programs.
“Basically, they announce what criteria they’re looking for this year for a deal,” he said. “Then everybody competes.”
The Jacksonville Housing Finance Authority uses the Multifamily Revenue Bond Financing Program to stimulate affordable housing production by providing low-interest loans to developers.
The bonds issued by JHFA under the program usually are combined with other financing tools, like second mortgage programs, local and state grants and the Low-Income Housing Tax Credit program.
Moore said the funding helps to offset rising construction costs for multifamily housing.
“These financial tools allow us to stay within our budget and still deliver affordable and workforce housing,” Moore said.
The Jacksonville Housing Finance Authority announced it would accept applications Wednesday from Vestcor and other developers seeking to secure backing with decisions expected by fall.
If the authority chooses Vestcor’s project, it will be up to the state to approve.
The project is the latest residential complex introduced in Brooklyn and the first since Bristol Development Group and NAI Hallmark announced their 10-story Vista Brooklyn residential tower in 2017.
Vista is expected to break ground by 2019.
Block Fourteen LLC and Block Nine LLC are connected to a trio of companies: Contega Business Services LLC, North Platt LLC and Ascona LLC. They have invested more than $4.4 million in Brooklyn since 2014 and accumulated nearly 12 acres of land there.
The companies share an address and are represented by the Driver, McAfee, Hawthorne & Diebenow PLLC law firm at 1 Independent Drive, Suite 1200, in the Wells Fargo Center.
Attorney Steve Diebenow could not be reached for comment.
Jacksonville’s Finest Homes LLC is under the umbrella of JWB Real Estate Companies LLC, which invested more than $745,000 in Brooklyn through its subsidiaries since 2014.
JWB President Alex Sifakis said he couldn’t comment specifically on the project.
“A lot of other downtowns are struggling with affordable housing, but Jacksonville seems to be getting ahead of it,” Sifakis said. “It’s a good thing for Jacksonville.”
Moore said there has been tremendous response for Vestcor’s LaVilla housing developments.
“We knew there was significant demand in the Downtown area for affordable and workforce housing,” Moore said.
“I’ll have to admit, we didn’t know it was quite as strong as it has been.”
Moore said the Lofts at LaVilla, a 130-unit affordable housing community at West Bay and Lee streets, was almost 100 percent leased before it opened in December.
“Lofts at Monroe is already about 70 percent leased,” Moore said of the company’s second project scheduled to open in November.
Lofts at Monroe offers 108 units of affordable housing at North Davis and Monroe streets.
The next project for Vestcor is Lofts at Jefferson Station, a five-story development at Lee and North Jefferson streets and West Bay and Forsyth streets.
Like Vestcor’s proposed Brooklyn development, Lofts at Jefferson Station signaled a shift in the company’s housing strategy from low income to a mix of affordable and workforce housing.
Moore said he believes market-rate apartments will be next.
“We think affordable and workforce is a really strong market right now, not to say that market-rate apartments wouldn’t work, it’s just this is our focus today,” he said.
Vestcor used similar financing structures for its first LaVilla projects.
For Lofts at Jefferson Station, the Jacksonville Housing Finance Authority approved a $225,000 low-interest loan to be paid over 15 years to offset costs of the affordable housing units.
It also received a $400,000 Downtown Economic Development Fund loan from the DIA.
Vestcor received a similar financial incentive, including a $325,000 low-interest loan from the Jacksonville Housing Finance Authority, and a $350,000 loan from the DIA for Lofts at Monroe.
In 2015, a $270,000 loan from the Jacksonville Housing Finance Authority and a $270,000 loan from the Downtown Economic Development Fund helped Vestcor build the Lofts at LaVilla.