Just over a year ago, developer Steve Atkins said he was ready.
He said he had commitments for $70 million to revitalize the historic Laura Street Trio and Barnett Bank building. He just needed $7.7 million from the city to get started.
No work ever began.
Now, Atkins said he’s again ready to move forward.
He sent Downtown Investment Authority CEO Aundra Wallace a letter last week with term sheets for the private financing, which includes the purchase of Federal Historic Tax Credits.
Atkins’ SouthEast Group is partnering with the Las Vegas-based Molasky Group of Cos. for what Atkins said is close to a $78 million project.
But, Atkins said, he needs $8 million from the city.
That public money, plus more than $9 million in tax credits, leaves the project needing $60 million. Of that, private equity would be $20 million from SouthEast and Molasky, with the remaining $40 million coming through a loan from a financial institution, Atkins said.
Attachments to the Wallace letter included a summary of terms and conditions for proposed financing from US Bank N.A. for the Barnett Bank building and the historic tax credits.
The bank describes it not as a commitment, but instead a description under which it would consider providing financing. Atkins said the companies have gone through the underwriting process and says it shows the private side of the deal is in place.
Kirk Wendland, the city’s Office of Economic Development director, didn’t specifically address the terms for the Laura Street/Barnett deal, but said such letters don’t represent commitments. However, they do help the city and private side continue talks about partnering on deals.
Atkins said Molasky is a “great financial partner” that’s done high-profile projects and brings significant cash equity. He said he started talking with them several months ago and “hit it off immediately.”
The company has more than 65 years in real estate development in government, retail, residential and commercial projects. Examples of its commercial work include two Bank of America plazas and Sunrise Hospital in Las Vegas, along with a Blue Cross Blue Shield of Georgia facility.
Atkins declined to go into specific of the business relationship with the company. Requests for interviews with Molasky officials last week were not granted.
A breakdown of the Barnett Bank deal calls for a project of more than $32 million — $16.6 coming from loaned funds and $16 million through private equity. For the latter, $4 million is pegged as coming from a city grant and $5.1 million through tax credits.
As for the Laura Street Trio, it’s laid out as a $44.6 million project with $22.3 million coming from both a loan and private equity. The equity includes $4 million of city money and $4.4 million in tax credits.
Plans and tenants previously announced for both buildings remain, Atkins said.
The Barnett Bank building would have a financial institution on the first two floors along with a coffee shop. Above that would be some commercial space and 110 market-rate residential units ranging from 600 to 800 square feet.
Atkins said the Marriott and “The Bullbriar” restaurant headed by Scott Schwartz, chef and owner of the 29 South Restaurant, would be in the Laura Street Trio. Additionally, a bodega-style market called Cucina Urban would be included.
Atkins said he met with Mayor Lenny Curry’s administration in mid-September to talk about the project and what was needed. He declined to say who, but said he came away encouraged by the administration’s enthusiasm.
Atkins said he hasn’t made an official request to the city for the $8 million yet, but said the “ball is in the city’s court” on the project.
Atkins’ letter to Wallace indicated he wanted the project to be presented to the DIA for review and approval “at the earliest possible opportunity.”
However, Wallace said it won’t be on the authority’s Nov. 18 agenda.
Wallace was in Oklahoma City last week as part of the JAX Chamber trip and said he forwarded the information to staff.
“I really have got to look at it myself and review what my team tells me,” he said.
Wallace said he’d look at who was guaranteeing the debt, who was in control of the project and which groups were putting up equity when it came to any ask about public money.
Through this all, though, remains a legal issue.
Atkins’ group purchased the Downtown buildings in 2013 with more than $3 million in assistance from Jacksonville Jaguars owner Shad Khan through his Stache Investments. After more than a year with no work on the project, Stache Investments began foreclosure proceedings.
Stache Investments says it hasn’t been paid anything on its loan. Barnett Towers LLC, Atkins’ entity created that owns the building, claims it wasn’t a typical loan and it wasn’t supposed to be paid back.
The disagreement continues and, unless it’s settled out of court, won’t be decided until spring.
Atkins’ letter to Wallace says $3.1 million has been set aside in a private trust at Rogers Towers to satisfy the mortgage held by Stache Investments. The release of those funds would be made immediately upon the city approving the public investments for the project.
Atkins’ wouldn’t comment on the litigation or why paying the mortgage was tied to city approving incentives.
Khan spokesman Jim Woodcock in a statement last week said he had no comment and that it was a matter before the courts.
Atkins said to expect announcements this week about the financing and other details about the project.
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