Bradley Sher said he isn’t a “vision” type of guy.
Yet, when he walked into Downtown’s Marble Bank Building in early September, he could see Steve Atkins’ plan for the historic space. A lively restaurant in the long dormant space.
“I fell in love,” said Sher, chief financial officer of the Molasky Group of Cos. “I could almost picture the restaurant humming with activity, a fine dining establishment.”
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After that, Sher toured the rest of the Laura Street Trio, with its plans for a Marriott hotel, bodega grocery and more.
Then he headed across Laura Street to the Barnett Bank building. He again was immediately struck by the possibilities.
“I don’t know if you can replicate that space,” he said. “It’s one of the most beautiful branches I’ve ever seen.”
A bank branch, commercial space, 110 loft units — all in a historic venue.
The plans and firsthand view were key to Molasky, a Las Vegas-based real estate development firm, feeling comfortable enough to partner with Atkins’ SouthEast Group on the almost $78 million revitalization.
“We don’t let geography get in the way,” Sher said. “It’s a great project and a great location.”
Sher called Molasky and SouthEast “true partners” for the endeavor. He said Atkins’ passion was evident when the two first talked on the phone. The business relationship began after a mutual industry acquaintance paired the two.
“It’s a great company,” Atkins recently said of Molasky. “They’ve done a ton of really large, high-profile projects.”
Additionally, Molasky has prominent experience in public-private partnerships.
The project itself is what caused the relationship to grow, though.
Both companies have construction and financing responsibilities. Of the nearly $78 million, the two firms would partner for $20 million in private equity and another $40 million through commercial loans. The remaining would be offset by about $9 million in Federal Historic Tax Credits and an $8 million ask from the city for public funding.
Molasky has done a host of government projects, including FBI centers in San Diego, Cincinnati and Minneapolis. It’s done retail like big-box strip centers. And multifamily housing in its native Nevada and California.
However, the Laura Street Trio and Barnett Bank building would be the company’s first historic redevelopment.
“It intrigued us,” said Sher. “It’s taking what once was beautiful and making it that way again. Really, with the history of these buildings, who wouldn’t?”
Sher credits Jacksonville-based Danis Building Construction for the needed expertise in historic rebuilds. The company recently completed the Jessie Ball duPont Center, formerly the Haydon Burns Library.
Such a project could springboard Molasky to pursue other historic redevelopments or pursue other work in the Jacksonville area. The company also owns a Veterans Administration building in town.
The Downtown project brings a certain level of risk for the company, though.
Sher said US Bank N.A. would only secure 50 percent of the funds needed for the project, even with the Molasky’s backing. Typically, it’s 60 percent.
That’s partially why the $8 million being asked of the city is important. It helps boost that equity, but also shows public support in such a project, he said.
And to show the city the company is engaged, it’s Molasky’s $3.1 million that’s been placed in a private trust to pay off the mortgage owed to Jacksonville Jaguars owner Shad Khan.
Atkins’ Barnett Tower LLC, which owns the buildings, and Khan’s Stache Investments had an agreement for the purchase and development of those structures two years ago.
The two sides are in a legal battle after Stache Investments foreclosed because no payments were made on the loans.
Sher said Atkins has reached out to Khan and the two sides “continue to have good dialogue” about a resolution.
However, that $3.1 million for the mortgage won’t be released until the city signs off on the project’s incentives.
There could be an opportunity for a different, more distinct type of financing to offset costs, too.
Sher is pursuing outside funding through the EB-5 Immigrant Investor Program set up by the U.S. Citizenship and Immigration Services.
The program provides foreign nationals a way to obtain a green card for investment and job creation to projects within the U.S. It was created by Congress in 1990.
To obtain such a visa for the Jacksonville project, individuals must invest $500,000 and create or preserve at least 10 jobs for U.S. workers. Downtown is considered a “targeted employment area,” which drops the needed investment from $1 million.
In addition to his role with Molasky, Sher is CEO of the EB5 Group that specializes in such projects. On its eb5groupllc.com website, a “Jacksonville Florida Downtown Marriott & Mixed-Used Center” is advertised for the program. Similar commercial projects are available in cities like Glendale, Calif., Portland, Ore., and San Diego.
Sher said the hope is to start on the Downtown project within 45 days, although he acknowledges the upcoming holiday season can slow things down.
Downtown Investment Authority CEO Aundra Wallace recently said the item won’t be on the board’s agenda next week. The authority doesn’t have $8 million to provide, either, meaning the city will have to become involved.
If it all comes to bear, Sher might be better able to see the vision when it becomes reality.
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