Preston Hollow Capital LLC received a final 90-day extension on its development agreement with the city for the $600 million Downtown Southbank mixed-use project The District.
Downtown Investment Authority CEO Lori Boyer said via email Sept. 30 that the Dallas-based investment firm plans to close by mid-December on development bonds needed to pay for infrastructure at the public site.
She anticipates construction will start between January and February.
The District needs an estimated $31.1 million in Community Development District bonds and bond insurance for streets, parking facilities, utilities, landscaping and other improvements to prepare for vertical construction.
Preston Hollow assumed a controlling stake in The District in early September from Elements Development of Jacksonville LLC.
Elements, operated by Peter Rummell and Micheal Munz, led the proposed residential, retail, hotel and office project since 2014.
The development company had a $20 million mortgage with Preston Hollow to buy The District property in July 2018 from JEA. Elements was approaching an Oct. 1 deadline to close on the bonds when it agreed to allow the Dallas investment firm to assume responsibility for the project.
Boyer’s extension gives Preston Hollow until Dec. 31 to close on the bonds.
In a Sept. 28 letter to Preston Hollow General Legal Counsel John Dinan and Managing Director Ramiro Albarran, Boyer agreed to grant the company more time because the firm committed to executing the original July 2018 agreement.
“Based on the change of controlling interests, the extensive work that has been completed to date, and your commitment to move forward with the development in accordance with the current approvals and agreements, I am hereby granting the final discretionary extension of 90 days to all performance schedule deadlines,” Boyer wrote.
She said in the letter that Preston Hollow made the extension request during a Sept. 9 meeting with DIA staff in Jacksonville.
Albarran did not immediately return a phone call for comment Oct. 1.
The Downtown Southbank development has a history of starts, stops and delays.
Former interim DIA CEO Brian Hughes, now Mayor Lenny Curry’s chief administrative officer, granted Elements a six-month extension on its city-backed agreement in March 2019.
Boyer approved Munz and Rummell’s request for another 90 days to close on the bonds in January. The Elements co-leads invoked a force majeure clause in The District agreement in March when the COVID-19 pandemic caused uncertainty in the bond market.
That halted the 90-day extension that Boyer approved from Jan. 13, but the DIA and city attorneys resumed the project’s deadlines in September.
The District’s redevelopment agreement allows a Community Development District to raise money for project bonds and awards a Recaptured Enhanced Value Grant of up to $56 million.
The city also will pay a portion of the infrastructure improvements in a separate $23 million project that includes a public park, marina and boat slips.
Munz said in a statement Sept. 4 that he and Rummell remain involved in The District as consultants.