The owner of the historic Laura Street Trio Downtown says his company is not moving forward on a transaction with the Jacksonville Housing Authority on the multifamily element of his plan to restore and adapt the property.
SouthEast Development Group LLC Principal and Managing Director Steve Atkins said in an email April 22 he is considering other options.
His statement comes after city Downtown Investment Authority CEO Lori Boyer told the agency’s board that Atkins told her SouthEast would be securing traditional construction financing for the project.
In his email, Atkins said ending talks with the housing authority was about timing.
“After much discussion and review, JHA wanted considerably more time to develop their program and engage on the Trio project,” he said.
“While we would have liked to collaborate with JHA, we want to move forward immediately with the project. Therefore we have changed directions to proceed with other options.”
A draft term sheet signed in December by JHA President and CEO Dwayne Alexander and Atkins showed the independent city authority was considering a $10 million contribution to the project in exchange for making the Trio’s housing portion a mixed-income product.
The deal would have made SouthEast or a subsidiary the property manager through a ground lease with an initial payment by the housing authority of $10.3 million.
The government authority’s involvement would have been a significant change to the financing structure of what many city and business leaders consider a centerpiece for Downtown revitalization.
Removing the housing authority from the financing mix also would ensure the entire property remains privately owned and taxable by the city.
SouthEast and Dasher Hurst Architects have been working since 2013 to restore the historic Florida Life Insurance, Bisbee and Marble Bank buildings that comprise the Trio at northeast Laura and Forsyth streets.
SouthEast plans 166 apartments, a 141-room hotel and 14,527 square feet of retail and restaurant space, which Atkins said in January would be an estimated $165 million investment.
According to Atkins, the project received final approval from the National Park Service on March 15.
The approval was required before SouthEast could retrofit the historic components of the Trio, once an office building and bank complex, with apartments, hotel and restaurant/retail space.
The Trio is on the National Register of Historic Places, a local landmark and a contributing structure to the Downtown Jacksonville National Historic District.
SouthEast is working with Marriott Global Design and Branding to finalize the interior look of the hotel, Atkins said.
“This is required for the Autograph Collection program, as every property is unique and will have individual and distinct branding as a Four Star Autograph by Marriott product,” Atkins said.
“This will include a full service restaurant and bar as part of the hotel operations (in Marble Bank). An underground bar, wine cellar and private dining in the lower vaults and a rooftop bar on the eleventh floor of the new hotel addition overlooking the river,” he said.
“We should have additional updates on this in the near future.”
The project still needs some city approvals before SouthEast can break ground, and Boyer expects $26.67 million incentives agreement approved by City Council in September 2021 will need to be amended to support changes SouthEast made to the Trio’s design.
The Downtown Development Review Board awarded Dasher Hurst and SouthEast conceptual approval for project changes Jan. 13 that shifted some of the apartments into the historic Florida Life Insurance Building.
SouthEast will need to return to that board, which ensures new and redevelopments adhere to the city’s Downtown design standards, for final approval.
Initially, SouthEast planned to have the multifamily apartments in a later phase of the development and initially concentrate on the hotel and restaurant.
The apartments would be split between a new 12-story addition and Florida Life.
The plans show the Marriott rooms will be in the Bisbee Building and an 11-story addition.
After the DIA board meeting April 20, Boyer said the dollar amount of the city-backed incentives deal may not change but the new designs could change construction costs and require the redevelopment agreement to be amended.
That would need an OK from the DIA board and Council.
“We underwrite based on construction costs. We know that the historic building that was going to previously have hotel rooms is now going to have apartments. I imagine they’re all going to have kitchens. So, I imagine the construction costs are different,” Boyer said.
The city’s piece of the Trio’s financing included a $24.7 million forgivable and deferred principal loan package through the Downtown Preservation and Revitalization Program.
SouthEast also convinced Council members to support an additional $2 million forgivable loan to satisfy an outstanding financial lien on the property.
Atkins said SouthEast will have updates to the development scheduled “very soon.”
“Work will commence on structural remediation and stabilization of the historic buildings as the first stage,” he said.