The Vestcor Companies Inc. landed permits for construction of Madison Palms, a 240-unit affordable apartment community at Merrill Road and Interstate 295 in Arlington.
Summit Contracting Group Inc. will build the eight three-story apartment buildings, clubhouse, mail kiosk, pavilion and other structures on 12 acres at 8300 Merrill Road.
The city issued permits Sept. 29 at a project cost of $10.71 million after a site-clearing permit Sept. 12.
Madison Palms will comprise 96 one-, 96 two- and 48 three-bedroom units that include units set aside for income levels. There are no market-rate units.
Ryan Hoover, president of Vestcor subsidiary TVC Development, said Oct. 2 that 132 units will be leased to households making 100% or less of the adjusted area median income.
That is $58,000 per year for a single person and $86,000 for a household of four.
Vestcor plans 84 units for households at or below 60% of the median income, $35,000 for one person and up to $50,000 for a family of four.
And there are 24 units for households at or below 33% of the median income, $19,000 for a single tenant and up to $27,000 for a four-person household.
The Jacksonville City Council signed off on a rezoning request Nov. 22 by Vestcor for the proposed $56.5 million project.
Council voted 14-3 to approve Ordinance 2022-0713 to rezone, with conditions, a former church property at 8300 Merrill Road to planned unit development.
The site plan by Bold Line Design filed with the legislation showed 425 surface parking spaces.
Council Vice President Ron Salem and Council members LeAnna Cumber and Joyce Morgan voted against the bill. Morgan represented Arlington and Salem lives there.
Salem and Morgan brought up an error in the Planning and Development Department staff report that said that the traffic on that segment of Merrill Road is at 63.7% capacity when it is actually at 123%.
Morgan and Salem said city code allows Council to consider the traffic impact when approving a rezoning.
Council’s rezoning vote came two weeks after it unanimously approved a $5 million, 17-year loan at 1% to help finance the project.
City officials hope the financial support and loan, which is below market interest rates, will add to Jacksonville’s limited supply of affordable housing.
Vestcor has the property under contract from Lakeview Christian Fellowship Inc., formerly Merrill Road Baptist Church and Christian Ministry Center Inc., according to Hoover.
Hoover said Oct. 2 that Vestcor expects to buy the land in November.
The Jacksonville-based multifamily housing developer’s funding model in the past decade for its affordable and workforce apartment projects, such as Lofts at LaVilla and Lofts at Jefferson Station Downtown, relies on low-income housing tax credits from the state of Florida.
For Madison Palms, Vestcor plans to secure tax credits, but the funding also includes a $25.5 million mortgage; $5 million in general partner equity; $21 million in investor equity; and the $5 million city loan, which will act as a second mortgage.
Hoover said in October 2022 the city loan is necessary because tax credit equity does not cover the same percentage of project costs as it did before the coronavirus pandemic.
“It’s difficult to get larger deals done with tax credits with (construction) costs going,” Hoover said Oct. 2.
“The city loan also enables us to make the 132 units reserved for people at or below 100% AMI which will serve a much wider range of incomes for workforce housing while still being below market,” he said.
The developer told the city that construction would begin Nov. 1, 2023, and be completed by March 1, 2025.