The Jacksonville City Council approved two taxpayer-backed incentives deals June 22 negotiated by the Downtown Investment Authority, including an $8.6 million package for JWB Real Estate Capital LLC’s Florida Baptist Convention Building and Old Federal Reserve Bank Building historic restoration project.
The other is a 10-year, $1.556 million Recapture Enhanced Value Grant for the Vista Brooklyn Apartments at 200 Riverside Ave.
The Council voted 16-0 to back JWB’s $18.55 million plan for the Baptist Convention building at 218 W. Church St. and the adjacent Federal Reserve building at 424 N. Hogan St.
The forgivable and deferred principal loan package is the first Council has awarded from the DIA’s Downtown Preservation and Revitalization Program.
The public investment includes a $3,596,630 historic restoration forgivable loan; a $3,299,827 code compliance forgivable loan; and a $1,727,864 deferred principal loan.
The program was designed to address what developers say are financial gaps, viability and risk in the adaptive reuse of older and designated historic buildings Downtown, according to DIA CEO Lori Boyer.
JWB plans 24 studio and one-bedroom market-rate apartments and 5,330 square feet of restaurant and retail space in the Baptist Convention building.
The company intends to build-out two restaurant spaces of 4,500 square feet on the first floor and 2,900 square feet in the basement of the Federal Reserve Building.
The second and third floors each will offer 9,000 square feet of event space.
JWB also owns the historic Seminole Building on the same block at 400 N. Hogan St. and plans to build an outdoor courtyard for restaurant seating connecting the three properties.
The DIA board recommended in January that Council approve the loans but showed some hesitation at the city’s expected return on investment for the project — 50 cents for every $1 of taxpayer money.
Sifakis said at the time that JWB’s 10-year projection of the development’s net operating income filed with DIA shows an $81,000 return in year three and $120,000 in year four.
He said that makes his return on JWB’s $3.2 million capital investment 3.75% by the fourth year of operation.
Sifakis added that JWB could invest the money in other areas of Jacksonville for a higher return.“We’re choosing to take money we could invest at 30% and invest in Downtown at 3.75% because we believe in it,” he told the DIA board.
“We think in the long term it’s going to be successful and we want to be a part of that revitalization.”
Council member Ron Salem abstained from the vote June 22 due to an investment he has related to the project.
Apartment developer HP-BDG 200 Riverside LLC, comprising Hallmark Partners and Bristol Development Group, asked the DIA for an additional REV grant capped at $1.55 million to mitigate the pandemic’s negative impact on the ground-level retail in the 308-unit apartment building.
Council approved the added tax refund 14-1 on June 22. Council member LeAnna Cumber voted against the bill.
Cumber said June 23 that the initial $9 million tax incentive from DIA also was meant to encourage mixed-use programming at Vista Brooklyn, and she noted the project went over budget.
She said it is a developer's responsibility to follow through on the terms of its redevelopment agreement with the city.
“I’m not clear why they needed an extra $1.5 million to do what they’ve already promised to do," she said.
It awarded the project a 20-year, $9 million REV grant in 2017 as part of the city-backed redevelopment agreement for the 10-story apartment building.
Ordinance 2021-0331 amends that deal.
HP-BDG is required to keep retail in at least 50% of the 12,969 square feet of ground-floor commercial space to qualify for the REV grant, according to the agreement.
Only space occupied by retailers will be eligible for the REV grant benefits, according to the legislative fact sheet filed with the bill.
NAI Hallmark is building-out 5,627 square feet of space on the ground floor to relocate its headquarters from the Southpoint area. That is about 43% of the space.
The Vista Brooklyn apartments officially opened June 8.