The Mayor’s Budget Review Committee is scheduled to consider a $24.67 million taxpayer-backed loan package for SouthEast Development Group LLC’s plans to renovate the historic Laura Street Trio Downtown.
The committee could vote July 12 on a request by Downtown Investment Authority CEO Lori Boyer to file legislation with City Council to approve the agreement, according to the meeting agenda.
SouthEast’s $70.48 million proposal would convert the vacant structures into a 145-room Marriott Autograph Hotel with a restaurant, lounge, ground-floor retail and a bodega grocery.
The Florida Life Insurance, Bisbee and Marble Bank buildings comprise the Trio at Forsyth and Laura streets.
Plans also call for an eight-story addition to complete the hotel.
A legislative fact sheet in the meeting packet says Southeast has agreed to no less than 140 hotel rooms with 86 rooms in the historic buildings. The remaining rooms would be in the addition planned for the northwest corner of the property.
The restaurant/lounge space will be 21,000 square feet in the Marble Bank building open to the public and a minimum 8,000 square feet of retail space, according to city documents.
Incentives package
The DIA board unanimously approved the incentives term sheet March 17 which includes:
• A $9.377 million five-year forgivable loan.
• A $10 million five-year forgivable code compliance loan.
• A $5.279 million deferred principal loan.
Under the agreement, the city will not transfer the loans until construction is complete.
According to documents prepared by the DIA, the city will finance 36.8% of the project. The taxpayer contribution is based on the $66.98 million portion of the project paid for by debt financing and government incentives and excludes $3.5 million in management and developer fees.
The legislative fact sheet says the $19.39 million in code compliance and historic restoration/rehabilitation loans will be forgiven at 20% per year for five years.
A clawback provision in the deal allows the city to stop repayment if SouthEast sells or refinances the Trio in that timeframe.
The developer is required to repay the $5.27 million deferred principal loan over 10 years.
The investment from SouthEast and its Minneapolis-based financing partner, Piper Sandler Companies, includes $25.76 million in debt; $9.46 million in expected Federal Historic Tax Credits; and $6.8 million in owner equity.
In the pending agreement, the city would require SouthEast to return to the DIA board should the project cost drop by more than 10%.
Biggest DIA project
The loans are the largest yet considered for a single project through the DIA’s Downtown Revitalization and Rehabilitation program.
DIA Director of Downtown Real Estate and Development Steve Kelley said in March the city will get a return of 87 cents for every $1 invested.
Council approved $8.62 million in loans June 22 for the program’s first financed project — JWB Real Estate Capital LLC’s $18.55 million renovation of the Florida Baptist Convention and Old Federal Reserve Bank buildings on Hogan and Church streets.
SouthEast Managing Director Steve Atkins also owns and led the nearly $70 million renovation of the historic Barnett National Bank building across the street from the Trio.
The projects were initially linked in one city-backed redevelopment agreement, but were split after SouthEast and its former development partner, The Molasky Group of Cos., failed to meet a construction schedule for a parking garage to serve both projects.
That parking structure will be built by VyStar Credit Union and Molasky is not involved in the Trio renovation.
Atkins first pitched the idea of the Trio renovation nearly 11 years ago.
The Trio buildings are locally and federally protected landmarks and the restoration project has been approved by the National Park Service.
The Trio buildings, built between 1902 and 1912, are historic and contributing structures to the Downtown Jacksonville National Register District.
Dasher Hurst Architects designed the project and Danis Construction is the general contractor.
