The City Council Finance Committee unanimously approved a bill April 6 authorizing an $820,000 Recapture Enhanced Value Grant for the proposed $14.545 million apartment redevelopment of the former FBI Building in Arlington.
Ordinance 2021-0159 heads to the full Council for a final vote April 13.
Developer Theotokos Holdings LLC wants to convert the vacant office building at 7820 Arlington Expressway into 118 market-rate housing units, according to a project summary filed with the bill.
City Office of Economic Development Executive Director Kirk Wendland told the committee April 6 that the building has been empty since 2009 when the FBI relocated operations to Gate Parkway.
The 95,000-square-foot structure was built in 1975 along with two other office buildings to serve as the Westinghouse Offshore Power Systems headquarters, according to a Council legislative fact sheet.
Theotokos Holdings paid $1.2 million in September 2019 for the six-story, Class C office building.
The REV grant is 75% of the projected incremental ad valorem tax increase over 10 years.
The city will require Theotokos Holdings to invest at least $11 million for demolition and construction and complete the work by Dec. 31, 2023, to get the full tax refund, according to the fact sheet.
Theotokos Holdings will receive a 50% REV grant if the investment is below $11 million, and the city will terminate the incentive if the investment is less than $9 million.
Wendland said the developer estimated a roughly $10 million project when it first considered acquiring the former FBI Building.
Wendland said the city declined to contribute to the project’s capital costs but offered Theotokos Holders the REV grant to help improve what the city classifies as a Level II Distressed Area of Jacksonville.
“By the time they got in and evaluated the project, plus some of the increase in construction costs, those costs are at about $14.5 million,” Wendland said. “So they asked if there was anything we could do to help facilitate this project.”
Kozman Realty, the agent for the developer, bought the building and began interior demolition toward conversion of it into apartments.
Marc Peter Kozman and Magdi Samuel are partners in Theotokos Holdings.
The bill waives the city’s public investment policy because the residential project will not create the minimum 10 targeted industry jobs required to qualify for a REV grant.
Wendland told the Finance Committee the tax inventive will help an area of the city that “could really use some investment” and observed bullet holes while visiting the property.
“You could see where there was definite evidence of gunshots,” Wendland said April 7. “There were shot-out windows in the facility and evidence that people had been on the property illegally.”
Council member Joyce Morgan, who represents Arlington, said she hopes the redevelopment will draw interest in the two other buildings.
“Because this is going to be housing for people and market (rate) housing, it’s not going to be low-income or anything that my community is frightened about,” Morgan said. “It’s a very strong, positive thing for the neighborhood.”