Bill Number and Type:
Ordinance 2000-1079Sponsor: Council President at the request of the Jacksonville Economic Development Commission
Date of Introduction: October 24, 2000
Committee(s) of Reference: F, RCD, LUZ
Date of Analysis: October 27, 2000
Type of Action: Approval of redevelopment agreement; designation of historic landmarks; appropriation; approval of historic preservation tax exemption
Bill Summary: The bill approves a multi-faceted redevelopment agreement between the City and the Vestcor Companies for redevelopment of the vacant Lynch Building (11 E. Forsyth Street) and Roosevelt Hotel (Adams Street between Main and Laura Streets) into apartment buildings with associated retail space. The bill designates the two buildings as City historic landmarks. It also authorizes an appropriation from Community Development Block Grant funds of $2 million as a grant to Vestcor to purchase the Lynch Building from its current owner in Ireland. The bill also authorizes a loan by the Duval County Housing Finance in the amount of $1 million to ensure that a percentage of the units are made available at rents affordable to low-to-moderate income persons. The bill also provides that the City will borrow $12.4 million at a taxable rate of interest, will loan those funds to
Vestcor to fund the renovation of the Lynch Building, will fund the debt service on the borrowing with Downton Tax Increment District revenues, and then will deposit the loan repayments (at a subsidized interest rate) from Vestcor into a newly-created downtown development revolving loan fund. Finally, the bill approves a historic preservation ad valorem tax exemption equal to 100% of the incremental value of the renovations on both buildings for a period of 10 years.
NOTE: Nate Krestul, Executive Director of the Duval County Housing Finance Authority, will be requesting amendment of this bill in committee to remove reference to the $1 million DCHFA loan, as this component has not yet been discussed or approved by the Authority board. It will be taken up at their meeting on November 15th, and Mr. Krestul feels this particular component of the overall package would be better considered as a separate piece of legislation.
NOTE: Pending bills 2000-987 and 2000-989 designate the Lynch Building and Roosevelt Hotel, respectively, as historic landmarks. If those bills, introduced October 10th, are approved, then this bill should be amended to delete the section granting historic landmark status to the buildings.
Background Information: Vestcor Properties has a contract to purchase the two historic buildings by the end of this year and to renovate them for apartment and retail uses in two phases. Phase 1 will restore the Lynch Building (to be renamed "11 E. Forsyth") with 127 apartments and small ground-floor retail, demolish the building annex (formerly American Heritage Life's print shop) and construct a parking garage on the Adams Street side of the property. The second phase will renovate the Roosevelt Hotel (to be renamed "The Carlington") with 99 apartments and more retail on the ground and mezzanine levels. Private capital investment is estimated at $18.3 million for phase 1 and $12.8 million for phase 2.
The incentive package calls for the City to provide a conduit loan for phase 1 construction by borrowing $12.4 million at a taxable rate (currently 7 - 7.5%) and loaning the proceeds to Vestcor at 3.6% interest. Debt service on the City's borrowing would be paid by Downtown tax increment district revenues, while Vestcor's loan payments to the City would be the seed money to start a new downtown development revolving loan fund. The City's loan to Vestcor would be secured by a first mortgage on both buildings and by the personal guarantee of Vestcor principal John Rood. The interest subsidy is estimated to total approximately $4.7 million over 20 years.
The package also calls for the City to provide a CDBG grant of $2 million to purchase the Roosevelt Hotel building, which will be held for phase 2 development which must begin within 2 years of occupancy of the 11 E. Forsyth building. If rehabilitation does not begin within that period, the Vestcor must convey the building to the City. The current owner of the buildings will only sell the two together, not separately.
Finally, the package calls for the City to provide historic preservation ad valorem tax rebates to the two buildings (100% of the City taxes on the incremental value of the renovations for 10 years), estimated to be $402,000 total.
The DDA and JEDC have reviewed and recommend approval of the redevelopment agreement and incentive package.
Policy Impact Area: Downtown residential development; vacant office building renovation
Fiscal Impact: Provides for a CDBG grant of $2 million, an interest rate subsidy of approximately $4.7 million, and historic preservation tax credits of up to $402,000.
Analyst: Clements