The Jacksonville City Council has approved a city-backed $7.15 million repayable and deferred loan package for developer Lotus Commercial USA LLC’s project to renovate the historic former Furchgott department store into apartments and commercial space .
Council voted 15-0 on August 24 to approve financial assistance for the at least $17.71 million project that would bring 40 apartments as well as retail to the five-story building at Adams Street and Hogan downtown.
Lotus Commercial CEO Soo Gilvarry said rising construction costs will likely increase the final price of the renovation compared to the initial estimate used to calculate the city’s incentives.
She said Aug. 24 that construction contractor Danis expects a final price in September.
“Renovating a historic building is extremely expensive. Without the city program, it (Furchgott) could sit empty for years. Lotus commercial is ready to take this risk with the city.
Municipal incentives provided through the Downtown Preservation and Revitalization Program would fund approximately 40% of the total development cost.
The city’s Downtown Investment Authority program aims to preserve and rehabilitate historic, vacant and underutilized buildings.
The DIA documents and Board Order 2022-0572 present the incentives in three parts:
• A forgivable loan of $2,846,162 for historic preservation, restoration and rehabilitation.
• A forgivable loan of $2,874,390 for code-compliant renovations.
• A deferred principal loan from the DPRP of $1,430,138.
DIA Director of Real Estate and Downtown Development Steve Kelley told the council’s finance committee Aug. 16 that the deferred principal loan would be repaid by the developer after 10 years.
The remaining $5.7 million in funding will be canceled at 20% per year for five years after project completion.
Council members Joyce Morgan, Randy DeFoor, Rory Diamond and Garrett Dennis were absent for the vote.
The project includes plans for 3,872 square feet of ground floor retail in three suites in addition to dedicated space for a fitness center, workspace and conference room for use tenants.
Gilvarry said Lotus was working with Colliers broker Matthew Clark to fill the spaces. Kelley said Aug. 16 that the developer would not begin pre-leasing the spaces until it closes the remaining construction financing.
Gilvarry said it would be soon.
The redevelopment will allow the retail space to support a food and beverage business with commercial kitchen ventilation and grease traps considered in the design.
The building at 128 W. Adams St. has been home to De Real Ting Cafe for over 20 years. Gilvarry said Aug. 24 that Lotus Commercial and the cafe’s owners had not decided whether the business would remain in the building.
“We are well aware of the challenges of having commercial units, but we are ready to work with anyone to revitalize this corner of Hogan Street,” she said.
According to the DIA project summary, the basement of the building, currently operated by the restaurateur as a nightclub, could have uses for both residential and commercial tenants.
“The basement will provide cage storage, a dog wash and bike storage,” it says.
An amendment to the bill approved by Council states that the project must have a minimum of 38 residential units and 3,750 square feet of commercial space to remain in compliance with the incentives agreement.
The Lotus design and build team includes six Jacksonville-based companies: Robbins Design Studio; Danis Construction; Keister Webb Structural Engineering; Civil and Landscape Engineer Baker Design Build; Development of NineOaks; and TLC engineering solutions.
Real estate law firm Driver, McAfee, Hawthorne & Diebenow is representing Lotus in the project.
Furchgott’s department store, built in 1941, was one of the city center‘s largest remaining retailers when it closed in 1984, according to a report by the city’s planning and development department.
The art deco building was designed by Jacksonville architectural firm Marsh & Saxelbye, which the report calls “the most prolific” firm working in the city from 1919 to 1946.
Council member Matt Carlucci told DIA officials he wanted to ensure the city agency recruits service businesses such as grocers and dry cleaners to support new Northbank residents and make the “more livable” region.
Kelley said DIA is coordinating with realtors to try to fill those business gaps.
“We are making strategic efforts to actively identify and meet with brokers to help realize and bring some of these amenities…for our downtown residents who bring the broad base of business types that one would expect in their neighborhood “, Kelley said.
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