Laura Street Trio in Trouble? Updated status of six key Downtown projects

[SunKing]

So what has Atkins done before? I've sorted through 20 pages of this back and forth. It's pretty silly to keep bringing Khan into this, especially for those trying to defend Atkins; "self-made billionaire and most famous guy in the city" would make anyone pale in comparison.

I also think its silly to bring in Khan as well, actually.  Especially since he is no longer involved with the deal (apparently to the dismay of a few people who think he should own all of downtown) But there you have it.

If any comparison is being made, its over the credulity involved with handing a billionaire hundreds of millions of tax dollars vs the incredulity on the part of a couple of posters who can't imagine why Steve was able to arrange financing with one of the country's most substantial real estate development companies and several of its largest and most recognizeable corporations.

In fact, if you scroll back, there was even an attempt to smear the reputation of the companies involved----simply because two of our posters would not like to see Atkins succeed.

The process should be uniform in my opinion.  Everyone should be subject to the same scrutiny and questions when asking for tax dollars.  But this conversation hasn't really been about the money or the bona fides (any thinking person would look at the financial team and realize that the process has been vetted by some of the best in the industry) its just about this southern local madness of casting aspersions on the crab that seems to be crawling out of the box.

I think the Khan vs Atkins debate - the one that's talking about them personally - is a distraction. I think what people may actually be arguing over is the simple financial health of this project. There isn't a lot known about Atkins, and it doesn't look like he has billions - or maybe even millions - of his own money he could dip into if there are cost overruns. We've seen too many examples of proposals falling apart due to financial issues after the city has forked over money.

That being said, if we start setting up barriers for smaller local developers that want to try and develop larger projects downtown, the whole redevelopment of downtown is going to remain a very slow process. One of my big pet peeves is that we have to rely on these big projects because so many buildings have been demolished over the decades that would have otherwise allowed people like Atkins and others to get their feet wet with smaller projects. These incentives wouldn't be needed if we had been smarter in the past. So forking over a little something to Atkins is just going to be the tax we pay for being foolish and shortsighted in the past.

Word.
Which is why it would be helpful to know a little something about the guy.

[Non-RedNeck Westsider]

The part that still puzzles me is the amount of upfront cash that is expected on these types of projects.

I'm not against using tax money for projects that will have an opportunity to have a positive impact on the city overall.  I'm against the upfront payouts.  This type of tax spending should be looked at along the lines of an investment as opposed to a cost since there is a good potential to recoup the money later down the line.

Have the deals written in such a way that the city is guaranteeing 'x' amount of $$$ after certain benchmarks, as Stephen alluded to earlier, are hit, just as you're allowed to submit for a draw on the private side of the industry.

[For_F-L-O-R-I-D-A]

Is there bank financing for this project? The story mentions everything but.


Also, putting another bank in the bottom floor of the Barnett building would be dead space and a waste. They need another restaurant to create the environment they want and Jacksonville deserves.

[thelakelander]

Vagabond Coffee will be on the first floor as well, so that helps.

CenterState Bank has agreed to put a branch on the first floor, but is not the major tenant. Vagabond Coffee has committed to a coffee shop in the lobby.

Some bank financing would be possibly provided by US Bank N.A.

U.S. Bank has provided term sheets for $40 million that it would lend the project.

full article: http://jacksonville.com/business/real-estate/2015-11-10/story/laura-street-trio-developer-has-new-partner-wants-8-million

Both companies have construction and financing responsibilities. Of the nearly $78 million, the two firms would partner for $20 million in private equity and another $40 million through commercial loans. The remaining would be offset by about $9 million in Federal Historic Tax Credits and an $8 million ask from the city for public funding.

Molasky has done a host of government projects, including FBI centers in San Diego, Cincinnati and Minneapolis. It's done retail like big-box strip centers. And multifamily housing in its native Nevada and California.

However, the Laura Street Trio and Barnett Bank building would be the company's first historic redevelopment.

"It intrigued us," said Sher. "It's taking what once was beautiful and making it that way again. Really, with the history of these buildings, who wouldn't?"

Sher credits Jacksonville-based Danis Building Construction for the needed expertise in historic rebuilds. The company recently completed the Jessie Ball duPont Center, formerly the Haydon Burns Library.

Such a project could springboard Molasky to pursue other historic redevelopments or pursue other work in the Jacksonville area. The company also owns a Veterans Administration building in town.

The Downtown project brings a certain level of risk for the company, though.

Sher said US Bank N.A. would only secure 50 percent of the funds needed for the project, even with the Molasky's backing. Typically, it's 60 percent.

That's partially why the $8 million being asked of the city is important. It helps boost that equity, but also shows public support in such a project, he said.

And to show the city the company is engaged, it's Molasky's $3.1 million that's been placed in a private trust to pay off the mortgage owed to Jacksonville Jaguars owner Shad Khan.

Full article: https://www.jaxdailyrecord.com/showstory.php?Story_id=546489

[For_F-L-O-R-I-D-A]

Thanks Lake. That was really helpful. Although I am still concerned that a "coffee shop in the lobby" won't be enough. There is a coffee shop in the BoA Building too but you would never know from the street. I guess one step at a time though.

I think we could put some pressure on the Mayor to use his Tally ties and our NE FL delegation to maybe get some funding from the state for historic preservation to at least take a little bit of the weight off of the city.

[CCMjax]

FYI - Looks like there is going to be a meeting with the DIA this Friday from 10-noon at the Ed Ball Building that is open to the public, however, the public will only be listening not asking questions.  I am going to try to make it to listen in.

https://www.change.org/p/encourage-jacksonville-city-officials-to-approve-the-additional-10-needed-to-fund-the-barnett-trio-project/u/14243294

[sschwartz2929]

Center State bank will be on the bottom floor of a new building they are putting behind the Florida Life building (empty lot). This building will also feature a rooftop bar and tapas by Liz.

The Marriott will be in the upper floors of the new building, the Bisbee, and the florida life building.

The Bullbriar Restaurant will occupy the marble bank.

A large international bank will occupy the bottom floor of the Barnett Bank building. Also Vagabond will have a space in the lobby. Apartments in the upper floors.

The bottom floor of the Bisbee will house a grocery store/bodega featuring grab and go food by catering by liz.

Jon Insetta is opening another Black Sheep across the street at the Jacksonville Bank spot.

Lots of activity in and around the Trio if we get it done.

[thelakelander]

Don't forget about FSCJ turning 20 West into a dorm for 60 college students with a restaurant run by its culinary school immediately next door on Laura. The heart of the Northbank could quickly turn around with its major central dead zone being immediately activated with three blocks of around the clock, pedestrian scale activity.

[RattlerGator]

This Atkins stuff is beginning to sound sketchy as hell:

http://www.bizjournals.com/jacksonville/news/2015/11/19/wallacedia-wont-be-rushed-into-laura-street-trio.html

Wallace said on Tuesday his team also had less than 10 days to review the plan and still haven't been provided documents needed to determine if the developer could meet the debt load.

Atkins, who said Wednesday morning he would be available to talk in the afternoon, did not answer a phone call later in the day.

One major issue that Wallace said would prevent the DIA from moving forward at all: The fact that Jacksonville Jaguars owner Shad Khan has foreclosured on the loan his Stache Investments Corp. provided to fund Atkin's purchase of the Barnett Bank building.

While Wallace said the foreclosure must be resolved before any city involvement, Atkins has said the foreclosure will be taken care of once the city provides funding.

What the hell kind of B.S. is that ? ? ? Honestly, this sounds bogus. It reads like they can't do a damn thing without the city stepping way the hell out on a limb and setting itself up to be suckered.

[edjax]

So per the article the city would also be responsible for building the garage??  I sure don't recall him mentioning that in his latest release.  Honestly,you really do understand why the city has to be very cautious dealing with this guy.  Hopefully it works out, we shall see.

[acme54321]

Sounds to me like the city is just trying to be smart about it all.  Wallace knows this is the biggest thing going downtown, he isn't trying to kill it.  Let DIA review the project and negotiate with him for what the city will bring to the table.  It's their job after all.  I'm confident that if they are close enough to making this happen they can negotiate a favorable deal for the city and developer. 

[edjax]

Sounds to me like the city is just trying to be smart about it all.  Wallace knows this is the biggest thing going downtown, he isn't trying to kill it.  Let DIA review the project and negotiate with him for what the city will bring to the table.  It's their job after all.  I'm confident that if they are close enough to making this happen they can negotiate a favorable deal for the city and developer.

As long as the city is in the business of making sure Khan gets money, Im sure everything will be alright.   But yes, I think its close enough. 

Hopefully Steve will be willing to share with other developers how he managed to put together a project with this kind of backing. It would be nice to have other options than the team of investors with the longest losing streak in our history.  The ability to attract this level of investor here is pretty exciting.  How he did it needs to be shared.

Did he mention during your breakfast meeting that the garage was not included in the 77 million and that it would be the responsibility of the city to build?  Or is this Ian error in reporting by the JBJ?

[thelakelander]

To move the project forward, Atkins is asking the city for $8 million in grants as well as having the city provide parking spaces, which could cost between $6 million and $10 million for a 300 to 700 space parking garage.

So we're looking at somewhere between $14 - $18 million from the city.

[edjax]

To move the project forward, Atkins is asking the city for $8 million in grants as well as having the city provide parking spaces, which could cost between $6 million and $10 million for a 300 to 700 space parking garage.

So we're looking at somewhere between $14 - $18 million from the city.

Yea, looks hat way. Was trying to find out from Stepehn above if perhaps an error in reporting?  If the city building the garage is the case then it does increase the city amount to nearly 20%. Which personally I would probably still be ok with but I do see where it could potentially have the city even more doubtful with Mr Atkins as that was not mentioned in his public release.  Also I see in the article where Wallace mentions the petition signatures that were received. This was never mentioned in the petition either.  In fact the petition specifically mentioned that the 77 millions was the TOTAL cost of,the project.  And the drawing they provided included a parking garage with retail. Perhaps he city will now look at,the number of petitioners signed with some skepticism. And I was one who signed it.

[acme54321]

I'd like to know more about this garage too.  Will the city own it?  Will the development pay the city for the spots it's using in the garage?  Or would they use the spots free for some predetermined period of time?