The Vestcor Companies, a Jacksonville-based multifamily housing developer, is seeking to construct a 136 unit apartment building in Jacksonville’s emerging Brooklyn neighborhood.
Through its subsidiary TVC Development, Vestcor has obtained development rights through the Downtown Investment Authority to build a new residential structure along a 1.16-acre site along Spruce Street, bounded by Jackson and Stonewall Streets. The development would be located just West of the Park Street commercial district and near the JS Johnson Community Center.
These images show the proposed site of Vestcor’s newest affordable housing development in the Brooklyn neighborhood.
Rents would be subsidized, and the amount of reduced rent a tenant would be eligible for is dependent on certain levels of income restrictions. Half of the property’s units would be classified as ‘affordable housing’, available to rent by those earning at or below Jacksonville average median income of $29,000 annually. The other half would be classified as ‘workforce housing’, available to those earning between 80-140% of the area’s average median income- meaning a household can earn no greater than $69,600 to be eligible.
Vestcor originally ventured into downtown development in 2001 with the purchase the former Lynch building and The Carling Hotel, two historic high rises listed on the National Register of Historic Buildings. Providing new housing units Downtown has required various levels of public investment, and Vestcor’s involvement proved to be a valuable, early case study on the broader market’s interest in providing rental housing in the Central Business District. Backed by more than $33 million in loans from the City of Jacksonville, both buildings were converted into market-rate apartments with ground level retail spaces.
11 East Forsyth (formerly the Lynch Building) is a 17-story, mixed use building originally constructed in 1926. The Vestcor Companies renovated the historical structure in 2003, converting office space into 127 apartment units, ground floor retail space and a newly-constructed, attached six-story parking garage. Image courtesy of Wikipedia.
Originally, the City of Jacksonville borrowed from the Self Insurance Fund and issued bonds in order to finance Vestcor’s rehabilitation of both buildings. As the loans to Vesctor held interest rates of 1.4% and 1.525%, and the City’s carrying costs on these loans were 6% and 5.1%, the City has subsidized the monthly costs of the financing structure since issuing the loans between 2003 and 2006. These subsidies have required the City to either tap into revenues generated from the Northbank Tax Increment Financing District (Northbank TIF) or through the General Fund when the TIF did not generate sufficient tax receipts. Vestcor has twice modified the payment terms of the City’s loans in 2010 and 2014 - by either suspending or partially suspending principal payments for concurrent three year periods. With the expiration of the 2014 deferral agreement, the company has since returned to making normal principal plus interest payments.
Highlighting the incentives provided to Vestcor nearly two decades ago to help jumpstart residential construction downtown is important, in so much as to understand how much residential growth can be expected within Downtown’s boundaries, given the cost constraints and expectations for return from the private market in order to fund the construction of new housing units into the next housing cycle and beyond.
Vestcor’s development will wrap around three single-family, gabled roof structures built between 1909 and 1914. The architecture of Brooklyn’s historical housing stock reflect variations of the Folk Vernacular Style of architecture. These buildings represent vanishing examples of how rural and lay builders in the South utilized simple and time tested construction principles, as well as local building materials of the 19th and early 20th century.
The Lofts at Brooklyn community, would be Vestcor’s 4th affordable housing multi-family development in Jacksonville’s urban core. The move away from market-rate housing representing a shift in the company’s strategy in regards to urban residential development. These four affordable housing developments rely on the Low Income Housing Tax Credit (LIHTC), a federal subsidy administered by the Florida Housing Finance Corporation (FHFC).
The company is under contract to purchase the land; however, the land purchase is contingent upon whether or not Vestcor is awarded LIHTC rights for $17 million tax credits. In addition to federal housing tax credits, the Downtown Investment Authority has approved a $3.38 million REV Grant as a reduction in property taxes credited over 15 years and a $626,000 loan to TVC Development for the proposed Lofts at Brooklyn development. Although final architectural plans are subject to LIHTC awards, the development is slated to include studio, one-, two- and three- bedroom apartment options.
The local incentive package provided for Lofts at Brooklyn, which are similar to the structures of incentives given to Vestcor’s three LaVilla affordable housing developments, is an interesting contrast to the level of local investment needed to spur market-rate residential growth in 2003 and 2006. Given that these new affordable housing starts are subsidized through the federal LIHTC program, the Downtown Investment Authority had significantly less exposure and a much lower initial cash outlay to incentivize over 500 new residential housing units over a 4 year period.
Located East of the Park Street commercial district, 220 Riverside and Brooklyn Riverside were the first new residential structures built in Brooklyn in over 24 years when both developments came online in 2014. These market-rate housing communities were respectively developed by Jacksonville-based NAI Halmark and Atlanta-based Pollack Shores, both in partnership with Memphis-based Mid-America Apartment Communities. Brooklyn was once defined by various affordable-living options for urban core residents. However, the neighborhood fell on hard times as Jacksonville’s urban core lost over 60% of its residential population between 1960 and 2010. If Vestcor is successfully awarded the necessary tax credits to begin construction, it would mark the return of affordable housing in Brooklyn for the first time in nearly three decades.
102 Chelsea Street is a two-story quad built in 1985 by the Jacksonville Housing Authority. This was the only new structure built by the City of Jacksonville after Code enforcement swept through the neighborhood in the early 1980’s, prompted by a Downtown Development Authority plan to market ready-to-build sites for new residential, commercial and mixed-use development. At the time, the City considered that more then two-thirds of the 364 residential structures in Brooklyn were classified as dilapidated. This effort resulted in the wide-spread demolition of residential structures and the displacement of more than one hundred residents. The neighborhood’s stagnated development pattern can be clearly seen by the contrast of the adjoining property (second image), featuring a single family structure built in 1901. Many of the single-family structures that still stand today date to the late 1800’s and early 1900’s when the western-most portion of Brooklyn was a thriving, working-class neighborhood.
This development, which originally consisted of nearly two dozen single-family attached residences along Spruce and Elm Streets, was constructed between 1971 and 1972.
This seven unit townhome development along Elm Street was built in 1990. These townhomes were the last residential structures built in Brooklyn until NAI Halmark officially broke ground on 220 Riverside in 2012. The development team behind 220 Riverside is now preparing to break ground on the 10-story, high-rise, mixed use apartment building called Vista Brooklyn. It would be the first high-rise constructed in the urban core since the Great Recession.
A comparison of aerial images of the Brooklyn neighborhood from 1943 and 2017. Major roadway projects, such as the construction of I-95, the Acosta Bridge and the widening of both Forest Street and Riverside Avenue have forever changed the neighborhood’s landscape. Now a hotspot for infill development, Brooklyn’s historic flavor is being replaced by a network of Texas Doughnut-styled multifamily developments.
Next: A Q&A from Ryan Hoover, President of TVC Development