Ambassador Hotel Developer Asks DIA For More Time To Obtain Funding | Jax Daily Record | Jacksonville Daily Record
A developer who plans to restore the historic Ambassador Hotel in downtown Jacksonville wants city officials to give it until the end of June to close funding for the estimated $ 17.6 million project.
At its June 16 meeting, the board of directors of the Downtown Investment Authority will consider a request from AXIS Hotels LLC to correct its default on a city-backed redevelopment agreement by securing funding for the project by June 30 and starting construction by July 31.
According to AXIS Hotel’s plans, the Ambassador would become a 127-room TRYP by Wyndham.
The company has received all of the performance extensions provided for in the city’s deal, according to the DIA resolution released on June 9.
AXIS Hotels is finalizing the terms of a $ 9 million 10% interest mortgage for the project with Direct Lending Partners of Bethlehem, Pa., According to a Jan. 22 letter from the lender to the developer.
The project will also be funded by a $ 3.85 million loan from Local Initiatives Support Corp., equity from AXIS, incentives from Wyndham Hotels & Resorts and other sources, according to documents provided by the city. .
In a letter to AXIS Hotels co-managers Bryan Greiner and George Bochis, DIA CEO Lori Boyer said the city-backed deal can be clawed back as long as the “cure” is underway in the future. 30 days following the defect.
If AXIS corrects the defect and begins construction, Boyer told the company that the DIA would recommend that the board give the developer until December 31, 2022 to complete construction.
Communications provided by the Boyer city show declined AXIS Hotels’ force majeure claims related to the COVID-19 pandemic and a request for an extension of its funding and construction deadlines in the city’s agreement.
In a March 10 letter to the DIA, an AXIS Hotels lawyer said that a tax credit investor he obtained to provide project finance informed the company on March 23, 2020 that he was suspending Investments in hotel projects “indefinitely” due to the coronavirus pandemic and related lockdown orders.
In a response letter, DIA CEO Lori Boyer denied AXIS Hotel’s extension request based on the allegation that circumstances beyond the company’s control were unfounded.
According to Boyer’s letter, construction was scheduled to begin on February 15, 2021.
“At the time of each previous performance schedule extension request, there was no claim of a force majeure event causing the delay,” Boyer wrote.
His letter said that information provided by AXIS Hotel to the DIA showed that it was the underwriting requirements of various lenders that caused the delays, and not an inability to obtain financing due to the pandemic.
“This is particularly evident by the number of lenders who went through the underwriting process and then refused to fund the project instead of just refusing to lend due to the pandemic,” Boyer wrote.
Documents provided by the city in a request for public records did not indicate the number of lenders contacted by AXIS Hotels to fund the Ambassador’s remodel.
City Council approved in May 2020 changes to the redevelopment agreement that includes a $ 1.5 million grant for the Preservation and Revitalization Trust Fund for the City’s Historic Downtown.
If approved by the board of directors, Boyer will file a bill with the board to finalize the changes to the AXIS Hotel agreement.
AXIS Hotels parent company Augustine Development Group LLC intends to redevelop and restore three designated historic buildings in an area two blocks from downtown North Core, including the Ambassador at 420 N Julia St.
Through its subsidiary PEP10 LLC, Augustine Development is working on a 135 million $ 30 million apartment renovation of the former 19-story Independent Life Tower at 233 W. Dual St.
The business plans a 21,000 square foot grocery store on the ground floor, a 10,000 square foot restaurant and an executive sky lounge.
The third project proposed by subsidiary AXIS 404 Julia LLC would convert the 1950s National Central Bank building at 404 N. Julia St. into the lobby of a 139-unit, eight-story mixed-use apartment building.
The three developments would share a 487-space parking garage and provide space for the nearby Jacksonville Fire and Rescue Department headquarters.
The DIA’s resolution does not give a reason for Axis Hotels’ financial delay, and the city had not completed a June 2 registration request for this information by 4 p.m.