The Downtown Investment Authority board gave AXIS Hotels LLC until June 30 to close on financing for its estimated $17.6 million renovation of the historic Ambassador Hotel.
The board voted 7-0 on June 16 to allow the Augustine Development Group LLC subsidiary time to cure a default on its redevelopment agreement with the city for the 420 N. Julia St. property.
The board’s vote also gave the developer until July 31 to begin construction.
The redevelopment agreement, approved by City Council in early 2019, went into default after AXIS failed to start construction by a Feb. 15 deadline.
The DIA had issued the maximum performance schedule extension allowed under the agreement.
The board’s vote June 16 also supports extending the developer’s construction completion date to Dec. 31, 2022, but legislation permitting the extension will have to be approved by Council.
Under AXIS Hotel’s plans, the Ambassador would become a 127-room TRYP by Wyndham.
AXIS Hotels is finalizing terms for a $9 million mortgage at 10% interest for the project with Direct Lending Partners of Bethlehem, Pennsylvania, according to a Jan. 22 letter from the lender to the developer.
Documents provided by the city show the project also will be financed through a $3.85 million loan from Local Initiatives Support Corp., equity capital from AXIS, incentives from Wyndham Hotels & Resorts and other sources.
The DIA rejected AXIS’s force majeure claim.
A March 10 letter from the company’s attorney said a tax credit investor it secured to provide project financing notified AXIS on March 23, 2020, it was “indefinitely suspending” investments in hospitality projects due to the coronavirus pandemic and related lockdown orders.
In a response letter, Boyer said information provided by AXIS Hotel to the DIA shows that underwriting requirements from lenders caused the delays, not an inability to obtain financing because of the pandemic.
AXIS Hotels parent company Augustine Development Group LLC plans to redevelop and restore three designated historic buildings, including the Ambassador, in a two-block area of Downtown’s North Core.
Through subsidiary PEP10 LLC, Augustine Development is working on a $30 million, 135-unit apartment retrofit of the 19-story former Independent Life building at 233 W. Duval St.
The third project proposed by subsidiary AXIS 404 Julia LLC would convert the 1950s-era Central National 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 spaces for the nearby Jacksonville Fire and Rescue Department headquarters.
DIA board members Todd Froats and David Ward were absent from the June 16 meeting and did not vote.