An Israeli lawyer who is part of a partnership that bought downtown Jackson’s Landmark Center plans to convert the vacant seven-floor office building into a mix of apartments, offices and retail.
Zeev Yochelman, whose partnership acquired the 366,000-square-foot Capital Street building through an Internet auction in late July, detailed his plans to an informal breakfast gathering in Jackson on a recent Saturday. He said he and his partners developed a quick fondness for Jackson and believe downtown is ripe for a mixed-use project such as the one they plan for the Landmark.
Local commercial real estate broker Michael Lewis was among those who attended and accompanied Yochelman on a tour of the 175 E. Capitol St. building later in the day.
“He had been to Jackson and doubled back to look some more at the city and the metro area,” said Lewis of Leah Cim Real Estate & Property Management.
The glass-enclosed Landmark building drew Yochelman’s interest right away and getting inside to look around was “icing on the cake,” Lewis said.
The new owner envisions 80 residential apartments on the top two floors, which would cover about 100,000 square feet, and a restaurant, coffee shop, retail stores and bank on the first floor, Lewis said. Floors in between would be leased for offices, he added.
“He definitely sees the potential” for all of the uses, especially residential, Lewis said of the new Landmark owner.
Lewis said Yochelman did not give an estimate of costs involved in conversion of the more than 25-year-old building to mixed use. Nor, according to Lewis, did he say how soon he can start the project.
Yochelman, however, indicated he wants to move quickly, Lewis noted.
“He did say he is a proponent of ‘Time Equals Money,’” Lewis said.
Another business person on hand for the breakfast briefing said Yochelman thinks downtown Jackson can be revitalized and transformed into a live-work-and-play destination.
The apartments he plans for the Landmark’s upper floors would be designed for downtown workers and professionals and would rent at market rates.
Conversion to apartments is going to require extensive plumbing work that must be completed before leasing out office spaces on the lower floors, the Jackson business person said.
The residential component will also require creating about 150 parking spaces on site
A Jackson architectural firm is reported to be doing preliminary design work for the conversion.
The purchase of Landmark Center and planned conversion is a turn of fortunes for both the building and downtown Jackson.
It follows a series of setbacks for the Landmark, the most recent of which occurred last spring when the University of Mississippi Medical Center’s dropped interest in purchasing it.
The death of that deal hit especially hard as downtown leaders considered the prospect of 300 or so additional workers coming to the Central Business District each weekday a game changer.
The Board of Trustees of the Mississippi Institutes of Higher Learning had approved the purchase of the building for between $6.1 million and $6.5 million and planned improvements such as a new roof.
The UMMC disappointment followed the Landmark Center’s loss in a competition with Clinton’s SouthPointe Business Center to become the new home of the Mississippi Department of Revenue. With the demise of the DOR and UMMC deals, downtown’s office space vacancy remained in the high 30 percent range.
It’s not known what Yochelman and his partners paid for the Landmark, though it is believed to have gone for about $2.125 million. The sale price included a 5 percent premium to Auction.com.
The final bid price surprised the Hertz Investment Group, a prominent downtown Jackson office property owner that had sought to buy the building.
“We had no idea it would trade up that high,” said Jim Ingram, Hertz senior VP and chief investment officer, of the price $2 million-plus sale price.
In an interview just after the auction, Ingram said he based his lower price estimate on the costs related to refurbishing the nearly three-decade-old building, including replacing its roof.
Hertz began negotiations to buy the Landmark after the UMMC withdrawal but could not strike a deal with owners U.S. Bancorp. The building subsequently went to auction.
Ingram said Hertz Group sees the Landmark and the need to have it reoccupied as hugely important to downtown Jackson. “I was hoping we could acquire it for a price less than $2 million and try to salvage the UMMC transaction,” he said, indicating Hertz would have passed the property on to UMMC at the price it paid.
Hertz had an option two years ago to buy the Landmark but let it lapse after state officials passed over the Landmark as the Department of Revenue headquarters.
The Landmark carried a price of just over $14 million as recently as 2011.
Two appraisals valued the building at $9.5 million and $11 million, respectively. Hinds County tax records have a market appraisal of about $7 million for the building. Its taxable value is just below $2 million.
Landmark’s owners paid about $240,000 in taxes on the building last year, tax office records show.