With most financing in hand, Capitol & West developers looking for a 2014 opening
» Transformation of the circa 1934 federal courthouse at 245 E. Capitol St. will rely heavily on federal and state historic tax credits
By Ted Carter
Financing of the slightly more than $20-million conversion of the James O. Eastland Federal Courthouse in downtown Jackson to mixed-use residential will be completed as soon as the bank backing the project has a term sheet ready for signing, developer Jason Goree says.
Goree declined to name the bank other than to identify it as a Mississippi lender that has agreed to finance about half the costs of converting the building to a mix of commercial uses and apartment rentals. Private investors led by Jackson attorneys Tom Tardy, Marcy Croft and Jason Watkins will have equity stakes in the project which the partners have dubbed Capitol & West for its location at the corner of Capitol and West streets.
An investment group that included King Edward developer David Watkins bought the building soon after the Government Services Administration put it on the market. Watkins is not part of the new ownership, though his son, Jason Watkins, is included in it. The new ownership group has named itself Capitol and West.
Transformation of the circa 1934 structure at 245 East Capitol Street will also rely on federal and state historic tax credits and possibly federal new market tax credits, according to Goree, who said his value to the project is arranging the financing.
“We’re 90 percent done with the financing,” he said. “We’re putting in a lot of private money.”
Goree said the tax credits are the key to keeping rents of the apartments at rates typical to downtown Jackson. “They allow you to stay within the market,” he said, noting the partnership expects to attract young professionals and empty-nesters.
The first unit buildout is expected to be completed in the spring of 2014 with the entire project completed later that fall, according to the developer.
Goree agrees that Capitol & West will be watched closely by other investors who are assessing whether downtown truly has potential as a live, work and play destination. The 95 percent occupancy of current downtown apartments points to pent-up demand that projects such as Capitol & West can fill, Goree said.
“There is no doubt there is a desire for urban living.”
He concedes that ultimately downtown must become more lively to become a large scale residential designation. That could happen, Goree said, with completion of the Farish Street entertainment district, a downtown redevelopment project long stalled by funding shortfalls.
“Getting Farish Street online is going to help,” added Goree, who has been involved in the Farish redevelopment project undertaken by David Watkins Development.
Though closing on lender financing has not yet occurred, workers have already removed asbestos that remained within the five floors of the 115,000 square-foot building vacated upon the new opening of a new federal courthouse nearly two years ago.
“We’re down the road” on this, Goree said, and noted the work done to this point should help avoid surprises later on.
“We used upfront money to do selective demolition,” he said. “You get behind those walls, you get behind those ceilings so you get an idea of what you’re dealing with.
“We kind of know what we’re looking at. We’re not saying there won’t be more surprises, but it definitely minimizes them.”
One conclusion reached in the preliminary work: a retrofit that includes removal of boilers and chillers is necessary, according to Goree.
A new roof, and replacement of mechanical and electrical and plumbing systems are part of the remodel by general contractor Chris Albritton Construction Co. of Laurel that also includes a lobby, a signature bar and restaurant and retail on the first floor and about 50 apartments of from 700 square feet to 1,100 square feet on the remaining floors, Goree said.
The bar and restaurant will encompass the two ground-floor courtrooms, Goree added.
The design by Jackson’s Duvall Decker Architects configures the apartments from judges’ chambers and clerical offices and designates the two courtrooms on the upper floors as common areas.
The Decker firm’s design retains many of the building’s features, including terrazzo floors, marble in the bathrooms, wood paneling, solid walls, Goree said.
“It was so well built and so well put together. With the terrazzo floors, the marble — to take those things out would desecrate the development.”
With sizes ranging from studio to one and two bedrooms, each apartment “will be completely different,” Goree noted.
Along with the original fixtures, the units will feature modern furnishings as well, he said.
The building has 71 parking spaces in the rear that can be assessed from West Street. Where additional parking will come from is still being thought out, according to Goree.
“We’re exploring all of our options,” he said, and noted the partners are considering nearby valet parking for lounge and restaurant guests.
The vacant Edison-Walthall Hotel next store has a multi-level parking garage, but Goree indicated he is unsure the neighboring garage would be an option.
Ultimately, what Capitol & West will offer, he said, “is something you can’t get in the suburbs.”
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