ONE CITY. ONE JACKSONVILLE.

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1 ONE CITY. ONE JACKSONVILLE. OFFICE OF ECONOMIC DEVELOPMENT CITY OF JACKSONVILLE, FL NORTHWEST JACKSONVILLE ECONOMIC DEVELOPMENT FUND (NWJEDF) ANNUAL REPORT FISCAL YEAR 2017 Program Overview The Northwest Jacksonville Economic Development Fund (NWJEDF) is a public fund accessible by existing and prospective businesses in the Northwest Jacksonville area. The goals of the NWJEDF are to: Create access to jobs for area residents. Support the expansion of existing businesses within the Northwest Area and encourage the creation of new service and retail businesses to service the needs of the community. Encourage redevelopment of vacant and underutilized buildings within the Northwest Area. Stimulate new investment within the Northwest Area adding to the tax base. Financial Position and Funds Available Average monthly revenue for FY2017 was $68,084. Average monthly principal return for FY 2016 was $54,168. As of September 30, 2017, the balance of the NWJEDF was $5,864,937. This includes encumbrances totaling $436,000 for approved projects. Two settlement agreements for previously defaulted projects totaling $486, were approved during FY2017. Projects Completed During FY 2017 Sea Breeze Food Service, Inc., a food distribution company servicing restaurants in a 220 mile radius of Jacksonville, expanded their facility by an additional 16,311 square feet of space, which includes a freezer, dry storage, test kitchen and sales office/meeting space. In order to expand operations, Sea Breeze had to connect to City sewer, add a lift station and demolish the existing septic system. Further, the project required Keen Road (adjacent to the property at 3807 Edgewood Drive) to be widened and repaved. The NWJEDF Advisory Board and City Council approved a $238,909 infrastructure grant to help defray the infrastructure costs. The Project requires the creation of 5 new FTE s within 36 months of Completion. To-date 8 new FTE positions have been created. The Certificate of Completion was issued on September 30, OED staff conducted a site visit on October 24, Proof of final payment and lien release was received from the Company on February 2, The grant was disbursed to the Company on February 10, Corbett Street, LLC (Mixon Studios) was founded in May of 2015 for the purpose of developing a multi-purpose facility to serve the needs of the Mixon Town and McCoy s Creek

2 Page 2 of 5 neighborhood areas. The project site is located at 2385 Corbett Street and comprises 1.63 acres and includes 4 buildings totaling 17,600 square feet of usable space. The NWJEDF Advisory Board and City Council approved a $34,000 grant to help offset the cost of HVAC improvements. Following site acquisition, environmental remediation, renovations to the blighted buildings, and HVAC improvements it now serves as an affordable event venue, office space, and artist studios. The Project has a job creation goal of 6 new jobs within 36 months of completion. To-date 7 new FTE positions have been created. The Certificate of Completion was issued on April 10, OED staff conducted a site visit on April 18, Proof of final payment and lien release was received from the Company on April 18, The grant was disbursed to the Company on April 21, Farmers Market, Inc. (dba Jacksonville Farmer s Market) is an open air market that rents space to wholesalers, farmers, and vendors for the purpose of selling produce, agricultural products and other foods and plants. The existing location on Beaver Street was in need of physical improvements, including sidewalk expansion to accommodate increased foot traffic and improve handicapped accessibility, addition of permanent metal awnings, installation of safety bollards, and a public address system. The NWJEDF Advisory Board and City Council approved a $150,000 grant to help defray core improvements to the site. The Project requires the creation of 20 new FTE s within 36 months of Completion. The Certificate of Completion was issued on September 6, OED is currently waiting for documentation required for the disbursement of funds. Hans-Mill, a newly formed US corporation, manufactures metal household goods for a variety of US retailers such as Wal-Mart, Home Goods, JC Penney, and Target. The Company proposed to renovate and expand the existing manufacturing facility at 5406 West 1 st Street to serve as a metal household goods manufacturing facility. The NWJEDF Advisory Board and City Council approved a $200,000 grant to help offset renovation costs. The Project requires the creation of 23 new FTE s within its first 18 months of operation and is expected to represent an estimated total Capital Investment of $11,799,000. To-date 36 new FTE positions have been created. OED is currently waiting for documentation required for the disbursement of funds. Projects Approved During FY 2017 Liquid Proof, LLC (dba Four Fathers Distillery) was founded by Tim and Sandra Daniels in September of The purpose of the corporation was to create a distillery to manufacture limited production quantities of a variety of authentic craft spirits, private label production and private barrel aging for consumers. The Company has agreements with Bacardi and Savannah Spirits to distill and bottle specialty spirits. They also propose to open their distillery to the general public for tours. Mr. Daniels purchased the 8,000 square foot facility at 2917 Borden Street in May of 2015 to create the distillery. The NWJEDF Advisory Board and City Council approved a $25,000 grant to offset a portion of the cost to extend the 6 water line to the building necessary to operation the sprinkler system. The NWJEDF Advisory Board and City Council also approved a $61,000 loan for a term of 60 months at an interest rate of 3 percent per annum to help pay for installing the sprinkler system and remaining cost for the extension of the water line. The loan will be secured by a second mortgage and the City is working with Mr. Daniels to establish a closing date. The Project requires the creation of 5 new FTE s within 18 months of grant disbursement and construction must be completed on or before February 1, Construction is in process and there are active permits on the property. Other Approvals During FY 2017 For Your Child Only, Inc. was founded and incorporated in September The co-owners of the business are Jessie and Rosa Wilcox. Ordinance E authorized a loan and

3 Page 3 of 5 appropriated $240,000 from the NWJEDF for the acquisition of land and a building to be used as a day care facility. Due to unforeseen medical issues and corresponding expenses Mr. and Mrs. Wilcox were unable to pay the balloon payment for the Note; however they continued to make monthly payments. The NWJEDF Advisory Board and City Council approved a request to re-amortize the remaining loan balance of $98,449 over a 7 year period (84 months) at an interest rate of 3 percent in order to bring the project current with the loan obligation. Ordinance E was enacted on February 14, 2017, thereby extending the maturity date of the loan to February 1, Ernestine Baker dba T.C. s Bar-B-Que. On April 1, 2003 the City of Jacksonville entered into a Redevelopment Agreement (RDA) with Ernestine Baker dba T.C. s Bar-B-Que for a restaurant located at 1269 Edgewood Avenue. On April 11, 2003, the City lent Ernestine Baker $100,000, which was secured by a first mortgage on the property. On March 25, 2008 the maturity date was extended through April 11, As a result of failure to make payments, the City filed foreclosure action on the property on February 24, A judgement was awarded on October 14, A foreclosure sale was scheduled for January 29, 2014; however the property was sold to Edgewood Ave Commercial Land Trust and 6100 Philips Hwy, LLC (Purchasers) through a tax deed sale on January 8, The foreclosure sale was cancelled and the City and Purchasers reached a settlement agreement for $40,000 plus $7, of the surplus funds resulting from the tax deed sale. The settlement agreement was executed on January 11, Payment from the Purchasers was deposited on January 11, 2017 and surplus funds were received on February 8, The foreclosure action and corresponding crossclaim was dismissed on September 7, Evelyn Greer (Shoppes at Norfolk). On November 9, 2007 the City of Jacksonville entered into a Redevelopment Agreement (RDA) with Shoppes at Norfolk for a shopping center located at 4750 Soutel Drive. On November 23, 2007, the City lent Shoppes $877,429, which was secured by a second mortgage on the property. In conjunction with the loan documents, Unconditional Guarantees were executed by Evelyn Greer, William Green, and K Mack, LLC on October 29, Shoppes experienced financial difficulties during the redevelopment project, which resulted in a foreclosure sale on the property on August 3, 2012 and a corresponding breach of the loan documents. The City filed a lawsuit against Shoppes, Greer, Green, and K Mack, LLC on July 2, A settlement agreement between the City and Evelyn Greer was approved via Ordinance E and executed on June 20, 2017 for 50 percent of the remaining principal balance, or $438, Funds were received via wire transfer on July 3, 2017 and deposited back into the NWJEDF for appropriation to future projects. A summary judgement was filed against the remaining Guarantors on the loan. Loan Status The Office of Economic Development is currently servicing the following loans:

4 Page 4 of 5 Borrower Moncrief Plaza (Urban Core Enterprises, Inc.) Soap Bubbles Laundromat Jessie & Rosa Wilcox/For Your Child Only Loan Origination Date Original Principal Amount NWJEDF Loan Status as of 9/30/2017 Loan Terms (Years) Interest Percent (%) Principal Balance (as of 9/30/2017) Payment Status 07/31/2003 $2,100, % $928,813 Current 05/2/2003 $122, % $43,271 Current 05/30/2003 $240, % $87,765 Current Third & Main 09/26/2008 $850, % $840,422 Current First Coast No More Homeless Pets, Inc. (Loan 1) 03/06/2009 $211, % $159,182 Current Fresh Ministries 05/23/2011 $392, % $364,332 Current North Point Town Center First Coast No More Homeless Pets, Inc. (Loan 2) Mr. G s Hair Depot 01/27/2012 $527, % $522,565 Current 08/28/2015 $397, % $403,375 Current Files at Office of General Counsel 11/15/2002 $63, % $44,988 Default Comments Maturity date extended through 2/1/2024 Interest only terms until 04/2017 Interest only terms until 03/2017 or 95% occupancy Note: balance includes accrued interest from time of loan disbursement per Agreement First Coast BBIC filed motion for summary judgement. Hearing scheduled for end of October 2017.

5 Page 5 of 5 Shoppes of Norfolk Cedar Grove Corporation 11/23/2007 $877, % $438,715 Default 06/24/2009 $125, % $116,232 Default Cowealth 02/16/2012 $380, % $353,181 Default Settlement payment received from Evelyn Greer on 7/3/2017. Summary judgement issued against remaining guarantors. Default judgement issued against the Company and recorded on 7/21/2017. KJB filed bankruptcy on 3/20/2017. City has filed claims against the guarantors, but it is subject to the Subordination Agreement.