The developer of the former Rebman’s store at Furnace and Queen streets in Lancaster city has decreased the number of affordable apartments planned for the site in response to neighbors who expressed worries about increased traffic.
Local entrepreneur Jeremy Feakins said the project has cut back the number of apartments to 52. Plans in 2020 were for 72 apartments, which was reduced to 69 in January.
Feakins’ investment firm, JPF Venture Group, is the general partner in the project overseen by Feakins’ OZFund Inc. The fund is targeted at Opportunity Zone projects, with the Rebman’s project as the inaugural effort. An Opportunity Zone is an economic development initiative targeted at distressed areas and funded through tax breaks on income generated by capital gains.
“The size of the project that we had contemplated was too big for that site,” said Feakins, who has owned the site since 2006. “It would have meant a lot of traffic. It’s busy and there are lots of kids there. We want to be a good neighbor. We’re not interested in a huge development.”
The proposal for redevelopment is for a mixed use building with the affordable apartments, a 6,800-square-foot grocery store and a green roof for resident gardening. Feakins said the affordability would be in line with federal definition of affordable housing.
Feakins said he’s looking for an operator for the grocery store with experience in convenience and grocery stores. The plan is to bring healthy choices, including takeout.
“We want to make sure the price point (of the groceries) fits our working family neighborhood.” Feakins said.
On Oct. 5, the city planning commission gave its conditional approval to the final land development plan for the project at 800 S. Queen St. where the quirky iconic family-owned store closed in 2003.
The conditions include:
The city planning commission also directed the developer to correct coversheets regarding the number of parking spaces and width of parking aisle.
The developer will also make a yet-to-be determined payment in lieu of six street trees usually required by the subdivision and land development ordinance. Once the conditions are met, the city will issue building permits for the project, according to Douglas Smith, chief planner.
Timeline set back
The project has been set back about a year from its tentative original timeline. Early on, Feakins envisioned breaking ground this year and having tenants move in by mid-2023.
In January, Feakins predicted construction would begin before the end of the year, which would mean an opening date in 2023.
Now, Feakins said if the project gets the necessary city planning approvals this year, the demolition of the former Rebman’s warehouse could begin before January.
“We have been working with the city,” Feakins said. “They have been a pleasure to work with, especially (planning chief) Douglas Smith.”
Construction is expected to take 12 to 18 months. Pre-leasing could begin in the first quarter of 2023, he said.
Seeking another state grant
OZFund recently requested a $4.5 million grant from the state through the Pennsylvania Redevelopment Assistance Capital Program, or RACP. No decision has been made on the grant. OZFund said in its application that the grant would complete the redevelopment of the Rebman's site, with the intent of creating safe, affordable, and sustainable living and commercial spaces. Preliminary plans include demolition of existing structures; sitework; infrastructure; and construction of a new building. OZFund will match the state grant with $5,239,735.
The application estimates that 58 jobs will be recreated through the project.
In December, Feakin’s JPF Venture LLC, under the umbrella of OZFund Inc., won a $1 million RACP state grant to build affordable homes for working families in Lancaster. The developer had originally applied for $5 million.
The total project cost is around $15 million, Feakins said. The rental rate for the apartments is a “moving target,” Feakins said, given the changing costs of raw materials. Profit margins would be “fairly slim if we want to keep to the lowest rates possible.” The units range from efficiencies to two-bedroom apartments and would rent for $800 to $1,200 depending on the size, Feakins estimated.
Feakins wants to rent all the units at 80% Area Median Income, which fits the federal definition of affordable housing. Area Median Income is an affordability metric calculated by the U.S. Department of Housing and Urban Development. For a family of four in Lancaster County, that would amount to an annual income of $72,150, according to the city.
JPF Venture is using an investment fund, OZFund Inc., in order to participate in the federal Opportunity Zone program. Instead of getting taxed on capital gains made by selling assets like real estate or stocks, wealthy individuals or investors can park those profits in a fund for at least 10 years after which tax liability is erased.
JPF Venture has been able to attract about a dozen local investors who care about creating affordable housing even though Opportunity Zones are not widely known.
Besides leading JPF, Feakins, a British native and naturalized U.S. citizen, heads Ocean Thermal Energy Corp., which is working to implement a technology that generates renewable energy from ocean temperature differentials.
Under federal securities rules, participating investors must be “accredited.” That means they must have a high income — at least $200,000, or $300,000 with a spouse — or net worth of at least $1.0 million.
Rebman’s was a family-owned party-and-holiday decorations and supplies business that operated from the South Queen Street location from 1949 through 2003. The building has been used for storage since. Feakins uses a small building at the rear of the property for his office.