An rendering of the completed Interra Apartments, formerly the FBI headquarters, in Arlington. | Interra Apartments
Published on September 21, 2026 at 11:42 am
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Strained by rising costs and construction delays, the owner and developer of the once-dilapidated former FBI headquarters in Arlington, now the Interra Apartments, is close to receiving a property tax break from the city.
The Jacksonville City Council is poised to vote Tuesday night on legislation that would award 8000-1 LLC a $1.5 million property tax refund, known as a Recapture Enhanced Value, or REV grant, after the redevelopment that began in 2021 went nearly $13 million over budget due to rising construction costs.
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The formerly vacant office building at 8000 Arlington Expressway reopened as Interra Apartments in January with 95 market-rate units. It’s one of three six-story buildings on the site.
The original bill called for a $1 million REV grant. But council member Ken Amaro, who represents Arlington, secured support from the council’s Neighborhoods, Rules and Finance committees last week to increase the tax break by $500,000.
“This project has been in the works for a while. The work that has been done thus far has been transformative. They’ve taken the old FBI building and turned it into a very beautiful apartment complex,” Amaro said. “They’re now working on the amenity center. And what’s left are the two remaining office park buildings that have, unfortunately, become kind of an eyesore because of vandalism and graffiti.”
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Two more vacant and shelled buildings on the site are still on track for apartment transformations, the owner’s attorney, Steve Diebenow, told council committee members Sept. 14. But he could not give city lawmakers a definitive start date.
Diebenow said the final redevelopment cost of the former FBI building was $28.5 million, and the owner has invested a total of $35 million into the overall project.
The latest tax deal moving through council would be the city’s second economic development agreement for this project. The original deal was with Theotokos Holdings LLC, a company affiliated with the property’s owner, Marc Kozman. The project is moving forward with a partnership with another company, AXIA GeoCapital LLC.
The first deal, approved in October 2021, awarded an $820,000 property tax refund to the project. But the construction delays resulted in that deal expiring before the project was completed.
A legislative summary drafted by city officials says the original budget called for a $15.545 million capital investment when the city approved the original deal nearly five years ago.
The new agreement was advanced through both council committees last week, with council member Michael Boylan casting the lone no vote in the Finance Committee. Boylan appeared to have concerns that the increased tax refund reduced the project’s return on investment for the city. He voted yes in the Rules Committee, but there he questioned the lack of affordable housing included in the project.
According to the city, the buildings are located in what’s classified as an economically distressed area of Jacksonville.
Council member Ron Salem, who lives in Arlington, says the city should contribute the REV grant to encourage the developer to keep moving to revitalize the area.
“If you’ve lived in Arlington and you’ve driven the Arlington Expressway, you have seen these buildings. They have been an eyesore for probably 20 or 25 years,” Salem said. “I have toured them, I have been out there, I have seen the one that has been developing and under construction. And, if we can turn that area around, we need to do that for this particular area.”
Arlington eyesore no more?
Diebenow said last week that the developer could not commit to a timeline on the two other buildings but noted that Kozman had moved from his Arlington home into the new apartment to manage the project.
According to the attorney, Interra Apartments is currently 70% occupied, and investors want to reach 90% before trying to obtain financing for the two other projects on the 16.41-acre site.
Construction loans are also poised to get more expensive after the Federal Reserve voted Sept. 19 to raise the benchmark interest rate in an effort to curb rising inflation. That also will make it more expensive to borrow money for real estate development projects.
Ed Randolph, the city’s director of economic development, told council members that the city would receive $1.34 in return for every $1 invested in the project. That’s a drop from the 2021 agreement that estimated a $2.01 to $1 return.
The REV grant refunds 75% of the new property tax generated from the building and site improvements over 11 years. The $1.5 million is the maximum the city would refund.
Despite what Diebenow says is 24-hour on-site security and surveillance, the owner and law enforcement have been unable to fully stop the vandalism at the two unrenovated buildings.
Amaro praised the work that’s been done, but he says Arlington residents want to see the project finished to end the trespassing and graffiti.
“The community wants to know what’s the timeline, if there is one, for the simple reason: The longer those buildings stay like that, they become more of a community eyesore and code enforcement gets involved,” Amaro said.
