Investment in Joint Ventures

6 Months Ended

Jun. 30, 2017

Equity Method Investments and Joint Ventures [Abstract]

Investment in Joint Ventures

(11) Investments in Joint Ventures.

RiverFront. On March 30, 2012 the Company entered into a Contribution Agreement with MRP SE Waterfront Residential, LLC. (“MRP”) to form a joint venture to develop the first phase only of the four phase master development known as RiverFront on the Anacostia in Washington, D.C. The purpose of the Joint Venture is to develop, own, lease and ultimately sell an approximately 300,000 square foot residential apartment building (including approximately 18,000 square feet of retail) on approximately 2 acres of the roughly 5.82 acre site. The joint venture, RiverFront Investment Partners I, LLC (“RiverFront I”) was formed in June 2013 as contemplated. The Company contributed land with an agreed to value of $13,500,000 (cost basis of $6,165,000) and contributed cash of $4,866,000 to the Joint Venture for a 77.14% stake in the venture. MRP contributed capital of $5,553,000 to the joint venture including development costs paid prior to formation of the joint venture. The Joint Venture closed on $17,000,000 of EB5 secondary financing and a nonrecourse construction loan for $65,000,000 on August 8, 2014. Both these financing sources are non-recourse to FRP. At the time of these financings, RiverFront Holdings I, LLC. was formed as a parent to RiverFront Investment Partners I, LLC with EB5 as an equity partner in Riverfront Holdings I, LLC. Construction commenced in October 2014, first occupancy was in August 2016 and the Company anticipates lease up to occur during all of 2017. The joint venture intends to refinance the construction loan before the initial maturity date of August 7, 2018. The Company’s equity interest in the joint venture is accounted for under the equity method of accounting as MRP acts as the administrative agent of the joint venture and oversees and controls the day to day operations of the project. Other income for the six months ended June 30, 2017 includes a loss of $1,558,000 representing the Company’s portion of the loss of this joint venture. The company and MRP Realty executed a letter of intent in May 2016 and a Contribution Agreement in February 2017 to develop Phase II but the joint venture is not yet formed.

Brooksville. In 2006, the Company entered into a Joint Venture Agreement with Vulcan Materials Company to jointly own and develop approximately 4,300 acres of land near Brooksville, Florida. Under the terms of the joint venture, FRP contributed its fee interest in approximately 3,443 acres formerly leased to Vulcan under a long-term mining lease which had a net book value of $2,548,000. Vulcan is entitled to mine a portion of the property until 2032 and pay royalties to the Company. FRP also contributed $3,018,000 for one-half of the acquisition costs of a 288-acre contiguous parcel. Vulcan contributed 553 acres that it owned as well as its leasehold interest in the 3,443 acres that it leased from FRP and $3,018,000 for one-half of the acquisition costs of the 288-acre contiguous parcel. The joint venture is jointly controlled by Vulcan and FRP. Distributions will be made on a 50-50 basis except for royalties and depletion specifically allocated to the Company. Other income for the six months ended June 30, 2017 includes a loss of $19,000 representing the Company’s portion of the loss of this joint venture.

BC FRP Realty (Windlass Run). During the quarter ending March 2016, we entered into an agreement with a Baltimore development company (St. John Properties, Inc.) to jointly develop the remaining lands of our Windlass Run Business Park. The 50/50 partnership initially calls for FRP to combine its 25 acres (valued at $7,500,000) with St. John Properties’ adjacent 10 acres fronting on a major state highway (valued at $3,239,536) which resulted in an initial cash distribution of $2,130,232 to FRP in May, 2016. Thereafter, the venture will jointly develop the combined properties into a multi-building business park to consist of approximately 329,000 square feet of single story office space.

Investments in Joint Ventures (in thousands):

							The
							Company's
				Total Assets	Net Loss		Share of Net
			Total	of the	of the		Loss of the
	Ownership		Investment	Partnership	Partnership		Partnership
As of June 30, 2017
RiverFront Holdings I, LLC	77.14	%	$8,583	$91,641	$   (2,019	)	$   (1,558	)
Brooksville Quarry, LLC	50.00	%	7,500	14,343	(38	)	(19	)
BC FRP Realty, LLC	50.00	%	5,474	11,113	—		—
Total			$  21,557	$ 117,097	$  (2,057	)	$  (1,577	)
As of December 31, 2016
RiverFront Holdings I, LLC	77.14	%	$10,151	$90,420	$   (1,446	)	$   (1,115	)
Brooksville Quarry, LLC	50.00	%	7,522	14,341	(8	)	(4	)
BC FRP Realty, LLC	50.00	%	5,228	10,784	—		—
Total			$  22,901	$ 115,545	$  (1,454	)	$  (1,119	)

	As of June 30, 2017
	Riverfront			Brooksville		BC FRP
	Holdings I, LLC			Quarry, LLC		Realty, LLC		Total
Investments in real estate, net	$	88,993		$	14,309	$	11,069	$	114,371
Cash		2,295			26		44		2,365
Cash held in escrow		171			—		—		171
Accounts receivable		40			6		—		46
Prepaid expenses		142			2		—		144
Total Assets	$	91,641		$	14,343	$	11,113	$	117,097
Long-term Debt	$	78,587		$	—	$	—	$	78,587
Amortizable debt costs		(852	)		—		—		(852	)
Other liabilities		905			45		—		950
Capital – FRP		8,583			7,500		5,474		21,557
Capital - Third Parties		4,418			6,798		5,639		16,855
Total Liabilities and Capital	$	91,641		$	14,343	$	11,113	$	117,097

	As of December 31, 2016
	Riverfront		Brooksville		BC FRP
	Holdings I, LLC		Quarry, LLC		Realty, LLC		Total
Cash	$	1,023	$	18	$	21	$	1,062
Cash held in escrow		88		—		—		88
Investments in real estate, net		89,309		14,323		10,763		114,395
Total Assets	$	90,420	$	14,341	$	10,784	$	115,545
Other Liabilities	$	6,348	$	1	$	47	$	6,396
Long-term Debt		69,042		—		—		69,042
Capital – FRP		10,151		7,522		5,228		22,901
Capital - Third Parties		4,879		6,818		5,509		17,206
Total Liabilities and Capital	$	90,420	$	14,341	$	10,784	$	115,545

Income statements for the RiverFront Holdings I, LLC (in thousands):

	Three Months Ended June 30,						Six Months Ended June 30,
	2017			2016			2017			2016
Revenues:
Rental Revenue	$	1,742			—		$	3,053			—
Revenue – Reimbursements		18			—			33			—
Total Revenues		1,760			—			3,086			—
Cost of operations:
Depreciation and amortization		1,095			75			1,958			97
Operating expenses		621			148			1,096			216
Property taxes		240			—			459			—
Total cost of operations		1,956			223			3,513			313
Total operating profit		(196	)		(223	)		(427	)		(313	)
Interest expense		(836	)		—			(1,592	)		—
Net loss of the Partnership	$	(1,032	)		(223	)	$	(2,019	)		(313	)

The amount of consolidated accumulated deficit for these joint ventures was $(2,626,000) and $(1,667,000) as of June 30, 2017 and December 31, 2016 respectively.