Investments in Joint Ventures

12 Months Ended

Sep. 30, 2016

Equity Method Investments and Joint Ventures [Abstract]

Investments in Joint Ventures

2. 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 76.91% 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. At this point, the Company anticipates lease up to occur in the second half of calendar 2016 and all of 2017. 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 fiscal 2016 includes a loss of $938,000 representing the Company’s portion of the loss of this joint venture due primarily to expenses incurred in the joint venture with respect to real estate taxes, advertising expense, depreciation on the bulkhead, and audit fees.

Brooksville. In 2006, the Company entered into a Joint Venture Agreement with Florida Rock Industries, Inc. (now owned by 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 2022 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, and they each have a mandatory obligation to fund additional capital contributions of up to $2,430,000. Capital contributions of $2,397,000 have been made by each party as of September 30, 2016. Distributions will be made on a 50-50 basis except for royalties and depletion specifically allocated to the Company. Other income for fiscal 2016 includes a loss of $40,000 representing the Company’s portion of the loss of this joint venture. In April 2011, the Florida Department of Community Affairs issued its Final Order approving the development of the Project, and zoning for the Project was obtained from Hernando County in August 2012. We will continue to monitor the residential market in Hernando County and pursue opportunities to partner with a master community developer or major homebuilder to commence construction when the market dictates.

BC FRP Realty (Windlass Run). During the 2nd quarter, we entered into an agreement with a substantial 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 September 30, 2016
RiverFront Holdings I, LLC	77.14	%	$  11,261	$  85,106	$   (1,193	)	$   (938	)
Brooksville Quarry, LLC	50.00	%	7,496	14,350	(80	)	(40	)
BC FRP Realty, LLC	50.00	%	5,097	10,573
Total			$  23,854	$ 110,029	$  (1,273	)	$  (978	)
As of September 30, 2015
RiverFront Holdings I, LLC	76.91	%	$  11,517	$  40,970	$   (108	)	$   (105	)
Brooksville Quarry, LLC	50.00	%	7,493	14,336	(80	)	(40	)
Total			$  19,010	$  55,306	$  (188	)	$  (145	)

Summarized Financial Information for the Investments in Joint Ventures (in thousands):

	As of September 30, 2016
	Riverfront		Brooksville		BCF FRP
	Holdings I, LLC		Quarry, LLC		Realty, LLC		Total
Cash	$	297	$	35	$	20	$	352
Cash held in escrow		13		—		—		13
Amortizable Debt Costs		1,179		—		—		1,179
Investments in real estate, net		83,617		14,315		10,553		108,485
Total Assets	$	85,106	$	14,350	$	10,573	$	110,029
Other Liabilities	$	5,140	$	65	$	17	$	5,222
Long-term Debt		63,495		—		—		63,495
Capital - FRP		11,261		7,496		5,097		23,854
Capital - Third Parties		5,210		6,789		5,459		17,458
Total Liabilities and Capital	$	85,106	$	14,350	$	10,573	$	110,029

	As of September 30, 2015
	Riverfront		Brooksville
	Holdings I, LLC		Quarry, LLC		Total
Cash	$	47	$	14	$	61
Cash held in escrow		3,420		—		3,420
Amortizable Debt Costs		1,593		—		1,593
Investments in real estate, net		35,910		14,322		50,232
Total Assets	$	40,970	$	14,336	$	55,306
Other Liabilities	$	6,905	$	64	$	6,969
Long-term Debt		17,000		—		17,000
Capital - FRP		11,517		7,493		19,010
Capital - Third Parties		5,548		6,779		12,327
Total Liabilities and Capital	$	40,970	$	14,336	$	55,306

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

	Years Ended September 30,
	2016			2015			2014
Revenue	$	127			—			—
Cost of operations		1,040			108			89
Operating profit		(913	)		(108	)		(89	)
Interest expense		(280	)		—			—
Net loss of the Partnership	$	(1,193	)		(108	)		(89	)

The amount of consolidated retained earnings for these joint ventures was $(990,000) and $(389,000) as of September 30, 2016 and 2015 respectively.