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Investments in Joint Ventures | 12 Months Ended
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Dec. 31, 2018
Equity Method Investments and Joint Ventures [Abstract] |
Investments in Joint Ventures |
| 2. | Investments in Joint Ventures.
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 year ended December 31, 2018 includes a loss of $61,000 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. On September 28, 2017 BC FRP Realty, LLC obtained $17,250,000 of construction financing commitments for 4 buildings through September 15, 2022 from BB&T at 2.5% over LIBOR. The balance outstanding on these loans at December 31, 2018 was $9,568,000. Essexshire Loan. On January 27, 2018 the Company entered into a loan agreement with a Baltimore developer to be the principal capital source of a residential development venture in Essexshire now known as “Hyde Park.” We have committed up to $9.2 million in exchange for an interest rate of 10% and a preferred return of 20% after which the Company is also entitled to a portion of proceeds from sale. This project will hold 125 town homes and 4 single family lots and is currently in the entitlement process. The loan balance at December 31, 2018 was $594,000. RiverFront Holdings II, LLC. On May 4, 2018, the Company and MRP formed a partnership to develop Phase II of our RiverFront on the Anacostia project and closed on construction financing with Eagle Bank. The Company has contributed its land with an agreed value of $16.3 million (cost basis of $4.6 million) and $6.2 million of cash. MRP contributed capital of $5.6 million to the partnership including development costs paid prior to the formation of the partnership and a $750,000 development fee. The Company further agreed to fund $13.75 million preferred equity financing at 7.5% interest rate of which $8,723,000 was advanced through December 31, 2018. The Company records interest income for this loan and a loss in equity in ventures for our 80% equity in the partnership. The loan from Eagle Bank allows draws of up to $71 million during construction at an interest rate of 3.25% over LIBOR. The loan is interest only and matures in 36 months with a 12-month extension assuming completion of construction and at least one occupancy. There is a provision for an additional 72 months extension with a 30-year amortization of principal at 2.15% over seven-year US Treasury Constant if NOI is sufficient for a 9% yield. The Company’s equity interest in the joint venture is accounted for under the equity method of accounting through the construction and lease up period as MRP acts as the administrative agent of the joint venture and oversees and controls the day to day operations of the project. Bryant Street Parterships. On December 24, 2018 the Company and MRP formed 4 partnerships to purchase and develop approximately 5 acres of land at 500 Rhode Island Ave NE, Washington, D.C. This property is the first phase of the Bryant Street Master Plan. The property is located in an Opportunity Zone, which provides tax benefits in the new communities development program as established by Congress in the Tax Cuts and Jobs Act of 2017. The Company contributed cash of $32 million in exchange for a 61.36% common equity in the partnership. The Company also contributed cash of $23 million as preferred equity financing at 8.0% interest rate. The Company records interest income for this loan and a loss in equity in ventures for our 61.36% equity in the partnership. The Company’s equity interest in the joint venture is accounted for under the equity method of accounting through the construction and lease up period as MRP acts as the administrative agent of the joint venture and oversees and controls the day to day operations of the project. Investments in Joint Ventures (in thousands):
|  |  |  |  |  |  |  |  |  |  |  |  |  | The |
|  |  |  |  |  |  |  |  |  |  |  |  |  | Company's |
|  |  |  |  |  |  |  |  |  |  |  |  |  | Share of |
|  | Common |  |  | Total |  |  | Total Assets of |  |  | Profit (Loss) |  |  | Profit (Loss) of |
|  | Ownership |  |  | Investment |  |  | The Partnership |  |  | Of the Partnership |  |  | the Partnership |
As of December 31, 2018 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Brooksville Quarry, LLC |  | 50.00 | % | $ | 7,449 |  |  | 14,325 |  |  | (122 | ) |  | (61 | )
BC FRP Realty, LLC |  | 50.00 | % |  | 5,976 |  |  | 21,371 |  |  | — |  |  | — |
Essexshire Loan |  |  |  |  | 594 |  |  | 594 |  |  | 39 |  |  | 39 |
RiverFront Holdings II, LLC |  | 80.00 | % |  | 19,865 |  |  | 38,869 |  |  | (66 | ) |  | (66 | )
Bryant Street Partnerships |  | 61.36 | % |  | 55,000 |  |  | 77,541 |  |  | — |  |  | — |
Total |  |  |  | $ | 88,884 |  |  | 152,700 |  |  | (149 | ) |  | (88 | )
As of December 31, 2017 |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
RiverFront Holdings I, LLC (1) |  |  | — | $ | — |  |  | — |  |  | (2,019 | ) |  | (1,558 | )
Brooksville Quarry, LLC |  | 50.00 | % |  | 7,516 |  |  | 14,411 |  |  | (80 | ) |  | (40 | )
BC FRP Realty, LLC |  | 50.00 | % |  | 5,890 |  |  | 15,027 |  |  | — |  |  | — |
Total |  |  |  | $ | 13,406 |  |  | 29,438 |  |  | (2,099 | ) |  | (1,598 | )
| (1) | The Company consolidated this joint venture effective July 1, 2017 (see Footnote 3).
Summarized Financial Information for the Investments in Joint Ventures (in thousands):
|  | As of December 31, 2018 |  |  |
|  | Brooksville |  | BC FRP |  | Essexshire |  | RiverFront |  | Bryant Street |  |  |
|  | Quarry, LLC |  | Realty, LLC |  | Loan |  | Holdings II, LLC |  | Partnerships |  | Total |
Investments in real estate, net |  | $ | 14,299 |  |  |  | 21,352 |  |  |  | 594 |  |  |  | 38,793 |  |  |  | 41,821 |  |  | $ | 116,859 |
Cash and cash equivalents |  |  | 20 |  |  |  | 11 |  |  |  | — |  |  |  | 76 |  |  |  | 35,670 |  |  |  | 35,777 |
Deferred costs |  |  | 6 |  |  |  | 8 |  |  |  | — |  |  |  | — |  |  |  | 50 |  |  |  | 64 |
Total Assets |  | $ | 14,325 |  |  |  | 21,371 |  |  |  | 594 |  |  |  | 38,869 |  |  |  | 77,541 |  |  | $ | 152,700 |
Secured notes payable |  | $ | — |  |  |  | 9,549 |  |  |  | — |  |  |  | — |  |  |  | — |  |  | $ | 9,549 |
Other liabilities |  |  | 119 |  |  |  | 38 |  |  |  | — |  |  |  | 1,887 |  |  |  | 2,886 |  |  |  | 4,930 |
Capital – FRP |  |  | 7,449 |  |  |  | 5,892 |  |  |  | 594 |  |  |  | 31,347 |  |  |  | 55,000 |  |  |  | 100,282 |
Capital - Third Parties |  |  | 6,757 |  |  |  | 5,892 |  |  |  | — |  |  |  | 5,635 |  |  |  | 19,655 |  |  |  | 37,939 |
Total Liabilities and Capital |  | $ | 14,325 |  |  |  | 21,371 |  |  |  | 594 |  |  |  | 38,869 |  |  |  | 77,541 |  |  | $ | 152,700 |
The Company’s capital recorded by the unconsolidated Joint Ventures is $11,398,000 more than the Investment in Joint Ventures reported in the Company’s consolidated balance sheet due to the lower basis in property contributed. Income statements for the RiverFront Holdings I, LLC, prior to consolidation July 1, 2017 (in thousands):
|  | Year ended
|  | December 31,
|  | 2017
Revenues: |  |  |  |
Rental Revenue |  | $ | 3,053 |
Revenue – Reimbursements |  |  | 33 |
Total Revenues |  |  | 3,086 |
Cost of operations: |  |  |  |
Depreciation and amortization |  |  | 1,958 |
Operating expenses |  |  | 1,096 |
Property taxes |  |  | 459 |
Total cost of operations |  |  | 3,513 |
Total operating profit |  |  | (427 | )
Interest expense |  |  | (1,592 | )
Net loss of the Partnership |  | $ | (2,019 | )
The amount of consolidated retained earnings for these joint ventures was $(2,702,000) and $(2,638,000) as of December 31, 2018 and December 31, 2017, respectively.

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- Definition The entire disclosure for equity method investments and joint ventures. Equity method investments are investments that give the investor the ability to exercise significant influence over the operating and financial policies of an investee. Joint ventures are entities owned and operated by a small group of businesses as a separate and specific business or project for the mutual benefit of the members of the group. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Publisher FASB -Name Accounting Standards Codification -Topic 323 -URI http://asc.fasb.org/topic&trid=2196965 + Details
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