Month: March 2010

“People come in here and ask, ‘Why are there so many vacancies?’ It gives them the impression that the Mall is going under,” says George Benford, owner of Siips Wine Bar and board member of the Downtown Business Association of Charlottesville (DBAC). Benford explains that increasing vacancies on the Downtown Mall are fueling a vicious cycle: Empty storefronts weaken the Mall’s image and hurt sales, which in turn causes more stores to go out of business, leaving more vacancies.

Recognizing the growing number of empty spaces on the Downtown Mall, the city’s Office of Economic Development began conducting a semi-annual “vacancy report” in July 2008, when the Mall faced a 3 percent storefront vacancy rate. By July 2009, the rate had jumped, and 9 percent of the Mall’s 193 storefronts were vacant.

According to Chris Engel, the city’s Assistant Director of the Office of Economic Development, January 2010’s numbers are right around that 9 percent mark, which represents 18 empty storefronts of the 193 total. While that percentage might not sound like much, the sight of bare windows and consecutive “For Lease” banners along the Mall makes the increase in Downtown Mall vacancies since 2008 far more apparent. Throw in the Charlottesville Ice Park, which recently went on the market for $4.1 million, and the threat of empty space looms a bit larger.

Though the economic downturn is a key factor, it is not solely to blame for slower business, says Benford. This winter’s record snowfall and the structure of the 2009 calendar year also played a part. The December snowstorm, which occurred the week before Christmas, kept many consumers from trekking to the Downtown Mall. Also, with Christmas, New Year’s Eve and Valentine’s Day falling on weekends, mid-week sales did not enjoy the boost that holiday shopping typically provides. 

“We’re struggling to get to April. I’m hearing it from so many businesses,” says Benford.

Local realtors, on the other hand, largely see the vacancies as a product of the nationwide economic slump. “Those spaces will fill up when demand returns, and the tenants and landlords find the level of pricing that works for both parties,” says Bob Kahn, of Bob Kahn Realty and Investment. In fact, city spokesman Rick Barrick says a few businesses have already seized some empty spaces. 

“We are aware of three new businesses coming to the Mall area in the next two months,” wrote Barrick in an e-mail. “In the old Order from Horder space, a popcorn retailer and an iron works art gallery, and in the 500 block of East Main a toy store will arrive next to the Hallmark store.” 

Also, many realtors are advertising reduced rents on their online listings as a way to adjust pricing to meet demand. For example, commercial realtors Kabbash, Fox & Gentry recently reduced their 422 East Main Street property to $10 per square foot from $14 per square foot.

However, price reduction is an option dependent upon the specific space, says Kahn, referencing his agency’s listing at 104 East Main Street, which has received “quite a number of inquiries” without reducing the price from $17 per square foot. 

Benford still sees the general increase in vacancies as a concern that deserves attention from the city. He cites tax credits, low-interest loans, and hiring a full-time business developer (the DBAC is run on a volunteer basis) as ways other cities have actively worked to improve business. 

Currently, the Office of Economic Development serves more as a liaison between property owners and potential tenants; its mission is “to serve as a catalyst for public and private initiatives.” According to Engel, budget constraints limit the city in providing more direct assistance to local businesses. “I’m sure we could do more with additional resources,” he says. “With this level of sustained vacancies, it might become more of a priority.” 

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On February 3, Judge Daniel Bouton of the Orange County circuit court heard arguments from attorneys concerning the proposed Wal-Mart to be built on Route 3 near Fredericksburg, on the hillside that overlooks the Wilderness Battlefield, where 29,000 casualties were sustained during the Civil War.

“We as preservationists can’t move the Battlefield,” argues Zann Nelson, spokesperson for the Friends of the Wilderness Battlefield (FOWB). “They can re-locate a building that hasn’t even broken ground yet.”

The special-use permit was approved by the Orange County Board of Supervisors 4-1 in August, after which time the FOWB, the National Trust for Historic Preservation and six Locust Grove residents filed suit against the Board, claiming that its decision to grant permits was arbitrary, lacked valid recommendation from the planning commission and that the zoning fails to comply with state code.

Sharon Pandak, an attorney representing Orange County, argued that the plaintiffs had no standing to bring suit against the Board, and what their case ultimately boiled down to was that “the board didn’t listen to ‘them.’” Robert Rosenbaum, attorney for the plaintiffs, argued that the Board failed to consider dozens of recommendations from planners and experts, as well as the Governor and the House of Delegates.

“This is about traffic, noise and pollution,” Rosenbaum told reporters on February 3. “Real concerns for someone near the project and cause for study.”

“Even if you take their complaint at its very best,” says Pandak, “all it shows is another school of thought for that piece of property.”

But preservationists aren’t giving up that easily. “We have no axe to grind with Orange County, the Board of Supervisors or even Wal-Mart,” says Nelson. “We are opposed to any super-structure of this profile on this location.”

Established by an Act of Congress in 1927, the Wilderness Battlefield is part of the Fredericksburg and Spotsylvania National Military Park (FRSP). The park-owned portion of the Battlefield comprises 2,774 acres, and offers visitors driving tours, walking trails, and tours of the Ellwood Manor, its lone remaining structure on Wilderness.

“If you ask residents if they want a Wal-Mart,” says Nelson, “the answer will be a resounding ‘yes’. But ask them if they’d rather have a Wal-Mart closer to the town of Orange or at the Wilderness Battlefield, and you might get a different answer.”

Judge Bouton must first rule on whether the plaintiffs have standing to even bring this case to trial. Pandak’s first move was to file a demurrer calling for dismissal. She argues that even if what the plaintiffs say is true, the Board of Supervisors was well within its rights to grant Wal-Mart its permits, and that there are no legal grounds for the case.

“As far as the matter of standing goes,” argues Nelson, “one of the elements of Virginia code is that you have a monetary investment in the outcome. Well, for 15 years the FOWB has had a formal agreement with the National Park Services to manage the Ellwood Manor. We have an investment of almost $600,000 raised, which we are responsible for, and which we’ve put back into that house to allow it to be offered to the public as a place of history.”

After hearing arguments from both attorneys for more than three hours, Judge Bouton handed down no opinion on the matter, admitting that it could take several weeks until a final decision is made. 

C-VILLE welcomes news tips from readers. Send them to news@c-ville.com.

After Albemarle County executive Bob Tucker finished his hour-long budget presentation for Fiscal Year 2010-2011—the proposed grand total is $293.85 million, for you eager readers—he asked members of the Board of Supervisors if they had any “general questions.” Board chairman Ann Mallek responded first: “Sobering news.”

Likely, plenty of tax payers will pore over Tucker’s 240-page budget recommendations to sober up for the first public hearing on the recommended county budget, scheduled for March 3. The budget—available in its entirety online at albemarle. org/budget and covered on c-ville.com last week—arrives at $10.3 million less than last year’s adopted budget. And while a drop in real estate assessments and a tax rate of 74.2 cents per $100 will likely lower taxes for a majority of county residents, the recommended budget also includes those other, less pleasant types of reductions. 

While county schools are slated to receive 61 percent of expenditures, the state is still considering changes to the composite index that determines school funding. 

“Remember, state funding is a moving target,” says Peter Wurzer, director of research for the Albemarle Truth in Taxation Alliance, about education funds. “Every time you turn around, it’s going down.”

Twenty-three additional government staff positions will be eliminated, frozen or offset, making for a total of 78 positions suspended in some form or another since 2007—a return to 2002 staffing levels. Five police officer positions remain frozen. Both the Scottsville and Crozet libraries would see 5 percent cuts, county beaches would see reductions in operating hours, and Albemarle’s Capital Improvements Program would stick solely to maintaining infrastructure.

Wurzer says that concern over the county budget is “something that really has to bring us back to virtually questioning every assumption that we make when it comes to spending.”

“If you’re going to ask me the obvious question of what I think the tax rate should be, frankly I don’t know,” he adds. “That’s what this budget process is all about.” 

C-VILLE welcomes news tips from readers. Send them to news@c-ville.com.

It’s been a tough couple of weeks for Patricia Kluge and husband William Moses. To wit: The couple is involved in a lawsuit and a foreclosure sale, and the price of their Georgian-style estate has been slashed in half.

Let’s start with the lawsuit. Last Friday, Albemarle County Circuit Court Judge Thomas H. Wood decided that a $1.9 million breach-of-contract lawsuit brought by real estate agency Frank Hardy, Inc. against Vineyard Estates, LLC—a concern of Kluge’s and Moses’—would advance to an April 2 trial date.* Hardy filed the suit in February 2009 after Vineyard Estates contracted another real estate firm, Sotheby’s, on two listing agreements inked by Hardy and Vineyard Estates in 2007.

Attorneys for Vineyard Estates say that a series of e-mails in April 2008 acted as a termination agreement that would release Hardy from his role in exchange for $25,000. 

“When they dismissed Frank Hardy, there was some discussion about a settlement and they claimed that that discussion can constitute a legal settlement in the case,” says D. Brock Green, Hardy’s attorney. “And we claim it does not, that there was never any kind of meeting of the minds that they would pay a certain amount of money by a certain time and that Frank Hardy would therefore release his rights under both of the contracts.”

Ronald Tweel, attorney for Vineyard Estates, disagrees. After the hearing, Tweel said that his client would be “open to all possibilities,” as far as out-of-court settlement goes. In the event the case goes to trial, Green says he will bring “many witnesses” to testify. Both sides agree that no money—neither a $25,000 termination fee nor the $1.9 million that Hardy now seeks—exchanged hands.

The recent Kluge-Moses financial woes don’t end there. A foreclosure sale for Lot 5 of the Meadows Estates was held on Monday in front of the Albemarle County Circuit Court. The property is assessed at $2.7 million, and the auction required a deposit of $360,000 from interested bidders. (For a recap of the foreclosure sale, read the This Just In blog at c-ville.com.)

In a prepared statement, Kluge Estate Winery and Vineyard spokeswoman Kristin Moses Murray says the sale “is on only one of the 24 lots and will reduce the debt overhang for purposes of reconfiguring and restructuring the full project for Kluge’s future development interests.

“Like most real estate projects, it was developed with partners,” continues Murray’s statement. “As a result of the collapse in the real estate market, some of those other partners went bankrupt, and many of the remaining investors abandoned their continuing obligations. In short, they have gone under and we have not.” 

Anyone looking for signs of collapse on the real estate market need look no further than Patricia Kluge’s local estate, Albemarle House. In October, the estate was put on the market for a nearly record-breaking $100 million. The 300-acre estate—complete with barn, a guest house, eight bedrooms and 13 bathrooms—is now listed by Sotheby’s International Realty at $48 million, a price reduction of more than 50 percent.—with additional reporting by Cathy Harding

C-VILLE welcomes news tips from readers. Send them to news@c-ville.com.

*Clarification: A previous version of this story read "…Vineard Estates—Kluge and Moses…"

While both the city and county continue to grapple with unprecedented budget cuts—especially within their school systems—University of Virginia administrators are trying to capitalize on the positive outcome of the recession: competitive construction prices.

In fact, during last Thursday’s Board of Visitors (BOV) meeting, the BOV finance committee approved a plan to accelerate the construction of Phase IV of the Alderman Road Housing Project—a fifth dorm building, expected to open in the fall of 2014, priced at $30 million. The first phase of the project, Kellogg House, was approved by the board in 2005 and opened to students in the fall of 2008. Phase II buildings are expected to open in May 2011, followed by Phase III in 2013. 

The finance committee also approved the renovation and expansion of Newcomb Hall Dining. The project, estimated between $16 million and $18 million, is designed to add 45 percent more seating capacity, about 500 additional seats, to the second floor dining area. On the first floor, the plan calls for additional retail spaces and the renovation of existing ones. 

“We are going to take advantage of the opportunity to make it a more efficient space, make it a little bit more inviting for people,” said Colette Sheehy, UVA vice president for Management and Budget. 

University Architect David Neuman told the board that the Newcomb Hall landscape will also be improved, and the terrace area will have a green roof with access via the Newcomb ballroom. Another $15 million renovation of student spaces in Newcomb Hall is planned, “so there is a good opportunity to coordinate these two projects together and have them maximize the benefit for the student spaces,” said Sheehy. 

Competitive pricing aside, UVA’s present and future construction plans have contributed to a rise in energy consumption. Cheryl Gomez, director of energy and utilities, told the board that UVA’s carbon emissions currently stand at 325,000 tons annually. Projected emissions for 2020 total 412,000 tons. 

“We would like to go down and stay at about 260,000”—20 percent lower than the 2008 levels, according to Gomez. “We have a 152,000 ton challenge in front of us.”

C-VILLE welcomes news tips from readers. Send them to news@c-ville.com.