Could tax rebate seal Waterhouse deal?

 Thanks to actions last week by Charlottesville City Council and the Board of Architectural Review (BAR), architect Bill Atwood’s Waterhouse project has quickly thawed from glacier to geyser. One day after council unanimously signed off on its first resolution for a tax increment financing rebate—don’t worry, we’ll explain it in the third paragraph—the BAR approved Atwood’s six-story redesign with a 6-1 vote and a few conditions.

The latest Waterhouse design—featuring two parking garage entrances on South Street, and a partially recessed presence at 216 Water Street—will appear before the BAR again for approval of color and a glass column that links the structure’s two main buildings. With the majority of the BAR wooed by Waterhouse’s latest look, Atwood can focus on courting WorldStrides, an Albemarle County student-travel business, as his anchor tenant. 

Now, about that tax increment financing (TIF). Approved unanimously by council, the TIF resolution guarantees that the city will offer Atwood a 50 percent cut of real property tax revenue that can be attributed to Waterhouse and its occupants for five years. The property’s tax base is assessed pre- and post-construction and “the difference…is considered the taxes attributable to the new development,” according to the resolution. (The site is currently assessed at $2.8 million.) The developer must secure all funding—in this case, a $20 million cost—and see the project through construction to receive the TIF rebate.

Aubrey Watts, director of the city’s Economic Development Authority, said the EDA previously received inquiries about TIF funds for projects, but such a model did not seem necessary before Waterhouse.

“In this case, I think it is really a function of three things,” said Watts, who cited the national economy’s impact on loan practices, availability of urban sites and parking costs in the city. Parking proved the most difficult issue for Waterhouse, according to Watts. WorldStrides employs more than 200 people, and would likely overwhelm the 100 or so parking spaces provided by Waterhouse’s garage space while adding more cars to the scramble for spaces Downtown. Atwood said TIF funds could potentially be used for buying or renting more parking spaces Downtown.

“It was clear that if we did not provide something, the proverbial bottom line of the project was just not going to work,” said Watts. He added that the city might consider TIF for future developments, but would decide on a project-by-project basis.

After approving the resolution for Waterhouse, city councilors told local media last week that they would consider using TIF in the future.

“If, by using a TIF, we’re able to land this deal, for the first five years we’ll be receiving somewhat less revenue,” said Mayor Dave Norris. However, Norris added that “the kind of economic activity that will generate Downtown will more than make up for that small amount of foregone city revenue.”

Reached for comment on TIF and local development, Landmark Hotel owner Halsey Minor told C-VILLE that he “never asked the city for help,” and did not have the experience to say whether local developers should pursue such a rebate in the future. Atwood’s project, then, is a sort of guinea pig for the program, which he called “the perfect solution for us.”

“As of right now,” Atwood told C-VILLE, “we’re very efficiently parked.”

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