Author: paul-fain

Charlottesville now has a direct link to a genuine political scandal in Washington.

   The high-profile fiasco features a corrupt defense contractor, illegal campaign donations, multimillion dollar bribes, a yacht and the tearful downfall of Randall “Duke” Cunningham, a Republican congressman from California. And on February 24, a surprise guilty plea by the former CEO of the defense company detailed the role of Representative A, also known as Virgil H. Goode Jr., who represents Charlottesville in the U.S. House of Representatives.

   In pleading guilty to felony election fraud and three other criminal counts, Mitchell J. Wade, owner and CEO of the defunct MZM, Inc., admitted to giving Goode $46,000 in illegal campaign contributions in 2003 and 2005

   Goode, although not named by federal prosecutors, is easily identifiable in the court documents.

   In a written statement, Goode said he was “shocked and amazed” by the details of Wade’s plea agreement, and that he “had no knowledge that any of the contributions by MZM persons to our campaign were illegal.” Goode did not respond to
C-VILLE’s questions, faxed at his request, by press time.

   Prosecutors say Wade did not inform Goode or his staff that the contributions were unlawful. However, the court documents also show how the campaign money came with strings, albeit legal ones. In the spring of 2005, Wade asked Goode to steer federal funding to an MZM facility in Virginia’s Southside, which is in Goode’s district.

   Months later, Goode’s office “confirmed to Wade that an appropriations bill would include $9 million for the facility and a related program,” the court documents state. Wade, whom Goode refers to as “Mitch” in his statement, “thanked Representative A and his staff for their assistance.”

   The court proceedings thus far indicate that Goode broke no laws, neither by receiving tainted campaign checks nor by securing federal contracts for MZM. Several news reports speculate that Goode is not a target of further investigations.

   However, Goode’s association with the lurid scandal could hurt his political fortunes. The affable Goode is immensely popular throughout most of the huge Fifth District, which is roughly the size of New Jersey, having won at least 63 percent of the vote in the last two elections. Even the two Democrats who are vying for his seat say the MZM affair will not be enough, by itself, to sway voters away from Goode. But it may have tarnished his squeaky clean image.

   “It shatters this vision of innocence… how he’s one of them,” says Al Weed, the Nelson County winemaker who was thumped by Goode in the 2004 election. “He put his hand in the cookie jar and he got caught.”

 

Scandal? What scandal?

Goode has received a load of unwelcome publicity in the wake of Wade’s guilty plea, from media outlets across Virginia and the nation. And the MZM affair has become part of the rallying cry to combat sleaze on Capitol Hill, particularly relating to “earmarking”—the practice of slipping money into legislation to benefit hometown projects or specific companies.

   Calling campaign contributions “legal bribes,” Washington Post columnist Ruth Marcus recently wrote that the money Wade and MZM gave to Goode—at least $90,000 since 2003—was a “real bargain” because it netted a $9 million contract.

   Goode’s name is now permanently linked to the MZM debacle and, by extension, to other Washington ethics scandals, such as the furor around lobbyist Jack Abramoff, which is currently dogging Tom DeLay, the former majority leader in the U.S. House of Representatives. The details of the “Duke” Cunningham case are particularly titillating.

   Wade, the shady MZM CEO, “showered” the California Republican, who resigned in November after pleading guilty to taking $2.4 million in bribes, with checks, cash, rugs, antiques, and the use of a yacht and Rolls Royce as part of the payout, according to prosecutors. Among the more absurd gifts were two antique “period” commodes dating from the mid-19th century, one with a $7,200 price tag. In exchange for the fine living perqs, Cunningham pulled strings for MZM from his perch on the defense appropriation subcommittee.

   Cunningham blubbered at the podium when he announced his retirement. But his lawyers’ argument that the former “Top Gun” Navy fighter pilot was depressed and suicidal didn’t sway a federal judge, who on Friday sentenced Cunningham to eight years in prison.

   In addition to Cunningham and Goode, Wade’s guilty plea pointed to Katherine Harris, a Republican Congresswoman from Florida who rose to fame during the Florida recount of the 2000 presidential election. Harris received $51,000 in illegal campaign funds from Wade. And, like Goode, she was unaware of their illegality, prosecutors say.

   Goode has by far the lowest-profile name in the scandal. But despite Goode’s brush with wonkish infamy, it will probably take more than a confusing Capitol Hill imbroglio to take down the entrenched, five-term incumbent.

   James H. Hershman, a professor at Georgetown University and expert in Virginia politics, thinks only revelations that Goode knowingly broke the law could force the popular congressman out of office. After all, he says, many of Goode’s constituents will see his dealings with MZM as being just that of their loyal Congressman trying to bring much-needed jobs to the Southside.

   “He’ll probably survive it politically,” Hershman says.

   Tucker Watkins, the Fifth District’s Republican chairman, agrees, predicting that the MZM case will have no impact on Goode’s run in Congress.

   “You’re talking about a guy who’s worked hard to bring jobs into the District,” Watkins says. “I think they’re barking up a real bad tree on this one.”

 

An instrumental role

Virgil’s name is beyond big in the Fifth District, with family roots that go back at least 150 years and a father, Virgil H. Goode Sr., who was “almost a folk figure” around the Southside, says Hershman
at Georgetown.

   Goode Sr. was a charismatic Common-wealth’s Attorney in Franklin County who sometimes sported a coonskin cap. In the rural county, which has long been home to fiercely independent bootleggers, Goode Sr. had a reputation for cutting across the grain, even sometimes opposing the Democratic machine of State Senator Harry Flood Byrd. As evidence of his popularity, a municipal building and stretch of highway in the Franklin County are named after Goode—the elder one, that is.

   In many ways, the younger Goode has followed in his father’s footsteps. He was elected to the House of Delegates at 27, shortly after graduating from UVA Law School. In both Richmond and Washington he developed a reputation as a man of the people (despite a net worth of between $1.2 million and $3.3 million). His office in Rocky Mount is rickety and his car has 270,000 miles on it, according to Watkins.

   At political events, Goode is completely at ease while mingling with constituents. Everyone, it seems, knows him as “Virgil.” And even his political opponents have a hard time finding something nasty to say about him.

   Goode has also cultivated an image as an independent. Like his father, he began his career as a Democrat. But he became a Repub-lican in 2002, after a two-year stint as an In-dependent. Goode’s voting record is clearly conservative, but does not rank him among the most stridently partisan of Republican lawmakers, nationally or in Virginia.

   Goode has even stood up to the big dog of the Republican Party: the Bush Administration. In 2004, he landed national press and praise from many along the old Tobacco Road in the Southside for opposing the president’s opposition to the tobacco buyout.

   Perhaps the most valuable aspect of Goode’s political image is the perception that he fights hard to bring home money and jobs. Much of the Fifth District was hit hard by the drying up of the tobacco and textile industries. Many Southsiders see Goode’s seat on the House Appropriations Committee as a lifeline, particularly given his influence as part of the Republican majority.

   Rev. Cecil Bridgeforth of Shiloh Baptist Church in Danville told C-VILLE during the 2004 election season that when federal money comes to the Southside, “people think he’s ridden in on this white steed and he’s given us this money.”

   Goode was trying to fill precisely this role, at least in his public machinations, through his relationship with MZM.

   In 2003, after a wave of recent layoffs, Martinsville led Virginia with a whopping 16 percent unemployment rate. So it came as extremely welcome news when, in November 2003, Goode joined then Governor Mark R. Warner in announcing that MZM planned to locate an intelligence facility in an abandoned building in Martinsville.

   The contract that funded MZM’s venture in Martinsville, called the Foreign Supplier Assessment Center, which was to scrutinize foreign products and services purchased by the Pentagon, came from a $3.6 million earmark and “pet project” that Goode championed. State officials referred to the Martinsville facility as “Project Goode.” In a press release announcing the deal, the governor’s office praised Goode for being “instrumental in securing this project,” which was to create 150 jobs within three years.

   But as C-VILLE noted in July 2004, Goode’s influence with MZM was a two-way street. MZM’s political action committee, its employees and their immediate families, gave Goode $48,551 in the 2003-04 election cycle, according to the Center for Responsive Politics. Mitchell Wade’s D.C.-based fiefdom was by far Goode’s biggest campaign donor, more than tripling the next highest donation.

   Wade’s fortunes began to unravel in June 2005, when a reporter with Copley News Service blew the whistle on a dirty real estate deal Wade arranged for Cunningham, the California Congressman. Liberal bloggers, including local Waldo Jaquith and Joshua Micah Marshall, quickly pounced on the cozy Goode connection with MZM, with state and national media subsequently reporting that Wade may have coerced campaign donations that he gave to Goode.

   It wasn’t until Wade’s guilty plea of last month that the details of the illegal campaign contributions to Goode and Harris were made public. The scheme was fairly simple: In an effort to gain favor with Goode, Wade wrangled contributions to Goode’s campaign out of his employees and their spouses. He then reimbursed them for the donations, rendering them illegal. In Washington parlance, these are called “straw contributions.”

   Wade did not tell Goode that the checks were procured through illegal means, according to Goode and prosecutors. Goode, in his written statement, said he offered to refund donations from anyone with ties to MZM. Two donors accepted his offer. He has also donated the total amount of MZM donations to “charities and non-profits such as volunteer rescue squads, volunteer fire departments, and SPCA-type entities.”

 

Fall fireworks

Hershman says it would be “astonishing” if any allegations of corruption on Goode’s part were to emerge in the Wade probe. His theory of why Goode decided to play ball with Wade, a suspicious character even in the murky world of defense spending, came from a deep desire to help the Southside.

   “If there’s a failing, it’s a failing of the heart,” Hershman says. “Had the need not been there, so desperately, I’m not sure he would’ve dealt with the guy.”

   Both Weed and Bern Ewert, a Charlottesville resident and former Roanoke city manager who is also seeking to challenge Goode as a Democrat, scoff at the suggestion that Goode didn’t know what he was getting into with MZM.

   “I think Virgil has lost his way,” Ewert says. “He should have known the difference between a good deal and a bad deal. There are some deals you have to walk away from.”

   Weed stops well short of blaming the illegal campaign funds, a small part of Goode’s sizable war chest, for leading to his defeat in the 2004 election.

   “I got beat by a handy margin,” Weed says.

   But Weed says the repercussions of Goode’s involvement with MZM are not over. He asks where the $9 million earmark came from, wondering if it substituted for other defense programs, like body armor in Iraq. Furthermore, Weed says, the MZM facility in Martinsville could end up being costly for that financially strapped town.

   MZM was sold to a private investment firm, and its future is unclear. If the Pentagon decides the Martinsville jobs are unnecessary hometown pork, they could shutter the facility. Taxpayers fronted $500,000 to lure MZM to town and could be left holding the bag if those jobs dry up.

   “It may hurt us far more than it helped us,” Weed says of the sweetheart deal Goode helped arrange with MZM.

   Whether or not national interest in the MZM scandal ends with the sentencing of Wade and Cunningham, it’s clear that whoever runs against Goode this fall will hammer him with the sordid details. Weed says it proves Goode “cut ethical corners” on the job in Washington.

   It’s too early to tell whether Goode’s constituents care about the scandal. Watkins of the Fifth District Republicans says people will view efforts to equate Goode with Cunningham or Wade as nothing but partisan attacks.

   “Virgil Goode has a 33-year record in public office,” Watkins says. “Almost nobody questions Congressman Goode’s integrity.”

 

 

Project Goode: A timeline

  It took Virgil Goode only two years to turn a $48,000 campaign donation into
a $9 million defense appropriation for MZM

 

Undisclosed month, 2002. MZM, Inc. lands Pentagon contract for workers and computer assistance for the U.S. Army’s National Ground Intelligence Center, located in Charlottesville, part of Virgil H. Goode Jr.’s Congressional district.

 

Undisclosed month, 2003. Goode arranges for an initial federal outlay of $3.6 mil-
lion for MZM to create an intelligence facility in Virginia’s Southside, also part of his district.

 

March 2003. At MZM’s Washington, D.C. office, company founder and CEO Mitch-ell J. Wade pays for and collects illegal contributions to Goode’s campaign.

 

October 2003. Goode contacts Virginia officials about creating the new MZM facility, to be called Foreign Supplier Assess-ment Center, in downtrodden Martins-ville, located in Goode’s district.

 

October 2003. State officials begin referring to the effort to bring MZM operations to Martinsville as “Project Goode.”

 

November 2003. Wade, Goode and former Virginia Governor Mark R. Warner announce the deal for the new MZM facility at a ceremony in Martinsville.

 

November 2004. Goode easily defeats Al Weed, a Democratic challenger, in his re-election bid, receiving 64 percent of the vote. His biggest campaign donor, MZM, gave him $48,511 during the election cycle.

 

March 2005. Wade collects illegal campaign donations from MZM employees in the company’s Washington, D.C. office.

 

Spring 2005. Wade asks Goode and his staff to request appropriations funding for the Martinsville facility.

 

June 2005. Goode’s staff confirms to Wade that an appropriations bill would include $9 million for the facility and a related program. Wade thanks Goode and his staff.

 

June 2005. A reporter with Copley News Service in San Diego publishes story on a real estate deal in which Wade floated $700,000 to Rep. Randall “Duke” Cunningham, a California Republican.

 

Fall 2005. As news media begin to probe Goode’s relationship with Wade, Goode offers to reimburse MZM employees and their spouses for donations. Two accept.

 

November 2005. Cunningham tearfully re-signs from office, after pleading guilty to accepting $2.4 million in bribes.

 

February 2006. Wade pleads guilty to four criminal counts, including felony election fraud. Prosecutors detail how Wade funneled $46,00 in illegal campaign contributions to Goode.

 

February 2006. Goode releases a written statement in which he says he was “shocked and amazed” by the details of Wade’s guilty plea. Goode says he had no knowledge that the MZM donations were illegal.—P.F.

 

Sources: C-VILLE reporting, U.S. District Court for the District of Columbia, USA Today.

A violent encounter at Friendship Court on the night of Saturday, August 21, between two white Charlottesville police officers and Kerry Cook, a black wanted man, ended with one of the cops firing a single shot into Cook’s stomach—that much eyewitnesses and the police department agree upon. But what happened during the struggle off Garrett Street, which left Cook in a coma at the UVA Medical Center, has left residents of the public housing complex on Garrett Street, and, perhaps, a large segment of Charlottesville’s black community, disturbed, confused and angry.

Charlottesville Police Chief Timothy Longo and City Commonwealth’s Attorney Dave Chapman are keeping quiet about the incident, citing an ongoing investigation, though Longo has issued a few paragraphs about the Friendship Court shooting in several press releases to the media.

But while City officials are tight-lipped, eyewitnesses to the shooting and many members of the black community are speaking out loudly, saying around 100 Friendship Court residents, including many children, saw police officers William Sclafani and Jeremy Carper severely beat Cook, who was resisting arrest, before getting one handcuff on him, dragging Cook into an apartment and then shooting him.

Chapman says the shooting was the first involving City police since a fatal incident in December 2002, in which Jonathan Jermaine Breeden, 23, shot himself in the head during a shootout with police near 800 Page St. Police were later deemed to have acted appropriately in the gunfight, Chapman says.

Charlottesville police have said that during the struggle with Cook, “both officers used escalating levels of force in an attempt to bring him under control. Ultimately, Officer Sclafani fired a single gunshot that struck Mr. Cook, thus bringing the violent confrontation to an end.”

The shooting was not Sclafani’s first encounter with Cook. C-VILLE Weekly has learned that Sclafani arrested the 33-year-old Cook in July 2003 for assault and battery. According to the arrest warrant, Cook, who has a lengthy rap sheet, was living in Kents Store, which is in Fluvanna County, at the time of the arrest. Sclafani arrested him for the assault and battery of Sanitha Grooms, with whom Cook had lived for years. The case was later waived.

Commonwealth’s Attorney Chapman says he can’t discuss whether Sclafani’s previous meeting with Cook is under investigation, or any other case specifics until the ongoing investigation is completed. Chapman says a lab in Richmond must analyze forensic evidence, which could tack time onto the investigation.

“It can be a matter of months. We hope to move things along faster,” Chapman says.

Word has traveled fast around Friendship Court, however. And according to Mary Carey, who witnessed the incident and is the president of the Friendship Court Neighborhood Association, the strong consensus among her neighbors is that Sclafani and Carper used excessive force while trying to subdue Cook.

“The way they were beating that man back and forth, it was ridiculous,” Carey says, while demonstrating the baton swings in her tidy ground-floor apartment, approximately 75 feet from the site of the shooting. “You could hear the whacks with every blow.”

Carey, a 22-year resident of Friendship Court, says she was drawn out of her apartment that night by screams coming from outside of the adjacent apartment building where Grooms, Cook’s former live-in girlfriend, was residing.

According to Carey and Lolita Smith, a former Friendship Court resident who was at the complex on the night of the shooting, Grooms had occupied the Friendship Court apartment for about a month. They say Grooms told them that she told a drunk Cook to leave her apartment out of fear that he would cause trouble and get her evicted. When he wouldn’t leave,

Grooms called the police, according to both witnesses and the department.

When the two officers arrived, the violence erupted. After the single shot was fired, the complex was swarmed by police officers, some of whom were toting pump-action shotguns, according to Smith and Carey. Smith says she whisked Grooms and her baby daughter out of the apartment amidst the chaos.

On Sunday, August 23, Friendship Court was quiet, with Smith calling the atmosphere “the calm before the storm.”

Though Carey says police detectives interviewed residents on Sunday and Monday, she says the police presence has been minimal after that initial flurry.

“They won’t have anything to do with us,” Carey says of City police.

Mayor David Brown and Kendra Hamilton, a City councilor, came to Friendship Court to speak with neighbors on Sunday, but no other meetings between residents and City officials have been scheduled.

“People are definitely upset,” Brown says. “It is a tension. To some degree, it’s unavoidable.”

However, Brown says he supports Chief Longo’s decision to keep his public comments about the shooting minimal until the facts emerge from a full investigation.

Deborah Wyatt, an attorney who has challenged local police in lawsuits, including a recently filed suit over the Department’s DNA dragnet, also thinks Longo is handling the situation correctly.

“Even despite the public clamor, I think it’s worth doing the responsible thing,” Wyatt says.

But back at Friendship Court, residents’ trust in the police force has suffered a heavy blow.

Asked how long it might take to win back trust in her community, Smith says, “It’s going to take a long time.”

“It makes you wonder,” Carey says of the shooting and the DNA dragnet. “Is it safe to walk up to a police officer and say ‘hi’ and not be afraid he’s going to pull his gun out and shoot you?”

The scene is straight out of a junior high dance. Though the pack of would-be dancers at R2, a relatively new Downtown club, are clutching beers and cocktails rather than punch, and the average age is at least mid-’20s, the knots of young women and lone men stick to the walls and stare into their drinks with the same intensity as a class of gangly teenagers in the early moments of that awkward social in the school gym. A guy with a stylish goatee, white sneaks and matching blue shirt and pants, both tight—the whole get-up resembling that of a clubbing auto mechanic—sits forlornly at a high-top table, his head resting on one hand. He nods listlessly and looks as if he might fall asleep.

 Fortunately, Stroud, the DJ up in the booth, has a new secret weapon. Though he’d created the tune just the day before at his home studio on Cherry Avenue, he’d cleaned it up before this Friday night, and was convinced he had something special to drop on the reluctant dancers around midnight, just as the club started to fill up.

 A dance club works a little like an atomic bomb. To get the floor bumping, the club has to achieve a precise mixing of elements, just as an atomic bomb’s uranium achieves its critical mass by the addition of another radioactive element—the trigger. In the club, the critical mass involves the right density of dancers, the heavy element of a big beat—one that gets people bouncing around the room—and some form of catchy hook. Tonight, as he has been in so many dance clubs so many nights before, that hook is Michael Jackson.

Billie Jean is not my lover

She’s just a girl who claims that I am the one

But the kid is not my son 

 As soon as the unmistakable lyrics grace the booming beat Stroud constructed, the floor starts to move. A tight cluster of three women gleefully storms the floor and begins furiously shaking it—quickly attracting an extra layer of Brut-splashed males. Within two minutes, the dance space, the dimensions of which are like a large racquetball court, is almost full. Even the mechanic guy is out of his seat, his white shoes flashing under the flickering lights.

 Stroud himself comes out of the booth, down the stairs, and stands in the middle of the floor. To the casual observer, the motionless DJ with blue eyes, red, spiky hair and a goatee might appear somewhat menacing as he stands with his arms crossed. One might even think that he’s striking a “Behold, I am lord of the dance!” pose. But Stroud, who is 38 years old but still gets carded, is merely taking advantage of the best spot in the club to absorb the huge sound system’s full blast to see if he’d mixed the tune cleanly.

With the exception of the vocals, the “Billy Jean” remix is all his creation. The bluntly confident yet unpretentious Stroud thinks the song has potential, and hopes to get it out on the Web. But, he admits that its appeal is not all his doing.

 “Everybody loves Michael, man,” Stroud says.

 

A tribe called who?

Electronic dance music is the red-headed stepchild of Charlottesville’s sonic landscape, having been virtually choked out by folk music, ubiquitous jam bands and the MTV-fueled popularity of hip hop. This is, after all, The Dave’s town. Why mess with a good formula? Most other nighttime music acts pale against the shining light of guitar-driven music, with the notable exception of the Goth scene.

 Stroud is likely the most experienced DJ in a 100-mile radius, and has had many legitimizing moments in his long career at the decks. Back in ’96, after he’d been spinning for only six months, Stroud played at Buzz, a legendary D.C. rave that was the biggest regular dance party in the United States before it was busted in an infamous Fox 5 investigative report that captured drug use and—yikes!—massages on hidden cameras. For a longtime professional DJ like Stroud, playing dance floor psychologist to a resistant audience can be a spirit-crushing experience.

 “Nobody likes progressive house here,” Stroud says, referring to his specialty in the booth. “Being a music fan, it’s tough. These people want to hear something they’ve heard over and over.”

 House music isn’t the only genre in a DJ’s arsenal that gets the cold shoulder from Charlottesville’s club denizens. Hip hop, which currently rules the world of pop, is only a safe bet if it’s in heavy rotation in music videos or on the radio. Mike Rodi, co-owner (and founder) of R2 and Rapture, the restaurant that envelops it, says a classic hip hop hit by A Tribe Called Quest or De La Soul is a guaranteed buzz-kill unless it’s “sandwiched” between Missy Elliott, Jay-Z or some other mega-star.

 “You have to win them over with the stuff they know,” says Rodi, who sometimes spins at R2 under the moniker Sketchy.

 “Some of my most despairing moments are when I put on something I think is really great and I clear the floor with it,” he says.

 Stroud once played OutKast’s “Hey Ya!” shortly after the song’s release. Though “Hey Ya!” has become one of the most overplayed tunes in recent years, it was a complete clunker at the club that night.

 These days, the surefire club rocker is “Milkshake” by Kelis. The simplistic pop ditty is the audio equivalent of crack cocaine—a cheap, but deadly addictive rush.

 

My milkshake brings all the boys to the yard

And they’re like, it’s better than yours

Damn right, it’s better than yours

I can teach you, but I have to charge

 

 If those lyrics don’t ring a bell, you don’t go out much.

 On this recent Friday night, Stroud plays a version of “Milkshake” a few songs before his “Billy Jean” remix. Though it definitely creates some energy, even getting the sleepy mechanic to jiggle in his chair, it fails to push the R2 crowd over the dance tipping point.

 The next night at R2, Stroud rearranges the set’s order. A few songs into his set, he drops “Billy Jean” and again gets people on their feet. Then, he immediately spins “Milkshake” and takes the club up another notch.

 Stroud’s version, it should be said, is a far cry from the cheese-laden original. He tracked down a remix with beats that sound like Tron on steroids, the thick pulse only softly adorned with a floating version of the sickeningly catchy vocals. In short, it’s a crafty mix of overplayed tripe with something legitimately underground. It works brilliantly, and Stroud can be seen smiling up in the DJ booth, which sits high above the dance floor, next to several Euro lounge-style tables and a couch on the second floor.

 There is one glaring absence on the floor this night. King George, the Charlottesville club fixture who is at R2 every Friday and Saturday, is hanging out by the bar rather than assuming his customary spot on the floor, bathed in dry ice and flashing lights.

 Asked if Stroud lost him with the night’s set, King George shakes his wig-sporting head, and points to his outfit, which, under the sequin-adorned fishnet shirts, includes various chains as well as a chain-mail codpiece.

 “I’m about 20 pounds heavier tonight,” King George says. “I’m not sure I’ll be doing much dancing.”

 A few feet from King George, two women peer through a gap in the wall between R2 and Rapture in an attempt to gauge whether or not to drop the $3 cover charge for entrance to the dance club. The women see a floor that is hopping for the second consecutive night and has, for now, accomplished Rodi’s goal “to sort of bridge the gap between MTV karaoke party and Manhattan.”

 

DJ exodus

Because electronic music is swimming upstream in Charlottesville, some local talent has left town.

 “It was tough for me to find a DJ spot in Charlottesville,” says UVA grad Mike Walker, who spins under the name Mike Brie.

 A hip hop “battle” DJ and scratch turntablist, Walker wiggles the vinyl to scratch out wickedly complex sounds while using the cross-fader, which controls the output from two turntables, to juggle beats and rhythms. The format for a DJ battle, which is directly related to the MC battles made famous in Eminem’s movie 8 Mile, feature two DJs trying to both out-spin and out-diss each other. 

 Walker, who arrived at UVA five years ago to get a master’s degree in computer science, found a cadre of fellow hip hop DJs who played at Tokyo Rose’s basement—which eventually took the microphone away from hip hop shows after a gunplay incident—as well as Orbit Billiards and the Biltmore Grill.

 But Walker says the scene dried up quickly.

 “For me, I didn’t really have any opportunities,” Walker says.

  Jeremy Kilmartin, a.k.a. Dingus, a hip hop/disco DJ from Providence, Rhode Island, who is living in Charlottesville this summer, also bemoans the dearth of DJ venues. Kilmartin says he was tossed from Atomic Burrito, a restaurant with an after-hours scene at which he had hoped to spin, on a recent weekend night for mocking an allegedly inept DJ.

 “It’s a rock ‘n’ roll town, completely,” Kilmartin says.

 Even a visit from a world-famous scratch DJ, Mix Master Mike, who has long performed with the Beastie Boys, was a flop locally. When Mix Master Mike played at Starr Hill last year, Walker says only about 50 other people showed up to hear the turntablist.

 Of his fellow local DJs—SHandz, Cobalt 60 and DJ Myson—Walker says, “they’ve all moved away, actually.” Last month, Walker also pulled up stakes and moved to Alexandria, in part because of the potential DJ gigs he could score in D.C.

 Walker recently won a regional DJ contest at a D.C. club, and will travel to Chicago for the finals in coming weeks—one of two well-known DJ competitions in which he’ll be spinning this summer.

 Asked what keeps Charlottesville’s club set from being open-minded about less poppy electronic music, Walker cites the overbearing popularity of jam bands, which “builds upon itself.” But he also mentions the lack of venues that cater to the underground, which is not just a local phenomenon.

 Since the glory days of rave culture, which peaked in the mid-’90s, electronic music has been pushed toward the mainstream. Once police, local governments and Feds started looking for ways to hit back at MDMA, the hug-drug known as Ecstasy, raves fell into the crosshairs. Widespread efforts to crack down on raves culminated in the U.S. Senate’s 2003 passage of the Reducing Americans’ Vulnerability to Ecstasy (RAVE) Act (nobody can touch Senators in acronym artistry). The law extends “crackhouse laws” to raves and holds rave organizers responsible for hosting parties at which drugs are present. If convicted, rave promoters can face big fines and 20 years in the slammer.

 The RAVE Act and other push-backs have forced most raves out of uncontrollable warehouses and such to legit and legal venues. As electronic music moved back toward clubs, it lost many of its younger followers. And, many argue, the music simultaneously became more poppy and watered-down. To make matters worse for house/techno and hundreds of subgenres, record companies have made a mint off commercial hip hop, stealing most of electronica’s thunder in clubs and leaving Gen X fans sitting at home listening to their stereos.

 “There’s been a retreat into the known,” Rodi says of the current music scene, while also conceding “there’s a lot of crappy electronica out there.”

 For Stroud, who has been making a living as a DJ since 1995, when he sold Stroud Designs, his Corner graphics, skate and surf shop, the backlash against electronica means going commercial to pay the bills. And though the tunes he spins to get R2 moving might make him occasionally roll his eyes, at the college parties, “I’ve got to stick with that really pop cheese, man.”

 

The way we were

It wasn’t always this way in Charlottesville. In fact, the town was on the map during rave culture’s peak for its ability to throw kick-ass warehouse dance parties.

 The godfather of the Charlottesville rave is Duncan Haberly. A Western Albemarle High graduate, Haberly, 37, promoted many legendary raves while attending UVA law school from ’93 to ’96. Haberly credits brothers Thane and Will Kerner for inspiring him to fire up the raves.

 “I personally believe that Charlottesville, for a period, had the best dance scene for a small town in the U.S.,” says Haberly, via phone from San Francisco, where he runs a contract renegotiation firm.

 Haberly’s first two raves, which he dubbed Krusty’s and Krusty’s II, in deference to “The Simpsons” clown and British raver parlance, were held at the former Splathouse on Grady Avenue in 1993. By all accounts, they were a huge success, with Haberly claiming attendance of more than 1,000 at each party.

 “That was a full-tilt party. We had kids busing in from New York, Florida and Ohio,” Haberly says of the first rave. “It put the taste for real electronic music into people’s mouths.”

 From there, Haberly went on to throw raves at the now-defunct Trax, the old Live Arts space on Market Street, a warehouse near the National Guard Armory on Avon Street Extended and a regular gig in the room in the back of the Jefferson Theater.

 “Hawes was awesome about it,” Haberly says of Jefferson owner Hawes Spencer. The large space, which has high ceilings, brick walls and hardwood floors, was perfect for the music.

 “The bass would just bounce off the ceilings and come back down,” Haberly says. For a further trippy enhancement, the Jefferson would project movies on the other side of the room—adding to the swirling lights in the room and giving dancers an entertaining break from the floor.

 But when the fire marshal paid a visit to the Jefferson in May 1994 and demanded, as Haberly claims, an $8,000 wheelchair ramp, “that put the kibosh on that.”

 Near the tail end of Haberly’s big-beat tour of Charlottesville, he teamed-up with Stroud to help promote the parties, often selling the tickets to secret venues out of Stroud’s shop. Both partners spun at the raves.

 “As soon as [Stroud] got involved, life got easier,” Haberly says, adding, “he’s absolutely carried on and put his own stamp on it.”

 Though Haberly is aware that underground electronic music has struggled in the years since he left town, he thinks Charlottesville is hardly alone in favoring bland, commercial dance music. Haberly even claims he moved from a thriving music spot to “a pretty terrible dance scene” in San Francisco.

 When told about R2, Haberly says, “if somebody’s opening a real dance club, we must’ve done something right.”

 

R2 detour

“The club is very much my baby, in terms of conceiving of, tearing my hair out and losing money,” says Mike Rodi, who came up with the idea for R2 in 2000.

 The club finally opened last November. Though several local venues had long played dance music, most notably the members-only, after-hours Club 216, which regularly packs the house with big beats, Rodi says R2 was intended to be home to house, trance, breakbeat and other forms of dance music that can’t be found anywhere around Charlottesville.

 “We’ve been able to do very little of that,” Rodi says of that original goal, adding that DJs are “discouraged by the amount of work they have to do to draw an audience in Charlottesville.”

 The space kicked off with a performance by Blowoff, a D.C. dance act featuring indie rock guru Bob Mould. Though the show was a hit, attendance petered out in subsequent weeks. Rodi says he once considered bringing Deep Dish, a jet-setting D.C. duo that is among the hottest house acts in the world and has produced tunes for the likes of Madonna, to R2 for a show. Though he admits that Deep Dish’s $10,000 price was intimidating, he says the big bucks weren’t what nixed his plan.

 “I could lose money, but I wasn’t prepared to take a loss on it and have an empty room,” Rodi says.

 All gloom aside, Rodi says things are picking up at R2. The weekend nights of pop dance and hip hop are bringing in a growing, racially mixed crowd and giving Rodi “a little more breathing space.” As a result, R2 has begun booking “stuff that doesn’t have a home in Charlottesville,” such as world beats, house music and acts like Laptopalooza, a lineup of diverse, tech savvy DJs that hit the club for a night of on-the-spot grooves on a recent Wednesday.

 Turntablist Walker, who as Mike Brie performed at R2 on July 10, calls the club “fantastic” and “long overdue.”

 “I am happy with the way it turned out,” Rodi says, adding that he thinks R2 is beginning to achieve the goal of “exposing people to music that they don’t hear everywhere.”

 “I’m glad that we have 216 and R2 here in Charlottesville,” says Arantxa Ascunce, who got down until 5am on a recent Saturday night at Club 216. Though Ascunce, 30, who has been in town for five years, says Charlottesville’s club options are certainly limited compared to her previous homes of Northern Virginia and Spain, she says, “at least there’s somewhere to go dance.”

 As for Stroud, the R2 shows are his main venue for now, as he no longer spins at Club 216. Though Stroud can test his tracks at R2, to really let his favorite sounds loose he relies on the music he mixes up at the home studio and that he plays on “Electronic Era,” his weekly radio show on WNRN FM 91.9, which runs after midnight in the first two hours of every Tuesday morning.

 On a recent Monday night, Stroud plays a remix he’s just begun of the newly released “Ch-Check It Out” by the Beastie Boys. Stroud’s home studio is filled with drum machines, mixers and keyboards, but most of his work is now done on a computer.

 “My gear is like nothing compared to what I can do with software,” Stroud says.

 With midnight approaching, Stroud packs up his two Pioneer turntables, which actually spin CDs, not vinyl, and his music in three metal-lined carrying cases, leaving all of his estimated 5,000 record albums at home.

 In the studio, he smiles regularly and bounces around while playing a set list of block-rocking house tunes, all of which are far darker and seemingly more layered and complex than his pop club tunes. He bleeds each song into the next by watching a digital display of the tracks’ sonic waveforms rather than by keying off of the grooves in the vinyl of record albums, as did the traditional disc jockey.

 While describing some of the more annoying behavior he encounters at gigs, including the question, “How can you not have the ‘Electric Slide’?” Stroud displays several of his tracks on Promo Only CDs, which is a track mine for professional DJs around the world.

 “Some DJ over in Europe” picked up one of his creations, Stroud says nonchalantly. Of the potential fame-maker of getting a track discovered by a DJ superstar like Digweed, re-mixed, and played for club kids around the world, he says “I’ve a had a couple close ones.”

 Stroud says bootleg versions of his music are getting picked up on the Internet. “Stuff’s happening now. If I keep with it, who knows?” he says. But if he never breaks through, he says, “I didn’t really plan to be a lifer, as a DJ.”

 In the meantime, he’s sticking with it.

 “I’m poor, but I get to do what I want to all week long,” Stroud says.

Among the 115 police officers of the Charlottesville Police Department, fewer than 10 actually live in the City. Soaring real estate prices have pushed many cops, particularly new hires, to homes in Greene County, Buckingham County, Lake Monticello or Waynesboro.

 “Charlottesville is a very expensive place to live,” says Sgt. Mike Farruggio, a 16-year veteran of the force who has lived in the City for eight years. “It’s very difficult to afford to buy a house in the City.”

 Indeed, the median sales price of a house in Charlottesville hit $196,000 in 2003, doubling the $98,400 median of 1997, and, for the first time in recent history, matching the median sales price for the six-county region. For a newly hired Charlottesville police officer, making the base salary of $29,250, a flip through the real estate section of the classifieds can be a grim experience.

 Police Chief Timothy J. Longo confirms that “housing is a big piece” of recruiting and retaining officers.

 And it’s not just cops. Teachers, hospital workers and UVA employees struggle to buy or rent an affordable home in Charlottesville and Albemarle County, a problem that inspired much hand-wringing during the recent City Council campaign. This week, a housing task force appointed by City Council will release a report intended to address the housing crunch.

 But though local officials are often harangued for not doing enough about affordable housing, it’s not an issue on which government alone calls the shots.

 “The marketplace is very complex,” says David R. Phillips, CEO of the Charlottesville Area Association of Realtors (CAAR). “I’m not sure you can blame this on anybody.”

 Furthermore, it’s not clear that there is a housing crisis, at least one that has any unique local causes. Though many lower-income residents here are sinking under big rents and face dwindling odds of homeownership, Charlottesville’s housing pickle is unexceptional.

And, as exemplified by recent wrangling over a large housing development on the City’s south side, one that involved the Fry’s Spring Neighborhood Association, of which Sgt. Farruggio is president, there are no easy answers when it comes to affordable housing.

 

Just how bad is it?

This spring, when Charlottesville began basking in the glow of its No. 1 ranking in Frommer’s Cities Ranked & Rated, Lindsay Dorrier Jr., the chair of the Albemarle Board of Supervisors, told a gathering that he hoped hordes of people wouldn’t move to the area after seeing the ranking. Dorrier’s not the only one to worry that transplants will drive steep housing costs even higher.

 In fact, compared to many other small cities and college towns, all of which ate Charlottesville’s dust in the “best places” lineup, we’ve got nothing to complain about.

 The ranking book, which was written by Bert Sperling and Peter Sander, tallied sales prices for the “average home type in the area” from the National Association of Realtors—a definition that typically knocks a bit off of home sales prices—finding that the median home price for the Charlottesville metropolitan area in 2003 was $177,840. In Santa Fe, New Mexico, the runner-up to Charlottesville, the median home goes for $234,380. In the third place city, San Luis Obispo, California—a Charlottesville-like small college town surrounded by natural beauty—the median home price is even worse—an astounding $380,130.

 Rents are also steeper in these towns. The fair market rent for a two-bedroom apartment in Charlottesville, as determined by the U.S. Department of Housing and Urban Development, is $698. A two- bedroom goes for $798 in Santa Fe, and $917 in San Luis Obispo. Other college towns further down in the rankings, such as Ann Arbor, Michigan, and Boulder, Colorado, easily outprice Charlottesville in both home sale prices and rents. Even Corvallis, Oregon, is more expensive than Charlottesville.

 To be fair, most like-sized college towns have more affordable housing than the Charlottesville area, but usually not by much. And after all, shouldn’t housing in cities like State College, Pennsylvania, and Iowa City, Iowa, cost far less than in a blue-ribbon town with a rich history, prime East Coast location and the aura of T.J.? Instead, housing costs in these and other comparatively drab college towns are competitive with those in fair Charlottesville.

 The Charlottesville region isn’t even tops in Central Virginia. Fredericksburg, our neighbor to the northeast, nicknamed “Fred-Vegas” for its urban sprawl, touts a median home price of $224,397, according to statistics from the Virginia Association of Realtors. Six other real estate markets in Virginia boast bigger home prices than the Charlottesville area, which is defined as the City and Albemarle, Louisa, Greene, Fluvanna and Nelson counties.

 On its own, Albemarle’s 2003 median sales price is $254,500, making it the third most expensive housing market in Virginia, costing less than only two areas of Northern Virginia. Still, the high-dollar County isn’t outlandishly expensive for Virginia, and is roughly on par with the Williamsburg, Prince William and Greater Piedmont markets.

 But perhaps the most startling housing statistics that point to the national housing epidemic are those for the United States on the whole. In 2003, the median American home sold for $160,100, according to the National Association of Realtors, while the fair market rent for a two-bedroom apartment was $670—both figures nipping the heels of those in Charlottesville.

 “It’s such a common problem,” says County Supervisor Sally Thomas of rising housing costs. “We like to think of ourselves as being unique. But in fact, it’s more of a join-the-crowd [problem].”

 Kevin Lynch, the recently reelected City Councilor and likely next mayor, agrees. “Although we’re expensive, we’re certainly not as expensive as the other cities that are in our cohort,” Lynch says. “There are parts of Charlottesville that are still undervalued.”

 For people moving to Charlottesville from other areas, the question of whether the region has an affordable housing crisis rests on their perspective.

 “People coming from the Northeast or from California get a sense of price relief,” says Jeff Gaffney, CAAR president. “When you’re coming from the South or the Midwest, there can be a some sticker shock.”

 The housing market has been red hot nationwide largely because of high demand and plummeting interest rates, which have taken a nosedive since 2000, and are at 40 year lows. For example, the average rate for a 30-year fixed rate mortgage last month was 6.27 percent, according to Freddie Mac—a substantial dip from the 8.52 percent rate in May 2000. At 6.27 percent, a $150,000 mortgage carries a $926 monthly payment while the 8.52 rate carries a $1,156 monthly payment.

 Also, as Gaffney notes, real estate looked like a far safer investment than the stock market after the tech bubble burst in 2001. As a result, many investors have taken money out of the market and put it into real estate.

 Demand continues to rise, while antisprawl policies have driven up prices in many places, including here, some say.

 Hardest hit, according to a 2003 report for Joint Center for Housing Studies of Harvard University, is the already tight supply of smaller, cheaper housing. As a result, lower-income households are spending more of their money on rent and mortgages—a problem made worse by stagnant wages in the Wal-Mart economy.  Affordable housing is defined as that which costs a renter or homeowner less than 30 percent of his income. By this definition, 44 percent of renters in the Charlottesville region cannot afford a $698 “fair market” two-bedroom apartment, according to the National Low Income Housing Coalition. Again, Charlottesville is hardly alone in facing this dilemma, as the percentage of renters who are priced out of the standard two-bedroom apartment is actually larger nationwide.

 

Economics 101: Supply and demand

Johnson Village and Fry’s Spring are classic middle-class neighborhoods featuring modest detached homes interspersed among the big trees and narrow roads typical of quiet, older subdivisions. Change, however, is coming in the form of a large housing development that includes a mix of single-family homes, townhouses and condos.

 In January, the City Planning Commission rezoned the new housing development’s property to allow the relatively dense clustering of condos and townhouses in addition to the single-family homes and duplexes for which the site had previously been zoned.

 According to Lynch, a goal of the rezoning and City government’s negotiations with the developer, the Kessler Group, was to encourage affordable housing options in Johnson Village.

 “I’ve found that the developers are fairly flexible when they’re putting their plans together,” Lynch says, noting that developers can profit roughly equally from building a cluster of $140,000 townhouses or by building fewer, more spread-out $250,000 homes.

 A week after the Planning Commission approved the rezoning for the 188-unit subdivision, which was to be sited at Cherry and Cleveland avenues, the Fry’s Spring Neighborhood Association caught wind of the project.

 “When we got a look at this, we were flabbergasted,” Sgt. Farruggio said back in March.

 Traffic problems were the group’s major complaint about the development. However, the smaller, cheaper homes also raised the dander of some residents.

 Glenn Catalano, who lives on Jefferson Park Avenue in Fry’s Spring, says new townhouses in his neck of the woods are almost certain to be snatched up by developers looking to rent them to UVA students. As an example of how this can occur, Catalano points to housing farther up JPA toward the UVA campus.

 “None of them are owner occupied,” Catalano says. “What’s going to happen here is the exact same thing.”

 Pushing for a major cutback in the number of units, from 188 to 80, the Fry’s Spring Neighborhood Association convinced the City Council to send the plan back to the Planning Commission.

 In March, the Planning Commission again approved the development, which had been revised to contain 114 units. This reduction was a voluntary concession by the developer, as the City cannot require fewer houses than zoning allows.

 The cutback in units came at a price. Before the City Council finally approved the project on March 15, Mayor Cox asked Steve Runkle of the Kessler Group what the reduced number of units would mean for housing costs. Runkle replied that the price tags would go up, with the cheapest unit now selling for $150,000. He said if only 80 houses were to be built, as neighbors had demanded, there would be an even larger proportion of single-family detached homes—as opposed to townhouses or condos—and the prices would start at $225,000.

 Runkle, who has been involved in several large developments, including the Hollymead Town Center, says neighborhood beefs over chunks of affordable housing are nothing new.

 “[Affordable housing] generally brings concerns of adjacent areas. That’s fairly standard,” Runkle says. “Everybody thinks these public policies are a great idea until they start affecting them.”

 But both Catalano and Farruggio make convincing arguments that more than the standard NIMBY impulse was at play in their neighborhood’s opposition to the Johnson Village development. If the condos and townhouses were to succumb to student rentals, they ask, how would the development boost inexpensive housing stock in the City?

 “It’s not affordable housing that the neighbors are against. We are all for affordable housing,” says Farruggio, who is also a member of the city’s housing taskforce. He argues that a block of rented townhouses could destabilize a neighborhood that “was built and designed for single family detached homes.”

 To truly tackle affordable housing, Catalano argues, the City should ensure that new units are owner occupied. Or, as Farruggio suggests, the City should adopt a trust to subsidize affordable housing, and penalize homeowners who pull out early to sell the subsidized homes. But local governments have neither option, yet.

 Without teeth for affordable housing policies, Catalano says housing developments follow the rule of simple economics: If there’s a market for overpriced rentals, why shouldn’t developers make that buck?

 

Pointing the finger

Stu Armstrong, executive director of the Piedmont Housing Alliance, says overpriced housing in the region is driven by the housing market in Albemarle County, where housing costs have long been the steepest and where most of the area’s population lives.

 Greene, Augusta and other counties, even the City of Charlottesville, have long functioned as “a pressure relief valve” for the overheated Albemarle housing market, Armstrong says, and are now experiencing their own housing cost problems.

 To illustrate the root cause of rising housing costs in Albemarle, Jeff Gaffney, CAAR president, whips out a calculator and begins punching in a simple equation. He says a builder typically wants the value of a lot to be 20 percent of the cost of a total home package. He keys up the cost of a home on a $25,000 lot, which will be around $125,000—definitely in the affordable range. However, once the lot gets to $40,000, the home price jumps to $200,000. With parcels going for $75,000 in growth areas off of 29N, affordable housing is out of reach before the foundation is even poured.

 “Land costs in the County have increased at a rapid pace in the last few years,” developer Runkle says.

 One reason for the spiking land costs, according to several local real estate observers, is Albemarle’s recent efforts to corral development into targeted areas.

 “You restrict the growth, prices go up,” Gaffney says.

 Most of the new housing planned for Albemarle is to be built in the growth areas, which are geared toward planned urban environments. This is all part of the County’s growth strategy, which seeks to preserve mountain vistas and rustic charm by steering new homes and retail into concentrated areas. To compete with new homes in rural Albemarle, the County’s plan is to create a livable, enticing environment in the development areas by providing the city-living perqs of walkability, parks and public transportation.

 These development areas, which were selected as part of the County’s creation of the “Neighborhood Model” in 2001, are located mostly around Charlottesville, Scottsville and Crozet, and account for only 35 of the 726 square miles in the County—less than 5 percent of Albemarle’s land. And though targeted growth on such a small area might be good for urban living, it jacks up land costs and forces developers to plunk down more for infrastructure.

 “Smart growth policies had unintended consequences,” Armstrong says.

 But opening up the rest of the County to unchecked growth and cookie cutter housing is not a popular solution. Furthermore, it probably wouldn’t do much to solve the problem. As Harrison Rue, the executive director of the Thomas Jefferson Planning District Commission says, “Transportation costs are a huge part of a family’s budget.”

 Although a home in a rural area of Albemarle might be cheap, a family in the sticks usually needs two cars to get to work and to shuttle kids around. Rue says a one-car family can save enough to afford $40,000 more on the cost of a house. Therefore, to truly be effective and assist lower-income people, affordable housing needs to be close to jobs, schools and supermarkets, preferably within walking distance.

 There are massive housing developments planned for the County’s growth areas. By boosting supply, theoretically, the new developments could help ease the County’s housing cost woes.

 “We’ve got hundreds of houses that are just over the horizon,” says County Supervisor Sally Thomas, citing the 893-unit North Pointe Community, which has yet to get the go-ahead from the County, and the 300-unit Hollymead Town Center.

 To help ensure that affordable housing is included in new developments, the County recently passed a flexible requirement that 15 percent of the units in new developments be affordable or a “comparable contribution should be made to achieve the affordable housing goals of the County.”

 The new affordable housing policy is getting its first test with North Pointe. The developer, Great Eastern Management, has volunteered that only 3 percent of the 893 units in the giant project will be affordable—just 27 units. To compensate, the developer is giving $100,000 in matching funds to both Habitat for Humanity and the Piedmont Housing Alliance, and $50,000 to the Albemarle Housing Improvement Program.

 Though disappointing to housing advocates, even this modest affordable housing offer is better than nothing, which had been the norm before North Pointe.

 According to Karen V. Lilleleht of the Albemarle Housing Commission, who first started working on housing issues in 1956, extracting any portion of affordable housing from a developer, even a small percentage, is a victory of sorts.

 “At this point in time, it’s probably the best we can do, because we can’t require it,” Lilleleht says, referring to the flexibility in Albemarle’s new affordable housing policy. “Really, they’re doing what they can.”

 

Handout or hand-up?

With limited options for policymakers to force developers to build cheap homes, the three solutions to the affordable housing dilemma that show the most promise are: 1) those that actually funnel cash toward lower- or middle-income homebuyers or renters; 2) those that teach people how to buy a home; or 3) those that treat a primary symptom of the problem, namely low wages.

 The nonprofit Piedmont Housing Alliance (PHA) buys, refurbishes and either sells or rents affordable housing in the area. PHA has worked on 264 housing units, and has educated and counseled scores of local homebuyers.

 PHA is funded by private donors and grants from Federal, State and local governments, and had about $5.5 million in equity at the end of 2003. A recent success for the organization was its efforts to rescue a 16-unit apartment building in the Rose Hill neighborhood from the blocks, keeping rents at $440 per month for the two-bedroom apartments and preserving the character of the building, which has long catered to African-American teachers and other professionals.

 But though PHA’s bottom line looks impressive, it’s small compared to what other areas have mustered. For example, when Santa Fe glimpsed a dismal future of insane housing costs back in 1991, it created the Santa Fe Affordable Housing Roundtable, a coalition of nonprofits and local governments that was able to land $55 million in housing assistance from government and private sources while only spending $900,000 in municipal money. During the six-year life of the project, 621 affordable homes were built, 221 below-market rental units were acquired or built and 1,900 households were assisted in some way.

 So does that mean police officers can afford to live in Santa Fe these days?

 “It can be done. Sometime it takes a little hunting around,” says Aric Wheeler, the recruiting officer for the Santa Fe Police Department. “We do have options to live here.” 

 Santa Fe’s starting salary for cops, minus various incentives, is only a few hundred dollars more than the $29,250 salary at which Charlottesville’s police officers are hired.

 Of course, a bigger starting salary is another way to keep police officers, firefighters, teachers and service industry employees afloat in a tight housing market. In Ann Arbor, a cop starts at $36,442, while in San Luis Obispo County, a Sheriff Cadet gets $45,552.

 And fortunately for Charlottesville’s men and women in blue, wages appear to be on the way up. Chief Longo says Charlottesville police officers have seen “pretty significant increases in their starting salaries this year and last year.”

 Sgt. Farruggio says the City is doing all it can to boost cops’ salaries. And more help is coming, in the form of a newly created police foundation, which should provide funding for homeownership programs.

 “There are some really aggressive initiatives that I’m told are on the way,” Longo says.

 But for other people struggling to find housing, PHA, Habitat for Humanity and the Albemarle Housing Improvement (AHIP), a nonprofit that has rehabilitated 635 homes since 1976, are the biggest games in town. And without serious financial backing, both of these organizations can only take a Band-aid approach to affordable housing.

 The powers that be in Richmond are of little help. PHA received only $192,638 from the Commonwealth last year. This is hardly the case in many other cities, where state governments are far more involved in affordable housing.

 In October 2002, a group of 19 politicians, developers and other local leaders from Charlottesville and Albemarle trekked up to Burlington, Vermont, to see how things worked in that city. Burlington is almost exactly the same size as Charlottesville in area and population, and is also home to a state university and a thriving pedestrian mall. If Charlottesville bordered a lake, the cities would be almost identical.

 Burlington, like most boutique-friendly towns, has had its headaches over affordable housing. During the tour, the Virginians heard how the City of Burlington now requires that 10 percent of all new developments be affordable. They also heard about the many successful affordable housing projects run by the Burlington Community Land Trust.

 To inject some reality into the discussion, PHA’s Armstrong says he asked Burlington’s mayor, Peter Clavelle, about the budget of the Vermont Housing and Conservation Board, the state’s housing trust. Since its formation in 1987, the trust has directly funded $142 million in affordable housing projects, secured $516 million from other sources and created 6,419 affordable housing units, all in a state of 615,000 people.

 In contrast, Virginia doesn’t have a housing trust fund. It did have one, called the Virginia Housing Partnership Fund, which doled out millions in loans for affordable housing, but the State Legislature sold the fund in June 2003—at a huge loss—to help pay off Virginia’s multibillion dollar debt.

 “There’s no money here. We don’t have the financial tools to do all these things,” Armstrong says. “I love what I do. But we live in one of the most challenging states in the country to do it.”

 

Lowering the ceiling
City housing task force unveils new strategies

Amidst increasing worries about affordable housing, the Charlottesville City Council in February 2003 appointed a task force to come up with a new housing policy for the City. The task force, a diverse group including real estate agents, City planners and neighborhood association reps (including new City Councilor-elect Kendra Hamilton), presents its plan, “The 2004 Housing Strategy,” to the Council this week.

 After months of discussing previous policies and scouring housing stats, the group has pinpointed several key challenges. Chief among them is the fact that the number of residents with low and moderate incomes is growing while the number of “affordable starter homes” is decreasing.

 The task force also identified a somewhat unique local problem, namely that the City no longer has any “undesirable neighborhoods” with scads of vacant or decrepit homes that could be saved with targeted rehab and converted into affordable housing. In Charlottesville, all neighborhoods are subject to booming real estate prices nowadays.

 In order to come up with a fix to the problem, the task force first sought to define affordable housing. Two-thirds of area residents earn less than $50,960 for a family of four, or 80 percent of the area’s median income. Affordable housing is defined in the report as homes that these people can afford. This means that a $218,300 house would be at the top end of “affordable.” Using a slightly different calculation, affordable rents would be $796 per month at maximum.

 The plan, which recommends about 40 actions, includes several potentially weighty ideas that, if implemented, could make a dent in the City’s affordable housing woes. These include:

•The creation of a full-time Housing Planner for City government.

•A requirement that 15 percent of most new housing developments be affordable. This proposed rule, similar to Albemarle’s new affordable housing policy, would give developers the option to instead make a “comparable contribution” to the City’s affordable housing goals.

•The development of deed restrictions or other ways to ensure that affordable housing created by the City remains inexpensive for a specific period of time.

•The creation of a housing trust fund with a minimum annual contribution from the City of $300,000, which, it is hoped, would attract other public and private monies. —P.F.

It’s Capshaw’s world …we just live in it
Real estate mogul Coran Capshaw may not be the biggest developer in town, but he’s the glitziest

A whiff of development was in the air on a recent gusty spring afternoon. As it blew across W. Main Street, a stiff breeze carried the smell of freshly cut sawdust from the Walker Square apartments, which were rapidly rising on land adjacent to the train station. The new buildings are one of the latest projects of Coran Capshaw, the local real estate magnate, owner of Musictoday.com and manager of Dave Matthews Band.

   Many Charlottesville residents, even those outside of real estate and City planning circles, would likely finger Capshaw if asked who was the brains and bucks behind Walker Square. In fact, Capshaw’s name is often whispered as the suspected developer behind projects that have nothing to do with him. This is because Capshaw has become the public’s imagined puppeteer behind Charlottesville’s growth; he’s the developer people think of first when they see Tyvek panels and construction crews.

   Yet Capshaw is hardly the only major developer at work in and around Charlottesville. Both Wendell Wood’s United Land Corporation and Dr. Charles Hurt’s Virginia Land Company own massive swaths of Charlottesville and Albemarle County and have stakes in controversial projects such as the Hollymead Town Center—the Martian landscape that will soon be home to Target and other big-box retailers. But despite their holdings, Hurt and Wood seem to slide under peoples’ radar screens.

   Capshaw’s visibility doesn’t stem from any effort on his part to seek the spotlight. In fact, he has created a bevy of Limited Liability Corporations with generic names under which he holds his properties. When Mayor Maurice Cox and other local officials refer to Capshaw for the record, it’s almost always as “a developer.” But despite attempts to keep his business ventures on the down-low and away from public scrutiny, Capshaw is the most exposed local player in real estate.

   “I’m not sure why I’d be singled out for discussion,” Capshaw tells C-VILLE of his public prominence. Pressed for a reason, Capshaw offers that perhaps his visible properties and “primary job” as manager of DMB “all ties together” in peoples’ minds.

   Capshaw certainly owns many attention-grabbing buildings, such as the former ConAgra and Ivy Industries properties and the SNL building, the deal for which has not yet been finalized. He also holds the keys to several popular restaurants, including the Blue Light Grill and the Mas tapas bar, though he does not own the buildings that house most of the restaurants. Perhaps most importantly, Capshaw is rock ’n’ roll. He’s not just putting up townhouses off of Cherry Avenue, he’s taking a chance on huge former factories like the Technicolor plant in Ruckersville, building swanky condos within a quick stroll from the Mall and booking bands at Starr Hill—all facets of the hip side of local business.

   With 15 of Capshaw’s local properties (by no means a complete list) weighing in at an assessed value of almost $50 million, Capshaw has become, in essence, Charlottesville’s version of The Donald.

   Are we lucky to have him as a big winner on the Charlottesville Monopoly board?

   Yes, if you’re a fan of the City’s and County’s ideas about how this place should grow. Capshaw is working on two giant residential developments on the south side of town, the City’s targeted growth area, which, some hope, will bring prosperity to primarily blue-collar neighborhoods.

   “I think there’s a theme about smart reuse around town,” Capshaw says, explaining how he’s embraced the strategy, championed by local leaders, of purchasing and rehabilitating old warehouses, office buildings and garages, many of which would likely have stood vacant for years.

   “The community lost a lot of hard-to-replace jobs at these buildings,” Capshaw says of the dormant industrial sites of Technicolor, ConAgra and Ivy Industries. “I’d like to put jobs back in them.”

   Capshaw also has an unassailable record of philanthropy, having kicked in big money for the Music Resource Center, which caters to aspiring high school-age musicians at the old Mt. Zion Baptist Church, as well as through the initiatives of Bama Works, a charitable giving organization he runs with Dave Matthews Band.

   But not everyone is happy about Capshaw’s growing number of holdings around the region, particularly locals who loathe the sound of belt saws or the sight of trees going down for new housing. Maybe the old coal tower is an eyesore, but some will definitely roll their eyes at yet another high-end, yuppie den that seems likely to rise soon on the land around the structure.

   However, both those who grumble about Capshaw’s developments and those who buy into them can agree on one thing: He gives us all something to talk about. If Capshaw took his wheeling and dealing elsewhere, perhaps moving on up to the big city, little Charlottesville would lose a bit of its glamour, for better or worse.

Getting inside Capshaw’s world:
The Method

The following list of properties was compiled using information from the Charlottesville and Albemarle County assessors’ offices. Capshaw confirms ownership or “interests” in most of these sites and buildings. The listed properties not explicitly confirmed (or denied) by Capshaw—the former Elite Electrical building, two parcels on Avon Street Extended, and the garages on W. Main Street and Ninth Street SW—are owned by companies linked to him through public records from the assessors’ offices and the State Corporation Commission.

   Capshaw’s real estate holdings extend well beyond this compilation. According to a statement to C-VILLE from the developer himself, these unlisted properties include five commercial sites outside of the City, an interest in the Earlysville Business Park, a building on the Mall, and interests in six County residential sites, “with an emphasis on sites in the growth areas.”

   Capshaw has also acquired four County properties “for the purpose of protecting them from further development by placing open space easements on them. Two of the easements are complete and two are in process.”—P.F.

I SAW YOU – Last week at the Downtown ACAC. You: buff business type, reading GQ on treadmill. Me: petite brunette wearing UVA sweatshirt. You caught me peeking at you over my Shape magazine while you were talking with your friend about real estate. Later, you drove by me in your BMW. Take me for a ride?

The above encounter never happened. But it could have, because the characters in the fictional personal ad represent two of Charlottesville’s most common stereotypes, at least according to Claritas, a California marketing firm. Specifically, the hotshot guy is what Claritas calls an “Executive Suite.” He makes around $70,000 a year and watches “Will & Grace.”

One of 66 detailed American caricatures described on the Claritas webpage, the Executive Suite is a white-collar professional “drawn to comfortable homes and apartments within a manageable commute to downtown jobs, restaurants and entertainment.”

The smitten gym vixen is an “Up-And-Comer.” A 20something who likes to party, she drives around “second-tier cities” in her Mitsubishi Eclipse, watches MTV and rents a swinging bachelorette pad—perhaps she’s moving into one of the newly refurbished apartments at Norcross Station?

Reducing Charlottesville to a handful of caricatures might not be the most politically correct way of gauging our gaggle, but it works. Claritas and many other market research firms produce reams of information about the habits, hobbies, brand affinities and socioeconomic realities of virtually every segment of society. The thinking goes that the huckster ethnography, termed “neighborhood lifestyle segmentation” by Claritas, is possible because people are easy to pigeonhole.

Claritas dips deep into the cliché well to describe the central theory behind “You Are Where You Live,” the free, stripped-down version of the company’s marketing models, available at claritas.com. Claritas claims that the system works because “birds of a feather flock together.

“It’s a worldwide phenomenon that people with similar cultural backgrounds, needs, and perspective naturally gravitate toward one another,” Claritas says.

Therefore, every neighborhood can be divvied up like a high school hallway. The cliques stick together, and are as easy to spot as the hoods, jocks, nerds and the foreign exchange student in an ’80s movie. A real-life example of this human tendency is when immigrants congregate in specific enclaves, such as the Ethiopian communities in Los Angeles or Washington, D.C., or the Hmongs in the Twin Cities.

Upscale gym lurkers aren’t the only Charlottesville residents Claritas funnels into categories like cows in a chute. For instance, the company has identified the working class paragons of Americana, dubbed “Red, White & Blues,” who hang out in the 22911 ZIP code, which encompasses a chunk of Albemarle County east of town, including Pantops. A good perch from which to spot this cluster might be a table at the Tip Top during the lunch rush.

“Red, White & Blues typically live in exurban towns rapidly morphing into bedroom suburbs. Their streets feature new fast-food restaurants, and locals have recently celebrated the arrival of chains like Wal-Mart, Radio Shack and Payless Shoes,” Claritas says.

Despite their affinity for strip mall retail chains, these folks are into protecting the environment and like to paint and draw. They read Hot Rod magazine and often drive Chevy Trackers.

Another nearby stop on a Charlottesville stereotyping safari might be the Everyday Cafe, also in 22911, where one can observe the so-called “Country Squires” in their natural environment. This group and their Wal-Mart-loving brethren account for two of the five most common people “clusters” in the area. In the illustration that accompanies the marketing profile—Claritas includes cute drawings of each stereotype doing their thing, the better to help retailers envision their clientele—the Country Squire is wearing a riding cap and standing in front of a horse and white picket fence. If you look long enough, you might spot a Country Squire when she pulls up to the Everyday Café in her GMC Denali to pick up a latté and a copy of USA Today.

“In their bucolic communities noted for their recently built homes on sprawling properties, the families of executives live in six-figure comfort,” Claritas says of Country Squires, adding that their turf is “an oasis for affluent Baby Boomers who’ve fled the city for the charms of small-town living.”

Sound familiar?

 

Claritas first developed its demographic analysis 30 years ago. And though a well-known progenitor of the market research field of “geodemographics,” the company is hardly alone in compiling detailed information about Americans. Market research in the United States is a $6.2 billion-a-year industry, and is gaining in clout each year, according to Euromonitor International, itself a market research firm.

Marketers track and scrutinize virtually every move a consumer makes. The Washington Post’s webpage now requires the age, profession and all-important Zip code from readers before granting access to Web versions of news stories. The Los Angeles Times asks about online purchases and requires Web readers to disclose their household income. These readers’ specs likely find their way to Claritas, which also gathers information from media audits.

Though the freebie data from Claritas doesn’t say who reads C-VILLE Weekly, the firm’s profiles include several local characters who match up with our auditing data. The “Greenbelt Sports,” who are usually college educated and like to backpack and mountain bike, are likely candidates to pick up a copy of this newspaper. But somewhat surprisingly, from a stereotyping point of view, research suggests that the Greenbelt Sports might appreciate a column on professional wrestling—they love their wrasslin’.

The root source for market research is the U.S. Census, which is conducted every decade, most recently in 2000. This work is then refined by the surveys and research of the Bureau of Labor Statistics, most notably in the Consumer Expenditure Survey, which provides data on the incomes and buying habits of Americans. Marketing firms subsequently pile on the research with phone and Internet surveys, as well as data collected from the customer rolls of companies. Claritas draws from 1,600 private and public sources to develop its neighborhood profiles.

The result is that advertisers and businesses can know, in astonishing detail, who they are targeting at in a neighborhood or any other place where people come together, such as an airplane, sporting event or morning commute. Market research isn’t necessary in every situation: It should be self-evident that a Banana Republic billboard featuring androgynous models (why does he look so sullen?) might not have the intended effect if placed beside a rural Texas highway. But for subtle consumer preferences, such as whether Ivy residents like pizza from Papa John’s, Claritas has the skinny.

For example, the “Boomtown Singles,” a young set who rent apartments on the west side of town, would be good targets for a liquor promotion. But where can you catch this crowd? Sure, these entry-level office workers like to stay active, and can be found in soccer leagues or jogging on the Mall—such as in the Claritas illustration, where a woman in a yellow sweat suit is seen scooting along with her trusty Dalmatian. But a Guinness toast doesn’t seem like a good fit during a soccer game. Fortunately, Claritas knows the Boomtown Singles like to rock out to alternative music—a tip that could lead the savvy liquor promoter to place a call to Starr Hill or the Tokyo Rose.

Market research is about making safe bets. An example of this strategy is the play lists for New York City radio stations. In such a giant media market, the stations want to appeal to the greatest number of possible listeners. That means the quirky programming you might hear on WNRN 91.9 FM would never fly in the big city, where Nelly’s “Hot In Herre” can dominate the airwaves for an entire summer.

The Claritas stereotypes for Charlottesville, though not inclusive of all residents, are calibrated to the most common types of people you might see around town. The six most prevalent Claritas stereotypes in Charlottesville’s 22902 Zip code, which includes the area east of Ridge-McIntire and south of the Rivanna River, are the Executive Suites, Suburban Pioneers, Hometown Retired, Family Thrifts, Bedrock America and the hard-luck Mobility Blues, whose name is in reference to their transience. On the other side of town, south of 250 and west of Ridge-McIntire, including UVA and some of Ivy, you’re most likely to run into the so-called City Startups, New Beginnings, Boomtown Singles, Mobility Blues, again, and the gym cruising Up-and-Comers.

Remember the guy who was sitting at the next table at Duner’s last weekend, the one who was yakking about the story he’d read in Rolling Stone? And though he was somewhat stylish, he had the sheen of someone who might hit a Hooters or watch “That ‘70s Show”? He was definitely a “Young Influential”—a common resident of 22901. Claritas says his tribe “reflects the fading glow of acquisitive yuppiedom.”

Scottsville residents: Like fast cars and fast women? Have a small apartment and gloomy service industry job? Perhaps you’re a member of the “Young & Rustic” segment. Though Scottsville may be sprucing itself up with money from the State and with talk of new subdivisions, the Claritas specs say the town has retained its old-school core. For instance, joining the Young & Rustics are the “Crossroads Villagers,” who own handguns and like to order videos by mail (no word on what type of videos).

Perhaps these two Scottsville groups enjoy socializing with the “Bedrock Americans,” a prevalent posse in Charlottesville, who are seen wearing tank tops and Daisy Dukes in the Claritas illustration. With a median household income of $25,692, a third of this group fail to graduate from high school, and a full quarter of them live in mobile homes.

 

Clear Channel Communications, the media mega-conglomerate that owns radio and television stations, billboards and performance venues—including six radio stations in this market—has often drawn on Claritas’ expertise. In one particular success story cited by Claritas, Clear Channel used the market research to help sell tickets to a Minneapolis performance of a traveling children’s show that included life-size characters from a Bible-based cartoon. Claritas helped Clear Channel target clusters from among the group’s fan club. Clear Channel’s then e-mailed these likely attendees and generated $70,000 in advance ticket sales.

Many other companies from a variety of industries are on the Claritas client list, including BMW, Eddie Bauer and the L.A. Times. Claritas helped a “family dining” restaurant chain, whose name Claritas has kept on the down low, expand beyond its 300-plus franchises around the country. By targeting clusters of likely customers in every metropolitan area in the United States, Claritas developed a “Game Plan Matrix” for the chain that pinpointed the best markets for expansion, as well as a plan for where to place specific restaurants within those cities.

If the massive amount of retail space in the massive Albemarle Place project on 29N begins to fill up, chains may use the population-sorting methods from Claritas or other companies in deciding whether to move into the center. The low-income Mobility Blues may “excel in going to the movies,” but will there be enough of them spilling out of the proposed movie theater to justify building another Burger King? Furthermore, will the big-spending Country Squires drive to the shopping mall if it includes a Pottery Barn?

There are, of course, people who find the entire premise of “lifestyle segmentation” distasteful. With the nation growing more diverse every year—see, for example, California, which is now home to more minorities than whites—do we all fall neatly into 66 character sketches? Still, the persistence of “birds of a feather” is tough to deny. Opposites don’t attract, even in the melting pot. The black middle class seems to settle in mostly black suburbs, more Jewish families reside in the Maryland suburbs of D.C. than in the Virginia ‘burbs, according to a recent Washington Post article, and other ethnicities continue to clump together in neighborhoods all over the country, despite the efforts of well-meaning city planners.

“The United States might be a diverse nation when considered as a whole, but block by block and institution by institution it is a relatively homogenous nation,” writes David Brooks, in a recent issue of The Atlantic Monthly. Brooks cites the example of newly developed suburbs in Arizona and Nevada, which he says often begin as integrated communities. But as these communities develop reputations and personalities, they gradually shift and solidify into clusters. Eventually, the Young Influentials and Family Scrambles will have their spots, and everybody in town will know where they are. If you’re a Claritas-dubbed Boomtown Single in Phoenix on business, you’ll likely find a bar that caters to your crowd. As Claritas says, that’s just human nature.

In the book The Clustered World, Michael J. Weiss, a journalist who has long covered the geodemographics industry, writes that he finds comfort in the “benign nature of the clusters” and in the fact that marketers are targeting group behavior rather than that of individuals.

“I recognize that the basic clustering concept, that people in the same neighbourhood tend to behave (or at least consume) in the same way, goes back to cave-dweller time. The clusters simply help describe our diverse world today—the good, the bad, the dull, the outlandish,” Weiss writes.

Presumably cave dwellers would fall into far fewer marketing clusters than do Americans today. And even more encouragingly, this trend seems to have continued over the years. Back in the ’70s, Claritas could size up every neighborhood with only 40 clusters. But now we’ve swelled to 66 categories, having accounted for 62 just recently. That’s progress. At this rate, perhaps Americans will eventually outgrow easy stereotypes, and Bedrock Americans will be difficult to distinguish from the City Startups or Mobility Blues.

It all started back in January 1999 with an order to Domino’s Pizza. Sharon Jones paid for the pizza with a check, and likely brought it into her modest townhouse in Fredericksburg to share with her 8-year-old daughter, Breanna. But Jones never actually paid for the pizza—at least not that Sharon Jones. Because the checking account in question was taken out under the identity of a different Sharon Jones, one who lives 70 miles away in Charlottesville.

This second Sharon Jones, a 41-year-old single mother and sixth grade teacher at Walker Elementary School, didn’t learn about the $23 Domino’s charge or realize she was a victim of identity theft until eight months later, when she tried to co-sign a car loan for her brother. Though she always pays her bills on time, and thought she had excellent credit, her credit union rejected the loan request.

“That can’t be correct,” Jones remembers thinking of the credit rejection.

After ordering her credit report, Jones was shocked to read that she had accrued more than $30,000 in unpaid bills. The Charlottesville resident recognized none of the overdue expenses, which were charged to accounts at credit card companies, banks, department stores, and furniture and electronics retailers, most of which were in the Fredericksburg area. She even saw late rent payments and hospital charges on the credit report.

Jones started calling the companies to whom she owed money and was told that she was registered with them as a GEICO employee who lived in Fredericksburg.

“I’ve never lived in Fredericksburg. I’ve never been to Fredericksburg,” says Jones, who owns a small home in the 10th and Page neighborhood of Charlottesville.

It was the beginning of Jones’ long relationship with Sharon Patrice Jones, a woman whom she’s never met, though both women know many intimate details about each other.

Sharon Deloris Jones held a GEICO car insurance policy, and was able to piece the mystery together when she learned that a woman who shared her first and last names had been a customer service representative for the company in its Fredericksburg office. The similarly named rep lifted Jones’ social security number and other information, essentially assuming her identity.

Finally aware that she was being victimized, Jones began trying to undo the damage.

“It was like one affidavit after another,” Jones says of trying to expunge the many charges that the other Sharon Jones ran up on her credit report. Often she had to send her utility bills to companies to prove she lived in Charlottesville and was not the woman who had purchased furniture, clothes, or even junk food from 7-Eleven.

A couple months after the August 1999 discovery of her identity thief, Jones received a court warrant for a hearing in Fredericksburg. The identity thief had brought her daughter to a hospital for abdominal pains in April of 1999. The unpaid hospital bill for the visit was $275, and Jones was to be the defendant in the debt case. By explaining that this charge was actually the work of her identity thief, Jones was able to talk her way out of the court appearance. Unfortunately, it wouldn’t be her last summons.

During this period, Jones was getting calls at home and at work. And because of all the bills and related paperwork, Jones grew accustomed to the “headache of wondering what’s going to be on my door today.” One day in June of 2000, Jones found a yellow paper stuck to her front door. The letter was a summons stating that unless she paid $956 in late rent and fees for her imposter’s townhouse in Fredericksburg, she would have her wages garnished at her job. To contest the charge, she would have to appear at a court hearing in Stafford.

Jones was not able to appease the court with phone calls that time, and had to take time off of her job to travel to Stafford and stand trial. But by then she had an ally. Jones says calls she’d made to the Charlottesville and Fredericksburg police departments got her nowhere. But after a friend advised her to call the State Police, she finally reached Lindsay Jett in the office of Criminal Investigations in Culpeper.

Officer Jett was familiar with identity theft, and took a police report from Jones. Jett also tracked down a photo of the imposter Sharon P. Jones from her old GEICO job in Fredericksburg. But to beat the rap, Jones needed more than Jett and a picture of her identity thief. She hired a lawyer, and brought the maintenance man from the criminal’s apartment complex to the trial. When this witness testified that Jones was not the Jones who worked for GEICO and lived in the townhouse, she was finally off the hook.

But Jones’ extensive and successful battles to keep her wages from being garnished were not the end of her war to win her name back from a system that believed she was a debtor and a criminal. In fact, five years after that first Domino’s pizza, she’s still feeling the effects of Sharon P. Jones’ meddling.

Just two months ago, Jones tried to pay for dinner at Chili’s in Charlottesville with a check. She was rejected. And, as has so often been the case, she felt as if she was being eyed as a scam artist.

“To prove that it wasn’t me made me feel like a double victim,” Jones says of having to constantly verify that she’s not a check-bouncing crook.

Jones is tall and exudes a polite confidence. And, as one might expect with a woman who knows how to control a room full of sixth-graders, she appears tough to rattle. But when Jones sees the clever and ubiquitous Citibank commercials on T.V.—the ones that attach the incongruous voices of identity thieves to the talking heads of their victims, like an old lady skimming her swimming pool—Jones says, “I get ticked.

“I’m sitting here and I’m thinking, ‘If they only knew,’” Jones says of the commercials. “They’re making a joke of it. It’s not a joke if it happens to you.”

 

“It is the fastest growing crime in Virginia,” says Jerry Kilgore, Virginia’s Attorney General, of identity theft. The numbers back up Kilgore’s claim, with complaints from identity theft victims increasing by 27 percent in Virginia in the last year alone, according to the Federal Trade Commission. Nationally, the FTC estimates that nearly one in 10 Americans have been victims of some form of identity theft in the last five years, and says the magnitude of the problem has been swelling every year.

Kilgore, 42, a prominent Republican and likely future candidate for Virginia’s governorship, has been leading the Commonwealth’s efforts to combat identity theft. As a successful prosecutor, Kilgore put away hundreds of drug dealers. Later, while serving as the public safety czar under former Virginia Governor George Allen, Kilgore was instrumental in Virginia’s abolition of parole. But identity theft is more than just another component of Kilgore’s hard-on-crime mantra; it’s a threat that scares him personally.

“It’s a crime that can be committed by someone you don’t even see, and you don’t even know it’s happened to you until it’s too late. That’s very frightening,” Kilgore says.

There are many ways someone’s identity can be pilfered, and thieves are getting increasingly computer savvy, according to the Blackberry-toting Kilgore. The general definition of the crime is when a victim’s social security number, credit card numbers or other key personal identifiers are stolen and used to make illicit purchases. [For more, see sidebar, page 14.]

The least serious version of the crime is when existing credit card or bank accounts are used, such as when a thief steals a wallet and frantically uses the credit cards to run up a few charges before the cards are cancelled. This form of identity theft can also occur when credit card numbers are lifted from the Internet, stolen mail, via e-mail or phone scams, through overheard cell phone conversations or even from discarded receipts and bills, a common practice called “dumpster diving.” For this variety of the crime, identity thieves blow through an average of $2,100 per victim before the stolen accounts are closed, according to the FTC.

Sharon Deloris Jones, whose personal information was snagged from a business and then used to open numerous new accounts, falls into the second, more serious version of identity theft. With a social security number, a criminal can literally assume another identity and open new credit, phone or other accounts, sometimes directing the bills to false addresses so victims are completely unaware that a profligate thief is running wild on their dime. Because a victim usually must access her credit report or, in some cases, be tracked down by collection agencies or even arrested before she becomes aware of her imposter, the lag time before discovery can be quite long—eight months in Jones’ case.

Though the hospital bills and other charges Sharon P. Jones racked up were decidedly low-rent—a far cry from Hollywood-style criminal expenses such as diamond rings or massive strip club bills—she still managed to spend $30,000 in the eight months before being discovered. Though of small comfort to Jones, a tab of this size may actually be in the low end of what identity thieves can accomplish when new accounts are opened, with the Identity Theft Resource Center estimating that the average amount of fraud charges may be as high as $92,000 per victim.

 

After her trial in Stafford in the summer of 2000, Jones says her “hopes were high” that the identity theft nightmare would soon end. She was becoming an expert in dealing with the credit damage, and now had a capable detective on her case. But Sharon P. Jones, whereabouts unknown, continued to use her identity. And the police report did little to stem the tide of credit hassles for Jones.

“I have all the documentation I need,” Jones says, gesturing to a two-inch thick manila folder of bills and affidavits. “And it’s like, ‘Oh well.’”

Finally, a break in the case came in the form of yet another unearned bill. Jones’ imposter had been in a car accident in Biloxi, Mississippi, on September 16, 2000, and had used Jones’ identity at the scene of the crash. Almost a year later, State Farm Insurance sent Jones a bill for $4,200 in damage. Jones immediately called Officer Jett and told him that her identity thief might be living in the Biloxi area. In a stroke of unbelievable luck, Jett knew a cop in nearby Gulfport, also on the casino-dotted Mississippi gulf coast. When Jett called Sgt. Ken Brown in Gulfport that same night, Brown said he knew who the criminal was.

Jones’ imposter had been in another accident, and had been arrested for using false identification at the scene. She posted $25,000 in bail and was released. But four days later, with the Gulfport police now aware of her Virginia warrant, Sharon P. Jones was arrested and charged with the fraudulent use of identity, a felony. She was extradited to Virginia.

But fortunes shift often and quickly for Sharon Jones, the victim, during her identity theft saga. Virginia authorities eventually released her identity thief, for reasons that were never explained to Jones. There are no records that her identity thief ever appeared in a Virginia court for the crimes against Jones. Sharon P. Jones eventually went back to Mississippi to face charges in that state. But Officer Brown, a key component in that case, is in the Air Force Reserves, and was mobilized and sent away to the United Arab Emirates shortly after September 11, 2001. As a result, both Brown and Jones missed the court hearing of Sharon P. Jones.

By the time Jones heard about her imposter’s appearance before a grand jury in Gulfport, which finally took place in October 2002, the hearing was already over. The district attorney’s office in Gulfport, Mississippi, sent her a letter, which informed her that the grand jury decided to drop the case, and that the “ruling ends further prosecution in this matter.”

Charles Wood, the assistant district attorney in Gulfport, says the ruling means the grand jury “determined that there wasn’t sufficient evidence to go forward with the case.” Short of tracking down the jurors and asking them why they made the decision, Wood says, “there’s really nothing else” Jones can do to pursue the case in Mississippi courts.

In the struggle of Jones vs. Jones, the criminal version clearly has the upper hand.

“She’s out running free and probably doing it to someone else now,” Jones says. “There’s no telling where she is now.”

Jones’ inability to bring her identity thief to justice is, sadly, common. According to the Identity Theft Resource Center (ITRC), a nonprofit group based in San Diego, Jones should consider herself lucky for securing the apprehension of her thief—even though the charge didn’t stick—because less than 5 percent of identity theft cases result in an arrest.

“These are Agatha Christie stories. There are so many red herrings and false trails,” says Linda Foley, the ITRC’s executive director and a victim of identity theft herself.

Investigations are further hampered because identity theft often crosses jurisdictions, sometimes separating victims and criminals by hundreds of miles. With rapes, murders and other crimes to solve, where both victim and perpetrator are usually local, police often put identity crimes on the back burner.

“Some police departments take it more seriously than others,” Foley says. “When you get a case that crosses jurisdictional lines geographically, they just drop it.”

Both Ken Brown in Gulfport, now a Lieutenant, and Officer Jett in Culpeper declined to comment for this story, citing police protocol. However, when Jett is asked if he remembers Jones’ case, he pauses, and says, “I have so many cases.”

The problems don’t end with a criminal’s arrest. Convicting an identity thief requires a preponderance of evidence and a clear paper trail, because the act of forging signatures and opening accounts lacks witnesses and, often, clear culpability. And solid documentation might not be enough for a conviction.

Attorney General Kilgore says he’s satisfied with the strength of Virginia’s laws against identity theft. But even with strong laws, Kilgore says it can be tough to get a conviction in identity theft cases.

“You have witnesses unable to travel. You have witnesses and all records in many, many other jurisdictions,” Kilgore says. “It becomes very difficult for a local prosecutor, if you will, to commit the resources to what they believe is a paper crime—or a crime that just involves money—when it’s really a crime that has wrecked some other individual’s life.”

 

Kilgore’s office began tracking identity theft in earnest after seeing a disturbing increase in the crimes about two years ago. After holding a series of public hearings, the Attorney General’s office drew up the Identity Theft Protection Act. The bill, which was introduced in the General Assembly last January by Albemarle Delegate Rob Bell, strengthened existing Virginia laws on identity theft in several ways. A key component of the bill, which was passed and became active last July, was to require credit bureaus to strike any information on a credit report relating to an identity theft once a victim has filed a police report. [For more information, see sidebar.]

The law proves that the individual has taken steps to report the identity theft and, “most importantly, it more likely than not prevents new credit being issued,” Kilgore says. “Because if they pull up their credit report at the credit card company, or at the bank, they’ll immediately start asking more questions.”

However, only one of the recently passed laws has benefited Sharon Jones: the creation of the “I.D. Theft Passport,” which is intended to help people prove to creditors and police that they are victims, not criminals. Last July, when the new rules went into effect, Kilgore’s office gave one of the first three passports to Jones, who carries the fairly official looking document around with her in a little leather pouch. The passport, which Jones can flip open like a badge, includes Jones’ full name and the State seal, and says that she is the victim of identity theft. Kilgore says about 50 Virginians now carry the passport.

Jones whipped out her passport at Chili’s when her check got nixed a few weeks ago. She says the restaurant was unmoved by the passport and still wouldn’t accept the check. To help Jones and others avoid this rejection, Kilgore says his office is working to get the word out about the I.D. passports to merchants.

Unlike many people, Jones has been diligent with her finances her whole life. She owns both her house and her car, and her meticulous record keeping is a family joke. But despite playing by the rules, Jones has been unable to fully escape the hole of identity theft. Because of her credit woes, she has had to rely on family members to purchase items for her, such as when her brother-in-law got her a SunCom cell phone because she couldn’t qualify for an account herself. The massive energy she’s spent fixing her credit record has left her feeling defeated at times. And regardless of having a powerful ally in the Attorney General’s office—she even met with Kilgore—Jones has been unable to find a lawyer willing to take on GEICO to seek compensation for her, claiming that lawyers say that GEICO is too powerful to make the pursuit worthwhile.

She admits that she sometimes wishes she had a different name, and says she now routinely uses her middle name.

Foley of the Identity Theft Resource Center says victims of identity theft often display signs of post-traumatic stress disorder as a result of the relentless assault of bills and the stigma of being falsely labeled as criminals.

“They are battered,” Foley says. “It’s not unusual for them to give up.”

After five years of fixing the mess created by her criminal doppelganger, Jones stoically declares that her credit problems are sure to continue “somewhere down the line.” And despite the passport and other assistance from his office, Attorney General Kilgore is not surprised that she’s still having problems.

“The general prediction is seven years out, you can still have things crop back up on your credit report or in someone’s file somewhere,” Kilgore says.

In her folder documenting the identity theft, Jones keeps a printout of GEICO’s privacy policy. She has highlighted various sections in the document, one of which states: “Information about our customers or former customers will only be disclosed as permitted or required by law.” After repeated calls, GEICO declined to comment for the story.

Of her imposter’s failed adherence to GEICO’s customer confidentially, Jones says, “Evidently she had other things in mind.”

Given the apparent ease with which the customer service rep appropriated her identity, Jones doubts she was Sharon P. Jones’ only victim.

“How many other Sharon Joneses are in there?” she asks. “I believe she’s a pro at it. So it’s not the first time that she’s done this.” Jones will probably never know whether she was victimized by a savvy identity thief or by a struggling single mother who stumbled upon the social security number of a woman who shared her name—a case of what Foley of the ITRC calls “the wrong people in the right place.”

Asked what she would say to Sharon P. Jones if she ever got the chance to speak to her, Jones says she’d be too angry to get a word out. After a minute, she reconsiders, and says, “One thing I would tell her is that she really screwed me over.”

 

On a recent visit to Wal-Mart, Jones says the cashier ran her check through a machine and then turned on a light above the register to summon a manager. She says fellow customers were looking at her as if she was “trying to run a scam.” So on a recent busy Saturday afternoon at the same store, both Jones and her son appear uneasy as they move forward in the checkout line. Jones’ son Rickquan, a polite and intelligent 10-year-old with corn-rows, pulls a cell phone out of his black leather jacket and fumbles with it as his mom fills out a check for the $15.37 worth of juice and crackers.

The cashier takes the check and runs it through a slot on the side of the register. After it comes out, she squints at the check and says, “We need some I.D. please.” The cashier then puts on a pair of thick glasses, examines Jones’ driver’s license and starts typing on the register again. After what seems like an abnormally long time, the check clears.

In front of the store, Jones says hello to one of her students—one of several conversations she has with students and parents while at Wal-Mart. Before walking through the chaotic parking lot, she smiles, and admits that she was nervous while her check was being scrutinized.

“I was nervous, too,” Rickquan quickly adds.

 

Say my name

Once a thief has your vitals, he has many ways to steal your moneySharon Jones shares the legal name of the woman who stole her identity. But even an uncommon name is no defense against identity theft. Authorities describe many cases in which people with different names, even of different genders, have used victims’ information to run up huge bills. The social security number of one woman, whose purse was stolen in 1990, was listed in FBI criminal records under a different name, and as a man.

The personal information used in identity thefts often comes from stolen wallets and purses, but can also be gleaned from stolen mail, hacked computer information, e-mail scams or stolen customer information from businesses. Thieves can even fill out a change of address form at the post office to intercept mail and then lift information from bills and other letters.

Once a criminal has a name, social security number and date of birth, there are countless ways he can begin siphoning money away from the system, unbeknownst to the person whose identity he has stolen. For instance, the thief can call the victim’s credit card companies and ask to have bills sent to a new address. With the bills going elsewhere, it can be a while before a victim discovers the crime.

Some other common scams include the opening of new bank accounts on which thieves can write checks, get new credit cards, take out loans to buy cars, open cell phone accounts, and even declare bankruptcy. If an identity thief is arrested, he can use a victim’s name and then skip a court date. When this happens, a warrant is often issued for the victim.

Once wise to the con, an identity dupe might find the going tough at the local police department. For starters, the crime is still relatively new for law enforcement. But perhaps an even bigger stumbling block is the long reach of identity theft.

“So often these identity thieves are in other states,” says Virginia Attorney General Jerry Kilgore.

Such was the case for Angel Gonzales, a resident of the Tidewater area of Virginia, who was arrested for the crimes of an identity thief operating in Las Vegas.—P.F.

how to avoid identity theft

Unless you live off the grid, it’s impossible to completely insulate yourself against identity theft. A massive array of routine activities—such as mailing a bill, signing up for car insurance or making a credit card purchase on the Internet—require enough personal information to give identity thieves a wide-enough opening to filch an identity.

The best way to reduce the risk of identity theft is to avoid disclosing a social security number unless absolutely necessary. If an unsolicited phone or e-mail pitch quickly requires your social security number, be suspicious. But because even a vigilant consumer is open to identity theft, the Federal Trade Commission (FTC) recommends that people access their credit reports from all three credit bureaus once a year. This will tell you whether a thief is trashing your credit rating and running up huge bills on your dime. And if they are, you can begin minimizing the damage.

In the eight months before Sharon Jones looked at her credit reports, her identity thief spent more than $30,000 in her name. Even more disturbingly, this may actually represent the low end of the money identity thieves can run through. In one survey of identity theft victims, conducted by the Identity Theft Resources Center, the average fraud charge on an individual’s name was $92,893.

Upon request, the three major credit bureaus—Equifax, Experian and TransUnion—are required to release copies of credit reports for no more than $9. If bogus charges show up on a credit report, your next step is to place a fraud report with one of the three credit bureaus—the other two will be notified automatically. Then, an identity theft victim must begin closing accounts that include false charges or have been opened by a thief. During this process, the victim should also report the crime to the police. The police report can be helpful in contesting false charges.

The FTC also asks identity theft victims to file their complaint with the agency, which can be reached at www.consumer.gov/idtheft, so the feds can keep a handle on the scope and trends of the ever-changing crime. Finally, Virginians can also apply to the Attorney General’s Office to get an I.D. Theft Passport that will help them prove they are the victims, not perpetrators, of identity theft. To apply for the passport, see the A.G.’s web site at, www.oag.state.va.us/hot_topics.htm.—P.F.

With the holidays approaching, William was short on cash. This was not a seasonal problem for the 45-year-old Scottsville resident, who moved to the area from another state about one year ago. Though William has a job, he says it pays less than the one he previously held. The smaller paychecks have been rough for him, but he deliberately avoids credit cards to help him ride out budget crunches.

“Credit cards get you in trouble,” he explains.

So instead, as he’s done several times during the past year, William walked into the Checks Cashed in the Cherry Avenue Shopping Center, one of six payday loan stores in the Charlottesville area. After a simple process in which William signed and left behind a check for money he didn’t have, he walked out with $250 in cash.

On a cold Thursday night some time later, William walked back into the bright, neon-adorned office of Checks Cashed. This time, he was holding $287 in cash, the required amount to cover his check. The extra $37 was the fee for his $250 loan.

The payday loan business is a numbers game. And when the math is done, it’s clear that the house always wins. The scheme is called a “payday loan” because a borrower is supposedly getting a cash advance on his next paycheck. The practice is also referred to as a cash advance or check advance.

To get a payday loan, the borrower first must prove he has a job and an active bank account. Then, he writes the lender a check for the amount of the desired loan, which is given to him in cash. No credit check is run during the process—a huge enticement for many people. The payday lender agrees not to cash the check, but keeps it as collateral until the loan and a fee are repaid.

The fee on William’s loan was based on the standard $15 per $100 loan in Virginia, which is the maximum fee payday lenders can charge in the State. The minimum time period for repaying the loans is seven days. If William repaid his loan in a week, the annual interest rate would amount to a whopping 782 percent. If he waited 30 days, it would be 183 percent. Should he not repay the loan in time, he could be sued.

Despite the steep cost of his loan, William isn’t complaining. He’s embarrassed that he has had to resort to payday loans, refusing to give his full name to this reporter, but he defends the service.

“It’s come in handy,” William says.

He says his cash flow problems are temporary. “Eventually, I won’t need it,” William says of payday loans.

But his optimism seems unfounded. William admits to getting a payday loan at least every two months. He’s obviously cash strapped, and the mounting fees must worsen his financial headaches. Yet William claims he’ll be able to escape the grasp of payday loans and fees. “I will. That’s no problem,” he asserts.

 

According to Jay Speer, a Richmond- based staff attorney for the Legal Aid Justice Center, payday loan fees force many customers like William into such a deep financial hole that they end up taking loans from one payday lender to repay the loans and fees from another. Getting a loan rolled-over or extended is illegal in Virginia, but Speer says some people bring in cash to settle an old loan, and immediately write a check to take out a new one from the same payday loan store.

“I think most people think it’s a one-time thing. They have no idea that they’re getting sucked into a long-term relationship,” Speer says. “Once they get you, it’s very hard to get out.”

A report from the Virginia Bureau of Financial Institutions supports Speer’s claim. In the first six months after payday loans became legal in the State, the typical borrower took out almost five payday loans—an average of a loan every five to six weeks.

“There’s no real way to address that at this point,” says Susan Hancock, the deputy commissioner of the Virginia Bureau of Financial Institutions, of repeat payday loan customers and the “vicious cycle” of going to one payday loan office to pay off a previous loan.

Consumer advocates say the payday lending industry relies on this repeat business, and preys on lower-income and minority families, as well as on military personnel.

“Visits to payday lending stores—which open their doors in low-income neighborhoods at a rate equal to Starbucks opening in affluent ones—are threatening the livelihoods of hardworking families and stripping equity from entire communities,” said Julian Bond, chairman of the NAACP and UVA history professor, in a recent news release.

The six payday loan centers in the Charlottesville area are located on: Cherry Avenue, which is in a lower-income, predominately black neighborhood; in the Rio Hill Center—the County’s bargain shopping district; on Carlton Road in blue-collar Belmont; in the shopping development that serves as a margin between the City and University and sits across Emmet street from the Barracks Road Shopping Center; on Seminole Trail across from Lowe’s; and near the ABC store and Burger King in Ruckersville.

According to a recent report by the North Carolina-based Center for Responsible Lending, which has long been a thorn in the side of the payday-lending industry, 91 percent of payday loans are made to people who take out five or more payday loans per year. The report estimates that these people, whom the consumer group labels as being caught in a “debt trap,” shell out $3.4 billion in fees each year.

But while critics deride payday loan centers as “legal loan sharks” who drag lower-income families into a nightmarish pyramid of growing loans and fees, the payday industry paints a far different picture, claiming the service helps people avert a cash emergency. Proponents also argue that payday loans help working families rather than prey on the poor, and cite a Georgetown University study that found roughly half the industry’s customers have a household income of more than $35,000 per year. Payday lending representatives claim their loans help a working family make ends meet when the car’s transmission goes or when junior needs that saxophone.

“I really think that this industry is a classic example of the marketplace making a need that somebody or someone fills,” says Vicki Woodward, a vice-president for Advance America, a leading national chain of payday lenders, which has a store in the Rio Hill Center.

Woodward, who also serves as the spokesperson for the Community Financial Services Association of America, the trade group that represents most of the payday loan industry, says her industry has “concern for customers who have become overreliant” on payday loans. She says payday lenders must provide explicit descriptions of the costs and responsibilities of their loans, and that the process is designed to “give pause” to borrowers.

But this cautious atmosphere is nowhere to be seen in the ubiquitous advertisements for payday loans, which are peppered with pictures of gleeful customers holding fistfuls of cash and slogans like “quick, easy and hassle free!”

Woodward says payday lenders fill a void left by banks, which have mostly stopped offering small loans in recent years. She also cites growing charges for bounced checks, ATM machine usage and credit card late fees as reasons for growth in the payday loan industry.

“There’s not many places to turn for this,” Woodward says of people in need of a small loan. “The vast majority of customers use payday advance properly, and what we could call moderately.”

Woodward says payday borrowers appreciate the service, and the industry claims a low number of customer complaints. State authorities back up this assertion.

“Relative to the number of transactions, the complaints have not been bad,” says Deputy Commissioner Hancock.

 

While consumer advocates vigorously dispute the payday loan industry’s claim of providing a helpful service to its consumers, both sides agree that banks are responsible for the emergence of payday loans.

“[Banks] are not providing adequate, fairly priced loans to consumers, which means the predatory payday lenders can flourish,” says Ed Mierzwinski, the consumer program director at the U.S. Public Interest Research Group, in an e-mail.

A wave of bank consolidations and mergers followed the major banking deregulation of the ’80s and early ’90s. A profusion of new bank fees followed, and small loans became tougher to find. For instance, SunTrust doesn’t offer loans under $3,000. Virginia National Bank will give loans to certain customers, but not for any amount under $500. Both banks do, however, feature overdraft protection, which could take the place of a payday loan for cash-strapped consumers. With overdraft protection, a bank offers credit to cover an overdrawn account—for a fee and/or interest. For VNB, overdraft money includes a 15.5 percent annual interest rate. The SunTrust overdraft option tacks on a $10 fee for every $100 borrowed.

Though not cheap, overdraft and other conventional banking solutions—with the exception of bounced checks—are generally cheaper than payday loans. But with fees rising for ATM transfers and even balance inquiries, people are increasingly looking toward the bright lights of payday loan stores. Since payday lenders first hit the scene in the early ’90s, the industry has exploded. At the beginning of 2003, more than 15,000 payday loan stores were operating around the country—a 50 percent increase in only two years. Payday lenders make $25 billion in loans each year to roughly 12 million households, according to industry estimates.

Payday lending came quickly to Virginia, sometime in the early ’90s, when check-cashing stores in the Tidewater region began giving unlicensed small loans, according to Jean Ann Fox, Yorktown-based director of consumer protection for the Consumer Federation of America. Though check cashing and payday loans often go together, and can sometimes be found under the same roof, they deal with a different clientele. Payday borrowers have jobs and checking accounts while checks cashed customers are often of the “unbanked” variety.

After a contentious debate, in 2002 the Virginia Legislature passed the rules for payday loans. Prior to this, a few payday loan stores had been operating in the State by partnering with national banks and thus avoiding Virginia regulation and the 36 percent cap on small loans.

State Senator Creigh Deeds, who represents the Charlottesville area, voted for the payday lending measure, though he says he thought long and hard about it.

“In an ideal world I would say payday lending would not be necessary,” Deeds says. But he says people need short-term loans, and that the market for payday lending was there.

“It wasn’t like we could make this industry go away,” Deeds says, adding that the final legislation was an attempt to “make some lemonade—even though it’s sour—out of lemons.”

The legislation went into effect on July 1, 2002, opening the door to payday lenders in the midst of a major economic downturn—the perfect market for payday lenders. Six months after the legislation went into effect, the state had 377 payday loan locations, and $165 million had been loaned out. Hancock says that since then the total number of locations in Virginia has grown to 623, with more licenses still pending.

While the payday loan industry’s trade group speaks of helping Americans get over a financial hump, the less sophisticated side of the business makes it clear that payday loans are indeed about wads of cash. “And the best part of all, most of your customers are repeat customers!” breathlessly exclaims the Web site cashnow.com. “Repeat Customers = Residual Income.” Another site also aimed at would-be lenders estimates that the average payday loan location clears $25,875 per month in loan fees.

But their loans are not usury, say industry representatives. Indeed, both the payday loan industry and its critics offer many statistics to compare its pricing to other forms of borrowing money [see sidebar].

For example, industry critics PIRG and the Consumer Federation of America issued a report showing that payday loans are far more expensive than credit cards. Calculated with fairly standard interest rates and fees, the report claims that the finance charge on a $200 credit card cash advance that is repaid in one month would be $8.41—a yearly interest rate of 50.46 percent. At the rates available in Virginia, a $200 payday loan would include a fee of $30. The annual interest on the loan would be 183 percent.

“Credit cards are expensive, but they’re still cheaper than a payday loan,” says Jean Ann Fox of the Consumer Federation of America.

Not always, says Woodward of the industry group. Slinging her own math, Woodward argues that the credit card fees for a late minimum payment could be $27 for a $100 credit card balance, which could trump the payday loan fee. Woodward also cites overdraft protection fees, bounced check fees from banks and merchants, utility bill late fees and even ATM charges, all of which can charge more interest than the typical payday loan in Virginia.

Though Woodward concedes that payday advances are not always the best option, she says they are always cheaper than a bounced check, the average fee for which is $25 per check, and merchants often charge their own fees in addition to the bank.

“It’s just like any other product, you have to weigh it against other alternatives,” Woodward says.

 

William chose to drop $37 at the loan center on Cherry Avenue instead of putting the $250 on a credit card and slowly chipping away at the credit. Why?

William says he has experienced more than his share of credit card debt woes in the past. For him, a quick payday loan was a simpler option than dealing with credit cards.

Fox says this is a common sentiment among the payday loan set. Some people are in deep with credit cards or don’t even have a card. Others have a bad credit rating. Perhaps most importantly, the ads for “cash now!” make payday loans seem so easy. With no nagging bills and no credit check, it’s over and done in minutes.

“It’s quick and it’s easy and it’s fast, and they have neon signs,” Fox says. “Who wouldn’t want to be able to write checks when they don’t have money in the bank?”

In essence, payday loans have become the fast food of the banking industry—an analogy that is bolstered by the profusion of payday loan stores. “It’s worse than 7-Eleven,” Fox says of the hundreds of payday loan centers now sprinkled around Virginia.

And it’s an industry that’s likely here to stay.

“Once you get the industry established in the state, it’s much harder to repeal it,” Fox says. “This industry is very generous, and they are big campaign contributors.”

For example, a recent Toledo Blade investigation found that Advance America, the nation’s largest payday loan chain and the company Woodward works for, hosted a fundraiser for Ohio Congressman Mike Oxley, who chairs the committee that oversees the industry. Advance America’s troops, the masters of quick cash, made sure that Oxley walked away with $42,000 in campaign donations from that single event.

Critics of the industry have pushed to subject payday loans to the 36 percent annual interest rate banks are limited to for small loans. They have also championed state-run databases like the one in Florida that identifies people who are stuck in a payday-loan debt cycle. Fox and other consumer advocates also suggest legislating a “cooling-off” period between payday loans for borrowers.

Woodward says the industry would oppose these reforms, and that the true goal of payday lending critics isn’t to protect consumers but to abolish the business altogether. As evidence, she says a 36 percent interest rate cap imposed on banks would be unworkable for payday lenders. And the industry claims that overheads and financial risks taken by short-term loan centers justify the steep fees.

“Frankly, they know that a company cannot make a loan for 10 cents a day,” Woodward says, citing the amount a payday lender could charge for $100 loan at the 36 percent rate. Furthermore, Woodward stresses the need to protect the right to small loans for customers who are “overwhelmingly satisfied with this product.”

When Governor Mark Warner signed the payday lender bill into law, he indicated that it was an issue that might warrant revisiting. And Sen. Deeds says he “has an open mind” about possible legislative protections for payday borrowers.

But as payday loan centers keep sprouting up in the State, and the industry continues to gain clout, slapping new regulations on the practice will not be easy. Some states have banned payday lenders outright. North Carolina flip-flopped, legalizing and later outlawing payday lending.

“A state can change its mind. It’s tough, but you can do it,” Fox says.

Ultimately, any attempt Virginia might make to crack down on payday loans will be hamstrung by the appeal of fast cash and the slippery world of the Internet. A two-second Web search turns up a ridiculous number of Internet-based payday lenders, some of which promise approval in 30 seconds and a transfer of funds within 24 hours. But the fees for Internet payday loans are sometimes double the Virginia rate.

With such hefty fees, there are few scenarios in which a payday loan makes any financial sense. Yet it seems only strong national legislation could successfully stamp out the fringe banking industry of payday lending. With legislators like Rep. Mike Oxley at the helm in Washington, buyer beware will continue be the governing principle behind the fast cash of payday loans.

An auction barker’s drawl and a musty smell fill the cathedral-like main room of the Boxer Learning building on the Downtown Mall. Two years before this bright Thursday afternoon, during the dot-com’s heyday, Gen-X employees could be found in the building breaking up the workday with a game of ping-pong. But in the lean days since the bubble burst, Boxer Learning, which deals math-teaching tools over the Internet, has shed employees and traded its swanky digs for a Court Square suite.

The auction crowd works its way through the large office, snapping up file cabinets, computers, chairs, desks—even artificial fruit and a refrigerator. Though not particularly gaudy by dot-com standards, Boxer Learning’s old haunts contain massive amounts of office equipment. More than 400 lots hit the blocks by the end of the day, some of them containing multiple items.

The former bank building appeared cleaned up on the day before the auction, but evidence of a hasty exit persisted. Half-erased on an ink board was the phrase “Fix Bogus Time-Spent Values.” Various desk drawers contained such things as notepads, tea bags, pill packs, candy, body lotion, and one contained a thank-you card. One former employee came by to claim the contents of his desk. Upstairs, a window stood open in a second-floor office containing only two trashcans and a piece of paper, which sat in the middle of the floor. The page was a February printout of “help wanted” ads from the Richmond Times-Dispatch.

Though Boxer Learning and colossal Internet bomb Value America’s old spaces have a ghost-town feel, there is still life in the dot-com community. At least a dozen local Internet-based companies are still clicking along, begging the question: What separated Charlottesville’s Web survivors from its pretenders?

 

The Internet thrust Charlottesville into the sphere of other second-tier Web meccas, such as Austin and Urbana-Champaign, Illinois, but only briefly.

“The bubble came to Charlottesville really late, and it left really early,” says local Internet vet John Paul Ashenfelter.

Charlottesville’s run as a Web player lasted roughly from the spring of ’99 until the fall of ’01, and included some spectacular highs and lows, most notably the implosion of Value America and the roller coaster rides of Kesmai and Boxer Jam. Today, Charlottesville’s Web herd has been seriously thinned. Local insiders say companies with vacuous business plans and questionable expertise have gone the way of the Dodo bird. Among Web survivors, many have had to dramatically scale back their operations. But most local Internet companies say business is good, perhaps even better than it was during the faux bonanza of the boom.

During those heady days, Charlottesville was an ideal venue for Internet startups. The Kesmai Corporation, a computer game pioneer, had given the City a techie toehold since the mid ’80s. UVA and Darden provide a steady stream of graduates looking for work, but the City lacks major corporations or other big employers besides the University. Dot-coms gave UVA grads a means of staying in Charlottesville.

Ashenfelter came to Charlottesville in 1995. He left a post as co-director of the Teaching+Technology Initiative at Darden to give dot-coms a whirl in 1998. After a stint at one startup, he hit the job-hunting circuit the following year. He was in high demand, and got about seven job offers in the weeks between Thanksgiving and Christmas. “It was just crazy,” he says. Ashenfelter eventually interviewed with Boxer Jam, a web-gaming company that had been founded in part by Julann Griffin, the then 70-year-old ex-wife of Merv Griffin and grandmother who conceived of the television quiz show “Jeopardy.”

After the job interview, Ashenfelter was asked if he wanted to report to work the next morning. On his second day of work, he says he worked on a risky new venture.

“We spent a quarter of a million dollars on [an executive’s] hunch and my tech analysis,” he says. “Boxer Jam, they burned through an enormous amount of money.”

A few months later, more cash found him, in the form of $500,000 in venture capital. Ashenfelter says he didn’t pursue the money, and that it came through “sort of a family-friend connection.” He quickly put together a tech firm called TransitionPoint and hired a couple of employees.

The new company’s plan was to offer programming and database expertise to Internet-based companies. They secured several clients, including a few in Charlottesville, but primarily focused on two large companies. As was common during the boom, the two big fish paid Ashenfelter’s firm in part with equity. This form of payment could be shares of stock in the company, or stock options, which are the option of buying a number of shares in the dot-com at a certain time and price.

“We were really rolling the dice on those two companies,” Ashenfelter says.

The gamble didn’t pay off, and about a year later, “things were really drying up,” Ashenfelter says. He tried to help his employees find other jobs, placing one at Value America. Now solo, Ashenfelter took work elsewhere, including stints at Capital One, the credit card company, and Darden, and wrote two books. But his company weathered the storm, and Ashenfelter says “the phone still rings.”

Ashenfelter’s experience follows the hackneyed dot-com storyline: Get a cash infusion, hastily hatch a business plan, spend like crazy, rely on uncertain revenue and wait for the inevitable crash. But while most dot-commers either made a killing by selling before their company completely fizzled (as did many of Value America’s brass) or walked away with nothing, Ashenfelter is still working in the field. He says his Internet experience has been the equivalent of an extremely expensive MBA.

“The bubble taught me a lesson that it taught a lot of people,” Ashenfelter says. “You really need a good business model. We’re still around, but the original model didn’t work out that well.”

Ashenfelter also echoes a common refrain among Charlottesville’s Internet survivors when he makes the surprising claim that more money was not necessarily a good thing back in the days of irrational exuberance.

“The money let me do stuff, but it also complicated things a bit,” he says, explaining that the venture capital cash cushion “made it easier to not plan as thoroughly.”

“I would’ve had to do things very differently if I had had to bootstrap it,” Ashenfelter says.

 

The most widely cited story of a delusional confidence boost from big venture capital was Value America’s CEO Craig Winn’s plans to buy a lavish private jet and build a corporate campus with hiking trails, all while the company hemorrhaged money and struggled with basic customer service. Indeed, several local Internet companies now in the black say they never scored high-dollar seed money, and instead kept their eye on profits, slow growth and landing a broad range of clients.

Rick White, a CPA and partner at Hoffman, White and Company, has worked with local Internet companies since 1993. In that time, he’s seen much of what works, and what doesn’t. White agrees that simple business virtues such as flexibility played a role in Charlottesville’s dot-com success stories. However, he says many failed local ventures were poised at the edge of making their ideas workable, but didn’t get the last necessary nudge. White say local investors were particularly cautious during the boom, and waited until they saw big money being made in Northern Virginia before timidly jumping into the Internet game. Many insiders echo this sentiment, and say investment in local dot-coms often came from Richmond, Washington or elsewhere.

The former vice-president of multimedia at Value America, Rusty Speidel, is one local Web vet who is still taking a chance on high-tech ventures. Speidel recently launched a foray into wireless entertainment, and says local money is of the “dribbing and drabbing” variety. “We need one more push to get over the top,” Speidel says of his company, Labrador Communications.

White cites local dot-bomb CubeCard as an example of a profitable idea that came close to getting off the ground—to provide a prepaid Internet purchasing card. He says CubeCard “had a lot of dominoes lined up” and that “if any domino had fallen” they would’ve made a bundle. Of course, investors in Value America and other colossal dot-com failures might argue that Charlottesville’s investors were wise to be cautious. And resentment certainly persists in the Charlottesville area over the massive dot-bomb layoffs that occurred while top executives reaped big stock-sale paydays.

Despite its recruitment of many skilled workers, White says Value America “did more to hurt the technology community in Charlottesville than it did to help it.”

According to Value America alum Speidel, who also worked for Kesmai and The Museum Company’s online component, dot-coms tried to become “the biggest and baddest” company in their field while failing to deliver their products. He says Boxer Learning is a great example of a good idea that wasn’t good enough.

“[Boxer Learning] got all big, but they didn’t think about profit. They thought about stock price,” Speidel says.

Musictoday.com is a local company that connects musicians and fans through Internet sales of tickets and gear, as well as by running online fan clubs. Though the middleman strategy of the privately held company is reminiscent of Value America’s corporate plan (see sidebar), Musictoday.com has managed to stay afloat.

“We are the tortoise. We did not have a lot of venture capital,” says Ford Englander, chief operating officer of Musictoday.com, which is owned by local developer and musical giant Coran Capshaw, also known as the manager of Dave Matthews Band. “We built our business in a more traditional sense. We had hard goods that we were selling.”

Local dot-commer Jack Smith also attributes part of the survival of his company, PeopleSpace, Inc., to the fact that he never got major venture capital. Also a Kesmai alum, Smith started PeopleSpace in 1997. The company develops games, polls and other interactive devices to help websites attract visitors.

“I never had a huge influx of money, so I’ve never been able to go nuts on a budget,” Smith says. However, his company still grew fast. By 2001 he had a monthly overhead of around $25,000. But when the economy took a nosedive after September 11, Smith lost several major clients, and came close to throwing in the towel. He says his frugality kept him afloat. An art collector, Smith “stripped the walls” and sold off his art to pay the bills. He also claims he stayed in New York City on business trips for as little as $20.

Though he has no employees, relying instead on two regular contractors, Smith says his client list is better than ever before. But he says he’ll avoid the profligate spending of the dot-com gilded age. Citing a dot-com insider cliché, he says he’ll never buy the expensive Aeron chairs that were popular during the boom.

“My conference chair is from Wal-Mart, with the canvas and the beer-holders,” Smith says.

Before the boom, Smith founded a regular meeting for local Internet workers. The group, which calls itself the Neon Guild, meets twice monthly and has about 350 members.

The Neon Guild’s first and only “Guildmaster” is Debra Weiss, who runs a Web design company called drw Design. With the aesthetic of an orderly housewife, Weiss hardly fits the slacker chic stereotype of the Web set. A silver scooter would look woefully out of place in her tidy home on Hedge Street, which serves as her office. Despite her mild-mannered appearance, Guildmaster Weiss doesn’t pull her punches when decrying the foolishness of dot-bombs, saying that many of them had a “business model based on air” and that often, “the idea was stupid, and unworkable.”

One particular failure cited by Weiss and other techies is NeigborhoodFind.com. Founded by local real estate agent and business owner Kenneth Clarry, the company strove to give the specs on the nation’s neighborhoods (schools, businesses, weather and more) to people looking to make a move. Clarry secured big dollars for the website, hired dozens of employees and hoped to have real estate agent sponsorship from all over the country. According to Smith and Weiss, Clarry’s vision was too rigid for the capricious nature of Internet commerce. Clarry’s company hit the skids, and he later died when the small plane he was piloting crashed near the Shenandoah National Park.

“[Clarry] didn’t bend as things changed in the market. I think initially it was a good idea, but he didn’t let it evolve,” Smith says.

In addition to flexibility, Charlottesville’s dot-com survivors highlight diverse clients as a key factor in keeping them afloat. And one of the ways local programmers and Web designers have found work over the years is through the Neon Guild, despite the fact that the group’s members are all competitors.

“We figured out a long time ago that this is a small town, and it’s better to collude than compete,” Weiss says. “It’s not who you know in Charlottesville, it’s who knows you.”

The Neon Guild has seen more than 1,000 members come through the doors over the years, and besides its networking payoff, Weiss says the Guild became a support group when the boom went bust. The group also spun-off a more formal organization for tech workers called the Virginia Piedmont Technology Council.

Smith says that beyond the Guild, other members of Charlottesville’s business society helped Internet workers when they fell down on their luck. For example, he says developers Gabe Silverman and Allen Cadgene and even local banks could be forgiving when money was tight.

“Charlottesville really is a community town,” Smith says.

Weiss says her Web design company has had some slower years, but claims she’s always managed to make a living. Rather than looking for the big score, she says she’s always worked with small and mid-size businesses. She currently has 50 to 60 clients, most of whom she’s worked with for more than five years.

Jennifer Hoyt Tidwell is a 1996 graduate of UVA who, along with three partners, founded her Web design company, Category4, in October 1998. She says her company has always worked with a broad variety of clients from among nonprofits, government agencies and educational institutions, rather than with a few big budget, but more volatile ventures. Tidwell says the decision wasn’t necessarily based on wisdom, saying that the company chose these projects because they were the ones in which she and her partners had the most interest.

But even colleges and government agencies demand a good product, and Tidwell says many other dot-coms just couldn’t deliver. She says many dot-coms were “trying to do too much” but were only competent at some of their work.

“A lot of people call themselves designers who had no business doing that,” Tidwell says.

Another crucial mistake cited by several dot-commers is one that almost tanked Ashenfelter’s company: the nonexistent paycheck. The massive stock payoff seemed just over the horizon for many in the business, so tech companies often offered stocks or options en lieu of actual payment. Weiss resisted this chimera.

“I wanted to be paid for my work,” Weiss says. “I don’t work on spec, and I don’t work on sweat equity.”

Category breaker
How Category4 resisted the Web’s excesses

The financial chart for most dot-coms looks like the profile of Mount Fuji—a steep climb followed by a precipitous decline. Category4, a Charlottesville-based Web hosting and design firm, has bucked this trend with steady growth. In 2001, Caegory4’s worst year, the company grew by 15 percent, according to founder and president Jennifer Hoyt Tidwell.

Tidwell, a 1996 UVA graduate, and three other UVA grads started the company in October 1998. They cobbled together $50,000, bought a printer and some hardware at Sam’s Club and began running the company out of a den in one of their homes. They hired their first employee the following spring, and now have 13 people on the payroll.

“We were just thinking, ‘We’re probably better as a group,’” than as freelancers or being unemployed, Tidwell says of the company’s founding philosophy.

During the boom, Tidwell and her partners thought the company would have as many as 25 employees by 2003, and that it would continue to almost double its size every year. When reality and the dot-com fantasy collided, Category4 focused on profitability instead of growth and worked on building a broad list of clients.

“It was just a matter of riding it out,” Tidwell says. “We knew the Web wasn’t going to go away.”

Over the past five years, Tidwell says Category4’s staff members have stuck to their specific skills of creative design or programming, rather than being jacks-of-all-trades. She says some of their competitors tried to do it all, “but it just wasn’t good.”

Tidwell sees a promising future for Category4, which will soon move into the new SNL Financial building on Seventh Street. Though successful in a turbulent field, Tidwell, who was an English major, says it wasn’t a path she envisioned.

“I never saw myself as a business owner,” she says.—P.F.

Valuable lesson
How one local dot-com company flamed-out big time

Perhaps no company embodied dot-com audacity better than Charlottesville’s own Value America, which sought to revolutionize retail by forging partnerships with manufactures and then selling goods online to consumers—all without any inventory of its own.

Value America managed to garner early high-dollar support from Fed Ex bigwig Fred Smith and Microsoft co-founder Paul Allen. On the day it went public in April of 1999, the company raised $145 million and the share price hit $74.

Value America’s founder, Craig Winn, was a billionaire on paper, but only for a day. Less than 16 months later, on the day when Value America went bankrupt, its stock was trading at 72 cents per share, 185 of its employees were let go, and its website was dormant.

In the aftermath of Value America’s flame-out, former executives and employees decried the company’s massive overspending and literal failure to deliver the goods.

“[Value America] couldn’t figure how to deliver products reliably,” says Rusty Speidel, a former company executive. He once ordered a washing machine from Value America, and says it was dumped on his driveway—hardly a sterling example of customer service.

While Value America’s rank-and-file were getting their walking papers—about 300 employees were laid-off just days before the holidays in 1999—several of the company’s top executives were reportedly making a mint on the company’s hollow value. Business Week reported that Winn made over $50 million on Value America, and C-VILLE Weekly found that several other senior company execs filed for stock sales valued at as much as $3.2 million.

“[Value America] is one of the great tragedies of this town,” says local Web designer Debra Weiss. “When they folded, they did it in such a rude, horrible way.”

For further reading on Value America, both Winn and Value America’s former flack, J. David Kuo, published books on the company’s saga. Ironically, Kuo’s book, dot.bomb: My Days and Nights at an Internet Goliath, received a favorable review on Amazon.com, Value America’s former nemesis.—P.F.

 

With the spring 2004 start of construction on Albemarle Place, the big box conquest of 29N marches on. The complex, slated for the northwest corner of Hydraulic Road and 29N, will be a 1.9 million-square-foot retail behemoth. Once it’s completed, shoppers will be able to literally live on the development’s grounds, which could include a hotel, a cinema and apartments, as well as high-end retailers like J. Crew and Pottery Barn.

But while development continues on 29N, many existing structures remain vacant in and around Charlottesville. A scan by C-VILLE of empty buildings in the area found 1,199,088 square feet of unused space—nearly equivalent to that aforementioned whopper of a space filler. With abundant real estate in locations like the former supermarket across from the Omni Hotel and the Boxer Learning building on the Downtown Mall, why are developers skipping the empty spaces and choosing to break new ground on 29N?

The answer, according to Ivo Romenesko, a professional real estate agent, president of the Appraisal Group, and chairman-elect of the Charlottesville Regional Chamber of Commerce, is population and job growth in Albemarle County.

“Over 80 percent of all major retailing is located along that 29 corridor,” Romenesko says. “We’re going to see a continuation of that trend.”

Additionally, the most practical means of development along roads like 29N is to merely knock down an existing Radio Shack or Home Depot and erect a new building, since strip mall and big box retail spaces are relatively cheap and simple to bulldoze and build.

Yet some developers are willing to roll the dice on what’s called “adaptive reuse” of existing buildings. A notable example is the 324,626 square feet of the Frank Ix building, which served as a textile mill for 70 years. Located just south of Garrett Square, the huge complex was purchased by local developer Bill Dittmar and partners for $5.3 million in 2000.

“It’s a unique location. It’s the largest tract of developable property near Downtown,” Dittmar says of the Ix building. “You couldn’t afford to build that core structure today.”

The historic facades of buildings such as the Ix factory and the Jefferson School—and the stories behind them—might even draw some local residents to future ventures. Romenesko says the vacant buildings near Downtown could house boutique hotels, restaurants, specialty retail shops and high-end office space. So while Target or Best Buy probably won’t be moving into the Ix building, Dittmar and other optimistic developers might have reason to hope that vacant buildings around town can one day find new tenants. Below is a list of some of the properties waiting for a second—or sometimes third or fourth—act.

Four corners
Wachovia buildings

Address: 101, 105, 107 and 111 E. Main St.

Area: 19,900 square feet (estimate)

Empty since: Various dates

Owner: Woodard Properties

Price: Not for sale

The story: The four buildings have housed numerous businesses and storefronts, including Gleason’s Bakery, which opened in 1953, became Dough Boy Bakery in 1976 and later Antojito’s. Also operating out of the buildings were Cato’s Dress Shop, Gitchell’s Studio, Daisy Shoe Center, Stacy’s Music Store and a bookstore. Beginning next year, Woodard Properties plans to renovate and rehabilitate the buildings, which sat empty the past four years while the former owners, D&R Development, battled City officials and each other. With that behind them, the buildings now house, on the ground-floor level, Mountain Air Gallery and the leasing office for Walker Square and Riverbend Apartment Homes.

Smart investment
Boxer Learning

Address: 200 E. Main St.

Area: 20,115 square feet

Empty since: June 2003

Owner: Lee Danielson

Price: Assessed at $1,650,000

The story: Citizens Bank built the original structure in 1931, on the site of an old bookstore. A 1966 renovation gave the building the marble and glass façade it has today. Recently, the building was home to an Internet company, Boxer Learning, and owned by the now-defunct D&R Development Company (see “Wachovia Buildings” above). When that company dissolved in a bitter lawsuit in 2000, a judge put 200 E. Main in the hands of receiver Gaylon Beights. In July 2002, the “D” of D&R, California developer Lee Danielson, purchased 200 E. Main and 108 Second St. SE from Beights for a combined $3.3 million. On December 4, The Daily Progress reported that Lee Danielson wants to build a nine-storey hotel on this site, and that on December 16 he will present plans to the Board of Architectural Review. Given the California developer’s tumultuous history with the BAR, the presentation promises to be spirited.

Class act
Jefferson School

Address: 201 Fourth St. NW

Area: 70,000 square feet

Empty since: Preschool program vacated in January 2002; still houses some classes

Owner: City of Charlottesville

Price: Assessed at $4.5 million. The City says Jefferson School will need a major overhaul, at an estimated cost of about $10 million, although State and Federal tax credits will cover 45 percent of the rehab cost.

The story: The 100-year-old Jefferson School building was the center of black education in the days of racial segregation, and one of the few structures to survive the “urban renewal” of Vinegar Hill. In January 2002, the Charlottesville School Board voted to move the City’s preschool program out of Jefferson School, and City Council prepared to sell the building to developers. A group of citizens fought the sale, so Council created the Jefferson School Task Force to decide the building’s fate. In December, the Task Force will likely recommend Jefferson School become the new home for the Jefferson-Madison Regional Library or a social service and education center.

Shaping up
Ivy Industries

Address: 111 Monticello Ave.

Area: 64,378 square feet of warehouse space currently available

Empty since: April 2003

Owner: 111 Monticello Avenue, LLC

Price: Previously listed at $6.2 million

The story: Built in 1983, the site was most recently home to picture frame-maker Ivy Industries, which went out of business after CEO John C. Reid was nabbed in a check-kiting scheme earlier this year. New owner Coran Capshaw is shopping for tenants, and the real estate rumor mill says the fitness club ACAC is likely to move in soon.

Money talks
SNL Building (and annex)

Address: 321 E. Main St.

Area: 53,643 square feet

Empty since: August 2003

Owner: SNL Financial

Price: $3,750,000

The story: The building was constructed in 1955 and originally housed a department store. Later, Jefferson National Bank & Trust Co. bought the space and used it as an operations center. Wachovia eventually acquired Jefferson National Bank. In 1998, SNL purchased the building and renovated it at a cost of about $2 million. It then became the SNL Financial headquarters. Around five years later, in August 2003, SNL fully vacated the building. It is currently assessed at $3,887,700.

Travel plans
Lakeland Tours

Address: 2000 Holiday Dr.

Area: 24,279 square feet

Owner: Holiday Drive, LLC (Andrew Dondero, CEO)

Price: For sale at $2,400,000, with an additional two acres of land for an extra $500,000. For lease at $13 per square foot.

The story: General Electric built this faux colonial building in 1966. Since then it has been owned by a now-bankrupt petroleum company from Mississippi and Lakeland Interstate Tours, Inc., hence the building’s nickname. The building was fully renovated in 1985, and sold to its current owners in 1998 for $2.6 million. The building now is owned by Keswick’s Andrew Dondero, and a portion of it is home to 1st American Mortgage and the Piedmont Housing Alliance.

Bargain shopping
Save-A-Lot grocery

Address: 243 Ridge-McIntire Rd.

Vinegar Hill Shopping Center

Area: 24,500 square feet

Empty since: 2000

Owner: Piedmont Land Trust

Price: Lease for $9 per square foot

The story: The original King’s Market grocery store was built in 1978. It was eventually purchased by the Richmond-based Richfood, and finally closed for good as Save-A-Lot in 2000. The building operated as a grocery store throughout its 22-year lifetime.

Deals loom large
Frank Ix building

Address: 601 E. Market St.

Area: 324,626 feet

Empty since: November 1999

Owners: William D. Dittmar, Gabe Silverman, Allan Cadgene and Ludwig Kuttner

Price: Lease for $7 per square foot

The story: Frank Ix & Sons was a textile company that produced dress fabric, as well as material used in sailing equipment, backpacks and bathing suits. Its Charlottesville plant, a 17-acre facility, was the largest of the company’s six mills, and the last to shut down (in 1999). Construction began on the textile mill in 1925, and it opened in 1929. In June of 1973, The Daily Progress reported that Ix & Sons added 60,000 square feet to the factory and hired 150 new employees, bringing the total number of workers to 650. But the company’s boom subsided, and it began a gradual decline that lasted throughout the ’90s. Ix eventually filed for Chapter 11, and the Charlottesville textile mill stopped production on October 29, 1999. The building has hosted several art events since closing. Developer Bill Dittmar and partners bought the site in 2000 for $5.3 million. Though the site is currently assessed at $4,589,700, the buildings appear dilapidated, and are missing many walls. Still, several tenants, including CK Courier, Stafford Insulation, Telephone Services, AIDS Service Group, and JADE (Jefferson Area Drug Enforcement) are already in one portion of the building—pioneering the landscape for the retailers, professionals and City dwellers that Dittmar and associates hope will follow.

Blue light special
K-Mart Plaza

Address: 1801 Hydraulic Rd.

Area: 41,414 square feet

Empty since: Food Lion closed in September 1999

Owner: Peyton Associates Partnership

Price: Vacant building sites recently assessed at $2,836,000

The story: A company called Charlottesville Plaza, Inc. built the K-Mart building in 1964 for $600,000. The building included the space later occupied by Food Lion and Brown’s Cleaners. The Terrace Theatres cinema was added in 1974. In 1997, the buildings’ owners, Peyton Associates Partnership, wrote the City assessor’s office in the hopes of getting a lower tax assessment. Willard N. Clayton, the city assessor, responded that the space was located in “the hot spot” for commercial development in Charlottesville, and the request for an eased tax rate was nixed. The Food Lion closed in September 1999 and the space remains empty. Brown’s Cleaners and the Terrace Theatres are also vacant.

Long-distance operator
Comdial

Address: 1180 Seminole Trail

Area: 454,900 square feet

Empty since: Late 2002

Owner: Seminole Trail Properties, LLC.

Price: Sold for $11.4 million in March 2001

The story: The facility was built in 1954 and originally housed the manufacturing operations of the United States Instrument Corporation, which produced telephone parts. Comdial Corporation, also a telecommunications company, purchased the site from military-industrial giant General Dynamics in 1982. In 2001, Comdial moved its corporate headquarters to Sarasota, Florida, and sold the manufacturing plant. Comdial leased some of the site to house a small numbers of engineers. Those straggling employees left the building about one year ago. The property is currently assessed at $11,820,100.

Material gains
Institute of Textile Technology

Address: 2551-2555 Ivy Rd.

Area: 28,033 square feet

Empty since: Late 2002

Owner: Ivy Road Properties, Inc.

Price: Sold for $6,600,000 in August 2003

The story: The Institute of Textile Technology (ITT) and the North Carolina State University College of Textiles formed an alliance in November 2002, and all of ITT’s operations were subsequently moved to the NC State’s Centennial campus in Raleigh, North Carolina.

Under Valued
Hollymead Professional Center

Address: 1522-1560 Insurance Ln.

Area: About 5,300 square feet

Empty since: Late 2000

Owner: Charles Hurt, Virginia Land Company

Price: Lease for $15 per square foot

The Story: The Hollymead Professional Center comprises five buildings, each about 6,000 square feet. It was built four years ago for notorious dot-bomb Value America, which all but vacated the premises two years later. A small portion of the site is currently home to a collection of offices for companies like Remax Properties, Dr. Wesley Haddix, Old Dominion Equine, Edward Jones and Associates and Larry Miller, attorney.

Off-campus campus
Town Center One in the UVA Research Park

Address: 1000 Research Park Blvd.

Area: About 18,000 square feet

Empty since: 2001

Owner: UVA Foundation Real Estate Foundation

Price: Full service lease for $19.25 per square foot

The story: UVA built Town Center One in September 2000 for Qual Choice, an insurance company now called Southern Health. When Southern Health downsized two years ago, it vacated 30,000 square feet, and new high-profile tenants, such as TIAA-Cref, Northrop Grumman IT and Angle Technology, moved in to some of the space.

Not too late
Earlysville Professional Center

Address: 395 Reas Ford Rd., Earlysville

Area: 50,000 square feet in warehouse, 15,000 in office

Empty since: Technicolor moved out in December 2002

Owner: 4F, LLC

Price: Lease for $4 per square foot for warehouse space, $7-10 per square foot for office

The story: The Earlysville Professional Center was built in stages between 1960 and 1985 by Murray Manufacturing Company. The building, currently home to Earlysville Medical Practice, Downtown Athletics, Crutchfield and National Linen, is three miles from the airport, and is wired for high-speed Internet.