C-VILLE Weekly’s planning and development coverage features regular stories on Charlottesville and Albemarle County real estate and local government actions.
Each year Albemarle County forgoes about $20,000,000 in taxes on land use parcels, but the exact figure is not known to the public since the amount is not carried as a line item in the budget and there is no public discussion as far as I can determine.—Harold Timmeny
Land use is one of themore arcane topics about which readers inquired. (Next up: revenue sharing!) Officially called Use Value Taxation, land use is an incentive to rural property owners to use their land for agricultural purposes rather than subdivisions. Albemarle adopted land use in 1973, and the program periodically draws criticism that it doesn’t thwart growth and is a tax break for the rich.
Currently 4,600 parcels in the county are taxed under the considerably lower land use rate rather than market rate, according to county assessor Peter Lynch. To qualify, a property owner must have five acres in agricultural use or at least 20 acres as forest.
He gives an example: Say the market value of a rural parcel in the county is $544,400. Under land use, if at least five acres of that property is producing an agricultural product, like hay, the parcel is valued at $21,100 and the owner pays taxes of $177 a year rather than $4,567 if it were assessed at market value.
It adds up to a differential of over $1.5 billion between market and land use value in Albemarle in 2018, says Lynch. That means the county deferred over $13 million last year in property tax revenue.
The $13 million the county forgoes in revenue is not a line item in the budget because the program is already established by state law and county ordinance. “It’s already a requirement,” says Lynch. “It’s not something to vote on in the budget.”
The rate Albemarle uses to determine land use values comes from the State Land Evaluation and Advisory Council, which establishes values specifically for Albemarle, says Lynch.
Land use, he says, “is a choice for the county to preserve rural areas.”
Longtime housing activist Joy Johnson helped found PHAR two decades ago, and still leads its board of directors.
Photo: Eze Amos
When Joy Johnson moved to Westhaven in 1983, she was a single mom with four young children. She barely had time for everything that needed to be done, let alone those things that seem like you can put them off indefinitely.
But the fliers kept showing up – in her mailbox, on her door, by her street, at her neighbor’s – and she kept reading them.
They came from the Westhaven Tenants Association, which was comprised of mostly older residents and focused on updates to the project’s apartments, which had been built two decades earlier.
Johnson was busy, but she was interested. “People said to me, ‘You like to read all that stuff,’” she says. “They told me I should get involved.”
From those early tenant association meetings, Johnson went on to become an integral leader in the organization and became known for speaking up. (In the annals of Charlottesville’s local news, Johnson’s name is hard to miss.) In 1998, she helped the city’s disparate public housing associations and tenants’ groups band together into a single advocacy organization: the Public Housing Association of Residents.
PHAR gave Johnson and all of the residents of the city’s 376 public housing units a vehicle to make themselves heard. Two decades later, the organization’s role has grown from advocating for repairs and improvements to individual public housing developments to becoming a voice in the city’s ongoing debate around low-income and affordable housing.
From leading a class-action lawsuit against the city’s housing authority for excessive utility fees to making sure residents have a say in redevelopment, members of PHAR have fought for the rights of Charlottesville’s low-income, chronically underrepresented citizens. Sixty-seven residents have taken part in PHAR’s internship program, and most have gone on to serve on PHAR’s board of directors. A handful have served on the board of the Charlottesville Redevelopment and Housing Authority, which controls the city’s public housing, and more have worked on various other city boards and commissions.
Rather than passively allowing the city to determine housing policies, PHAR’s members seek to lead the city’s public and affordable housing redevelopment and improvement process. And the years of showing up at meetings, getting in front of the microphone, and saying what residents want and need has paid off. CRHA Director Grant Duffield says PHAR’s 2016 policy publication, “Positive Vision for Resident-Directed Redevelopment,” has become “a guiding document for CRHA and the community as a whole.”
“For 20 years, PHAR has shown anyone who might think otherwise that the most vulnerable members of our community can speak up and advocate for themselves,” says UVA researcher Laura Goldblatt, a member of the Charlottesville Low-Income Housing Coalition. “They’re a model of what responsible and respectful community organizing and solidarity looks like.”
On September 29, PHAR celebrated its 20th anniversary with a party at Carver Recreation Center. Photo: Eze Amos
“Charlottesville’s history with public housing, like most cities’, is tainted by its direct connection to urban renewal in the 1960s,” says Brandon Collins, PHAR’s lead organizer.
The city’s first public housing development, Westhaven, was built for residents displaced by the destruction of Vinegar Hill, a 20-acre historically black neighborhood situated just west of downtown. Commercially, the land was in an incredibly valuable location, and the city used a measure allowing the new housing authority to demolish “unsanitary and unsafe” homes to force residents out. But while the neighborhood may have had some issues, like any other, it was also home to the city’s largest concentration of black-owned businesses. Former residents say it was a tight-knit, independent community.
“This taking of black land and community was fundamentally unfair, and left a once thriving community in ruins” says Collins. It’s something he says people have “barely had a chance to try to recover from.”
The Westhaven Tenants Association, began by its residents, was a step toward that recovery. For two decades prior to Johnson’s arrival it had been advocating for tenants’ rights—but on a relatively small scale.
“Even though the tenant organization was well-organized and on point with what they were saying, their biggest fear was to speak in front of City Council,” Johnson says. But she was more than happy to take on that role.
At her first City Council meeting, Johnson highlighted the issues the group wanted addressed—trash in yards, lack of fencing, and deteriorating conditions. At the time, the city councilors were also the housing authority board of commissioners, and they questioned Johnson’s motives, wondering if she was speaking for herself or for everyone at Westhaven.
“The idea was to make it like it was just me complaining,” she says. “They had been the city councilors and housing authority commissioners for years but had not set foot in public housing.”
Soon after that first meeting, the city councilors and other city officials toured Westhaven. After that, Johnson says, things started to move more quickly.
Still, by the late ’90s, the city had an unimpressive rating from the federal Department of Housing and Urban Development on its public housing management and maintenance. Charlottesville had eight public housing developments, most built in the 1970s and not significantly updated or improved since their construction. And while each of the housing developments had its own advocacy association, like Westhaven’s, they were generally focused on individual improvements, and sometimes pitted against one another. When it came to citywide housing policy, low-income residents still didn’t have a seat at the table.
Johnson and other resident association leaders realized they neededa collective voice to advocate for their rights. The groups “passed a hat,” as Johnson puts it, to cover the cost of filing an application for nonprofit status, and PHAR was born.
Westhaven, Charlottesville’s first public housing project, was built in the 1960s to house residents displaced by the destruction of Vinegar Hill. Photo: Jack Looney
As Johnson’s advocacy experience grew, she began traveling to national housing conferences and learning from other activists, like Willie “J.R.” Fleming.
Fleming calls himself a human rights enforcer. He was born in Chicago’s Henry Horner Homes and spent his formative years at Cabrini-Green, one of the country’s most notorious public housing complexes.
Cabrini-Green, at its height, had 3,607 units and housed more than 15,000 people on Chicago’s Near North Side. Though infamous for violence and neglect, Fleming says it’s often overlooked that the housing development also served as a community for its residents. People knew their neighbors and looked out for each other, they shared what they had with others who didn’t have as much or any, and they felt a sense of place.
Just like at Westhaven, there were Cabrini-Green residents who were actively advocating for their rights as tenants—even as the buildings were coming down around them. J.R. (stands for “Just Righteousness”) saw how his sister was forced to relocate when the city began demolishing the complex in 1995, and he was inspired to act.
At 45 years old, J.R. has now been a housing activist for more than half his life, but he says he was “an infant in organizing” when he met Johnson.
“PHAR was determined to fight off bad public housing policy regardless of who stood with them,” Fleming says. “I was impressed by their willingness to work in a collective and their commitment to learn different ways of fighting for residents’ rights.”
Fleming and members of his Anti-Eviction Campaign, which he co-founded in 2009, partnered with PHAR to offer their expertise working in public housing advocacy.
One result is a project PHAR began last year, in collaboration with the housing authority and Habitat for Humanity of Greater Charlottesville. The program trains public housing residents to repair and maintain homes, paying them to work 40 hours a week alongside Habitat volunteers and learn construction skills. With money the housing authority had allocated to repair 20 vacant public housing units, the first group of trainees set to work last spring.
Richard Shackelford, a 65-year-old Charlottesville native, is a resident of Crescent Halls and serves on PHAR’s board of directors. Photo: Eze Amos
Richard Shackelford—”Shack” to his friends and neighbors—grew up in Charlottesville, on the corner of Fifth and Harris Streets. In 2014, in his 60s, he moved to Crescent Halls, a public housing high-rise for elderly and disabled residents, after he and his wife lost their house.
Residents of Crescent Halls have long complained of poor maintenance and deterioration in the 105-unit building, which was built in 1976. In 2016, protesters outside the Monticello Avenue complex told of broken air conditioners and roaches. According to media reports, the cooling problems continued in 2018, when a backed-up sewage line also caused foul-smelling flooding.
When Shackelford heard about PHAR’s six-month internship program, which teaches residents to become advocates, he decided he wanted to be part of a group fighting for change.
The training initiative, begun not long after PHAR’s founding, remains one of the organization’s flagship programs, and a major part of its efforts to build capacity, or “people power,” as Johnson likes to say. The goal is to continue to build the network of community organizers and activists fighting for housing rights.
“At first, we had to help residents understand that they already had the skills, they were already ‘organizing,’” Johnson says. “In their day-to-day lives, they are organizers. Getting kids ready for school, having a cookout, planning a trip—that’s organizing. We’re teaching them to use those skills they already possess to become leaders.”
Nearly all the residents who complete the program go on to find jobs, the group says, and many have continued to work actively as housing advocates. Two former interns, LaTita Talbert and Audrey Oliver, are currently commissioners on the CRHA board
Shackelford completed the internship in 2016. It not only showed him that his concerns were bigger than himself, it taught him how to advocate for those concerns as a part of the policy-making process.“The internship program got me motivated to help people do better,” he says. “I thank God for PHAR.”
Now, Shackelford serves as a member of PHAR’s board of directors and the CRHA Redevelopment Committee, and he is vice-president of the Crescent Halls Tenant Association. He’s committed to addressing the problem of housing affordability in Charlottesville.
“I’ve been here 65 years,” he says. “I’ve got some history.” He says that working people like teachers, police officers, and nurses, who could afford to own homes in the city decades ago, are now priced out.
The median home price in Charlottesville is currently $412,700, according to Zillow.com. The median rent is $1,600—that’s roughly $1,200 more than someone making minimum wage (which is set at $7.25) could afford, according to the National Low Income Housing Coalition. “Fair market rent,” set by HUD at 40 percent of typical rents, is higher in the Charlottesville area than in 95 percent of the state.
In taking on the affordability crisis, PHAR tries to lead by example, paying its interns $11 an hour—a sum that’s significantly higher than minimum wage, if still not enough to cover Charlottesville rents.
PHAR has also incorporated the larger issue into its advocacy work. In 2017, the group worked with the Legal Aid Justice Center and other community leaders to create a new advocacy organization, the Charlottesville Low Income Housing Coalition, to push for a city housing strategy that respects low-income residents and to raise awareness of gentrification.
Over the years, PHAR has had some contentious moments with city government, and even within the organization—some residents have criticized it as too confrontational and reactive. So the group’s Positive Vision for Redevelopment plan was built around the idea of focusing on public housing initiatives residents support, rather than those they are against.
The organization worked with hundreds of residents to find a consensus on ways they can help lead the city’s process of improving public and affordable housing. The resulting 18-page document outlines residents’ key priorities, including green space, workforce development, and access to medical care, childcare, grocery stores, and other businesses. Residents also say they want to be kept informed and involved in decision-making, and want to preserve the positive aspects of existing communities.
Much of what residents are seeking in the ‘Positive Vision’ is what was lost in Vinegar Hill. Rather than simply calling for redevelopment, PHAR organizer Collins says, the document asks for an approach that places residents in control, increases affordable housing stock, confronts gentrification, and makes some amends for urban renewal and the rest of Charlottesville’s negative racial history.
CRHA Director Duffield says that while his agency and PHAR haven’t always gotten along, he is looking to change that: “I am imparting on my staff the tremendous value that PHAR brings to the issue of affordable and low-income housing,” he says.
Charlottesville’s public-housing discussion differs from the conversation in much of the rest of the country, because the city is investing not just in maintaining or renovating current properties, but in building more.
“Charlottesville is unique in saying that public housing is valuable,” Duffield says. “A system that solely embraces private, voucher-based affordable housing, which is what many cities are moving toward, does not serve many of the individuals we are proud and committed to serving here.”
Plans call first for developing new public housing on city-owned land on South First Street and on Levy Avenue. Crescent Halls tenants would move there, and that complex would be redeveloped. PHAR members and CRHA are working together to hammer out the details, ensuring that residents have a say as development moves forward.
PHAR is also working on a program that will provide economic and employment opportunities for residents as the city undertakes redevelopment and development programs, like the partnership with Habitat for Humanity. The group is no longer just “at the table,” Collins says: PHAR is setting the table, serving the food, and letting folks know when it’s time to eat.
Johnson has led PHAR now for two decades. As its members celebrate those years and look to the future, many of them, Johnson included, are seeking the next generation of leaders to take the helm.
“To quote my co-worker’s 5-year-old, ‘It’s important work,’ says Wandae Johnson, PHAR’s new intern coordinator. “There is a large group of people who are no longer part of our community because they couldn’t keep pace with the rising cost of living facing us over the last decade.
“Housing is related to my child’s educational outlook, my job satisfaction…It’s related to my sense of safety, and my ability to be active within my community.”
“It’s important,” she concludes. “Why isn’t everyone involved?”
Residents of the 1976-built Crescent Halls have complained for years about its deteriorating condition. Jack Looney
Music and real estate mogul Coran Capshaw’s Riverbend Development, known for 5th Street Station, the Flats, and City Walk, among many other projects, is now aligning itself in a different direction: a partnership with Charlottesville Redevelopment and Housing Authority to build new public housing for residents of the crumbling Crescent Halls.
Riverbend and the nonprofit Virginia Community Development Corporation will build units on city-owned Levy Avenue—now a parking lot for city employees—and green space on South First Street.
“They’re not looking to make a profit,” says former mayor and current CRHA redevelopment project coordinator Dave Norris. “They’ve agreed to waive the developer’s fees.”
The housing authority owns and manages all public housing in Charlottesville, and had a request for proposal for a redevelopment partner, says Norris. “Riverbend submitted a proposal and rose to the top because they’re local, they know the community, and they know how to negotiate the process.”
Says Norris, “They want to be part of the solution. I don’t think it’s a coincidence Coran’s office is across the street from Crescent Halls.”
Residents have complained for years about the deteriorating condition of the Monticello Avenue highrise, including its malfunctioning elevators and air conditioning, and, earlier this year, a plumbing backup that left the first floor smelling like sewage.
The actual redevelopment of Crescent Halls is not part of phase 1, which relocates the building’s 105 households, says Norris. He says they will be given the option of replacement units, housing vouchers, or assistance moving into market-rate housing.
The project is going to be resident-directed, he says, and Riverbend’s willingness to work with the residents is “pretty extraordinary.”
Not all are comforted by Riverbend stepping in. Community activist Jojo Robertson says, “There is much skepticism and mistrust in the community, which we must acknowledge. I am concerned that people may be homeless during this process.”
Norris acknowledges that those living in Crescent Halls have been hearing for years about redevelopment plans. “I think what residents want to see is action rather than talk.”
He notes that it’s a “long, long wait” to get in public housing, and the redevelopment plans are “not just about improving the quality, but also the quantity” of public housing.
City Councilor Wes Bellamy calls Riverbend’s foray into the affordable housing arena “major. It is absolutely major.” He says city officials have been working on the issue for years.
“I think it’s specifically to curry favor, and I’m all in favor of currying favor,” says Belmont resident Joan Schatzman, who has been a critic of Riverbend’s Belmont plans, but commended its involvement in public housing.
The notoriously press-shy Capshaw did notreturn a request for comment from C-VILLE, nor did Riverbend president Alan Taylor.
Capshaw also manages the Dave Matthews Band and owns Red Light Management. Last week’s announcement of DMB’s upcoming tour said a portion of proceeds from the two shows at John Paul Jones Arena will support redevelopment of public housing in Charlottesville.
Growth area Pantops, with its increased density and worsening traffic, has long needed a fire and rescue station, and one has been on the books maybe dating back to Thomas Jefferson, joked Albemarle Fire Rescue Chief Dan Eggleston at the official opening May 7 of Pantops Public Safety Station No. 16.
Certainly the station has been in the county’s comprehensive plan for more than two decades, but was stymied by the recession that slashed Albemarle’s capital spending for years. “This is a big day,” says Eggleston.
Albemarle Rescue Fire Chief Dan Eggleston welcomes a new facility in congested Pantops. Staff photo
As Pantops continued to grow, its demographics changed and 23 percent of its population is over 65, says Eggleston, while emergency response times for the area could be 10 minutes, “well above what we consider acceptable.” Indeed, nearby Westminster Canterbury provided refreshments for the station’s debut.
The $2.9 million facility was aided by Anne Worrell’s donation of land from Worrell Land and Development, saving the county “several million dollars in land acquisition costs,” says Supervisor Norman Dill, who represents the Rivanna District that includes Pantops.
Supervisor Norman Dill was on hand to cut Station No. 16’s ribbon. Staff photo
Another reason for the station is Pantops increased traffic woes. Dill notes 50,000 cars coming down U.S. 250 every day “and sometimes they crash into each other.”
Currently the facility offers only rescue services during the day, but Eggleston is eager to expand service to 24/7 fire and rescue.
Six Hundred West Main is scheduled to open next fall.
IMAGES courtesy six hundred west main
Next fall, residents of a new housing complex on West Main Street might have 99 problems, but their apartment won’t be one of them—or at least, that’s the verbiage that was handed out on keychains at Six Hundred West Main’s metaphorical groundbreaking ceremony last week.
Despite pouring rain, about 40 people and a bulldog named Butch came out to the future site of the swanky apartment complex set to open behind the Blue Moon Diner in 2019.
More reminiscent of a concert than a press conference, the event featured black graphic tees that nodded to the desire for backstage passes and edgy, apartment-branded posters that were up for grabs at a merch table about 20 feet in front of the stage, where developer Jeff Levien, designer Ivy Naté and architect Jeff Dreyfus shared some words about their project.
“We’re sort of reclaiming West Main Street for the rest of the city,” said Dreyfus.
The group made it clear that the apartments aren’t for UVA students, and Naté said one reason Charlottesville needs such a space, which will have its own art gallery, is because it lacks “curated design” for its non-student population.
Rental costs aren’t established yet, per Levien, who also declined to comment on how much the project cost. Levien and Naté, who are married and moved to Charlottesville from New York City about five years ago, have tag-teamed on a number of developments, but this will be their first in the city.
This one will feature modern design elements such as perforated metals and glass, according to the architect, a principal of local firm Bushman Dreyfus Architects, who couldn’t help but mention Thomas Jefferson: “That’s what he would be using today,” Dreyfus said.
A rock ’n’ roll theme has dominated the marketing for West Main’s newest digs. “Is it a little rock ’n’ roll?” asks Naté. “Definitely. But it’s where rock ’n’ roll goes to kick back.”
The quote appears in a folder that was handed to reporters, which features a photo of Naté and Levien at the Blue Moon bar. Levien, sitting on a barstool and pouring an inordinate amount of either sugar or cream into a cup of coffee, stares longingly at his wife, who’s positioned on the countertop sucking back a shot of Jack Daniel’s while wearing aviator sunglasses, studded jeans and platform boots.
Levien credits Naté with the theme.
“She’s much cooler than I am,” he says, a gray beanie on his head that he claims his wife made him wear. As Butch, the pair’s dog, sniffs his leg, the developer says hints of the rock ’n’ roll lifestyle will be carried into the apartment design, with dark bathrooms, dark kitchens, chandeliers and the art gallery.
For what Levien called the “proverbial shovel in the ground,” folks who’ve had a hand in bringing Six Hundred West Main to life put on black hard hats but ditched the golden shovels often used during such a ceremony. Instead, with a giant stencil and a few aerosol cans of paint, they permanently sprayed the apartment’s logo onto the pavement, as “Kansas City” by The New Basement Tapes played over a loudspeaker.
For perhaps the first time in Charlottesville’s history, an apartment complex comes with its own Spotify playlist. Give it a listen at spoti.fi/2poxUPO.
Between now and the grand opening, the Six Hundred West Main team will do 600 hours of community service.
“I think being of service is a true example of good teamwork,” says Levien. “I could go on and on, but this isn’t an Oscars speech.”
Multiple other recently developed or under-construction apartments and hotels dot West Main.
Since the 2010 census, Charlottesville has grown 13 percent, more than any other Virginia city, according to Chris Engel, the city’s director of economic development. And the city has set aside $31 million for a West Main Street facelift.
“People are coming to Charlottesville like they’re going to other big cities,” says Engel says. “The point of cities is multiplicity of choice.”
The skinny
Looking for a place to live? Six Hundred West Main offers:
Now we’ll never see more than a rendering of West2nd, the $50 million development of luxury condos and retail space that had been proposed at the current site of a Water Street parking lot since 2014. Rendering Keith Woodard
During yet another out-of-control City Council meeting on April 2, Mayor Nikuyah Walker cleared the chamber and councilors reconvened after a closed session to seek legal advice on how to maintain order. Nearly two hours into the meeting, councilors began to address the city’s business, and by 10pm approved by a 4-1 vote a special use permit for West2nd.
Developer Keith Woodard appeared before council in February seeking another floor and another 28 units in the L-shaped building that will be built on a city-owned Water Street parking lot and will house City Market, parking, office, retail and luxury dwellings.
That plan was rebuffed 3-2, with Councilor Wes Bellamy bartering with Woodard to increase the number of affordable housing units he proposed to build on Harris Street at a cost in excess of the $316,000 Woodard could contribute to the Affordable Housing Fund, as most developers do.
This time, Bellamy “wholeheartedly” supported the permit. Woodard agreed to build eight units that would remain affordable for 15 years, and another eight units that the city would subsidize using property tax revenue from the West2nd project.
Previously, Vice Mayor Heather Hill and Walker nixed the plan because of concerns it would not sufficiently serve City Market. Hill said her concerns about the market had been appeased, but Walker was not swayed and voted no.
“I still don’t support the project,” she said, focusing on the difficulty of achieving equity when nearly 100 luxury units are built downtown and 16 affordable units are built in another part of town.
“To do something bold, we need tax revenue,” argued Bellamy. “This is the innovation people have been talking about.”
Members of a local upscale fitness club will soon be looking for a place to park.
Apex Clean Energy—a company devoted to developing, constructing and operating wind and solar power facilities—announced plans March 1 to build a new headquarters on Garrett Street to house its 170 local employees who are currently spread out among three offices in town. The seven-story, 130,000-square-foot building will go right atop the downtown ACAC Fitness & Wellness Center’s gravel parking lot.
“We are happy to have Apex coming in as our neighbor,” says Meghan Hammond, senior marketing director of the fitness club. Staff is currently working on ways to “ease parking challenges” during construction.
Though Apex is knocking out the approximately 125-space gravel lot, a new parking garage with more than 380 spaces is included in its site plans, according to Hammond. It’ll also include—no surprise—multiple electric vehicle charging stations.
“Two hundred spaces in the garage will be open for ACAC clients during club hours,” says John Bahouth, senior vice president of administration at the renewable energy company that grew from fewer than 10 employees to 220 in nine years. And of those employees, one in five participates in the company’s incentive program that encourages them to cycle, walk or rideshare to work.
The new headquarters will be designed by architectural firm William McDonough + Partners, and developed by Riverbend Development, which plans to offer 10,000 square feet of retail space on the ground floor. Apex offices will anchor the building and occupy 60,000 square feet.
Apex expects a mid-spring ground breaking with a 24-month buildout. Its goal is for the building to generate its own energy.
“Our exact energy plans are still in process, but we’ll for certain generate energy from solar panels,” says Bahouth. The building is designed with a green roof and its location maximizes natural lighting and fresh air circulation.
Green roofs are partially or fully covered with soil, plants and vegetation, and one has existed atop City Hall and the Charlottesville Police Department since 2008.
Jim Duncan, who works out of the nearby Nest Realty office, calls Apex’s planned addition a “huge net positive.”
He’s an advocate for vertical density downtown. And as a friend recently punned, Duncan says, “Charlottesville’s growing up.”
“There’s always likely to be some consternation about more traffic and more density and the parking that comes along with it, but ultimately I think it’s the evolution of the city’s center,” he adds. “Hopefully it will entice people to walk more and ride their bikes more often.”
Now we’ll never see more than a rendering of West2nd, the $50 million development of luxury condos and retail space that had been proposed at the current site of a Water Street parking lot since 2014. Rendering Keith Woodard
When Mayor Nikuyah Walker chaired her first City Council meeting February 5, citizens got to see how previously out-of-control meetings would be run under a new regime—and learned that the heckling continues both for councilors and for the West2nd developer seeking a special use permit that was rejected for reasons that had little to do with city code.
When Keith Woodard won a bid in 2014 to build a mixed-use building on a city-owned Water Street parking lot that would house the City Market, parking, retail and residential, he had the blessings of City Council for his innovative design. Four years later, costs soared and he retooled the project, adding 28 luxury units and another floor, which required the special use permit. He also offered to build affordable housing units on Harris Street.
Of all developers in town, Woodard has the best track record on affordable housing. When he bought Dogwood Housing in 2007 from local mixed-income housing icon Eugene Williams, he promised to maintain the affordability of most of the units—and has done so.
So it was odd that Woodard would be the one to be asked to jump through higher hoops by Councilor Wes Bellamy and receive jeers from the Greek chorus in attendance as he sought approval to increase density for West2nd.
That Woodard offered to build affordable units on Harris Street instead of contributing to the Affordable Housing Fund, as most developers do, is unusual. And he said he’d exceed the city’s requirement of 16 units kept below market rate for 4.7 years. When councilors said they wanted a longer term, he said he’d make eight units affordable for 10 years.
Bellamy badgered him to up the number of affordable units. “Why couldn’t all 16 units be affordable for 20 years?” asked Bellamy.
“The project still has to be financially feasible,” explained Woodard, eliciting a big sigh from Bellamy.
Woodard pointed out that he could have put the amount required—$316,000—into the Affordable Housing Fund, “which maybe we should have stuck with that,” and that keeping eight units affordable for 10 years was already challenging at an estimated cost of $474,000.
Bellamy said he was perplexed that Woodard said it wouldn’t be financially feasible “when some would say you’ve made a lot of money in this city and because you’ve already made so much money maybe you can give some back.” That was greeted by whoops from some attendees.
And when Bellamy asked Woodard how much money he was going to make from West2nd, Deputy City Attorney Lisa Robertson advised councilors to “focus on the land use issues” for a zoning application and said that enabling legislation didn’t give council the ability to require more.
“That was a silly question,” says Eugene Williams. “[Bellamy] doesn’t have the facts and he doesn’t know how much [Woodard] had to spend.”
When councilors voted 3-2 to deny the permit, the hecklers applauded. “Those young people know nothing about investing,” says Williams. “That just bothers me to know we had three councilors who wanted to accommodate the audience more than actually trying to make this feasible for both sides.”
Bellamy, Walker and Heather Hill voted against the special use permit. ”It’s not all right to vote against it without explaining specifically what the developer needs to do,” says Williams. He opines that it would have been wiser to say what they wanted and table the vote.
Williams also criticizes Kathy Galvin and Mike Signer’s yes votes and says they seemed more concerned about downtown businesses than low-income residents.
However, Signer spent a fair amount of time during the meeting discussing whether revenue from the project could be directed exclusively to the affordable housing fund. He says he voted for the permit because it would allow the city to increase its current $3.5 million affordable housing annual budget by about 30 percent.
Others have concerns about the Monday night performance, and the word “extortion” has been bandied about.
“If I’m a developer and read those [news] accounts, a red flare has gone up,” says attorney Fred Payne, who is a plaintiff in the lawsuit against City Council for its vote to remove Confederate statues. “Why would I want to invest in this town?”
With the vote to deny the permit, “You can see the degree to which City Council is out of control,” says Payne. “I have a feeling if this were litigated, the city would probably lose.”
He adds, “I don’t think this City Council understands there are limits on what they can do.”
Part of the problem Woodard faces is that four councilors were not around when the city bid out the project in 2014. Galvin was, and at the meeting she said—after a five-minute recess to calm the interruptions from the crowd—“The demand was that the City Market be downtown on that city parking lot. It was not affordable housing.” The project has moved along “based on criteria the city gave this developer.”
Galvin also said the special use permit meets the comprehensive plan and zoning ordinance, and the project would add 80 people living on the mall and 100 jobs in the face of increasing competition to downtown businesses, as well as increase city revenue from the parking lot from $6,500 a year to $945,000 a year. “That’s huge,” she said.
For Bellamy, the message to developers is, “This council will prioritize affordable housing.” He says he appreciates Woodard’s efforts and understands that he met city requirements. “We still have discretion,” says Bellamy. “I hope we can still work together.”
Hill was more concerned about the City Market. “I’m not convinced the market will thrive there,” she said.
She says she’s not “anti development” and suggests looking at the project through a “new lens” and “recognize we ultimately may not be able to accommodate the market on this specific site if we are to meet the needs of the vendors while also competing with other community priorities.”
Woodard says he doesn’t think City Council’s vote to deny the permit was about increased density. “I think this project should be part of [affordable housing] but not all of it,” he says.
Litigation is not an option at this point, he says. “We’re looking at alternate paths to go forward.”
He says he does need a decision soon because people have reserved condos in West2nd. And he’s put $2 million into underground utilities, as well as four years of effort.
“We’re trying to work things out,” he says. “I’m trying to be positive.”
Updated 3:53pm to clarify Mike Signer’s reasons for his vote for the special use permit.
Architect Bill Atwood’s plan to land bank the top floors of Waterhouse has taken an abrupt turn toward foreclosure and auction at the courthouse January 29.
Stephen Barling
The foreclosure auction of four Waterhouse condos scheduled for Monday, January 29, was canceled, and trustees for the sale are mum about why.
Isak Howell is named as a substitute trustee on the legal notice that ran in the Daily Progress, but the phone number listed is for a Roanoke law firm that says he hasn’t worked there in a while.
Lawyer Jonathan Deem, who represents Water Street Investments LLC, the Chuck Rotgin entity that holds a $20-million credit line deed of trust and that initiated the foreclosure sale, did not return phone calls from C-VILLE.
Nor did substitute trustee David Mitchell, who works for Rotgin at Great Eastern Management and who is a defendant in a case heard in court last week brought by the only buyer of the primo, top-level condos in Waterhouse. Lauren Driscoll found her 2014 purchase was also under foreclosure.
According to her attorney, David Thomas, the would-be foreclosers sent a letter to the court January 26 postponing the sale of all the condos until February 14.
And because the lienholders said in court they didn’t need to re-advertise the sale if it took place within 30 days, should they proceed, the public may not be invited if the million-dollar condos are sold at auction.
Updated January 29
Original story
Waterhouse condos head to auction block
What started as a “friendly” $20 million loan is headed to foreclosure and an auction on the courthouse steps of four Waterhouse units because the arrangement between architect Bill Atwood and Great Eastern Management’s Chuck Rotgin has become decidedly less friendly.
The legal notice of a trustee’s sale of five condominiums that recently ran in the Daily Progress caught Atwood off guard, and he told that paper the auction would not take place. But after a court hearing today, four of the five units are still scheduled to be sold January 29 in front of the Albemarle Circuit Courthouse.
One unit—the only residential condo that sold when the top floors went on the market in 2014— got a two-week reprieve in the building that houses WorldStrides headquarters and two top floors of empty units with stunning views.
Its owner, Lauren Driscoll’s HHII LLC, bought a 1,942-square-foot unit for a little more than $1 million, and that property is part of the foreclosure sale because it was one of the units securing a deed of trust for the $20.57 million loan Great Eastern’s Water Street Investments made to Atwood’s Waterhouse LLC.
Even according to court documents, the sale was unusual because most of the purchase price was held in an escrow account for three years because Driscoll wanted to make sure the building would indeed be built out.
The purchase agreement said “the seller’s attorney shall see to the release of this property from the deed of trust.” That didn’t happen and part of the arguments in court were about whether emails and oral agreements that Water Street Investments allegedly made constitute a contract.
“It was reliance on that assurance that Ms. Driscoll went ahead with the closing October 24,” said her attorney, Ed Lowry.
Attorney John Dezio represented Atwood in the sale, and he followed up with Water Street Investments to release the lien, according to Lowry. A representative of the lender asked for changes, which Dezio made, and “WSI never in fact signed it,” said Lowry. “Is that a contract?”
Water Street Investment’s attorney Jonathan Deem argued that the person asking for the changes was an administrative assistant not authorized to release Driscoll’s condo from the deed of trust.
In December, Atwood and Driscoll amended their agreement to release the escrow funds, and according to Lowry, Rotgin had no objection to the release of funds.
However, none of those funds went to Rotgin’s entities to pay off the debt. “That’s the real reason we’re here today,” said Deem.
He said Driscoll has remedies should her condo be sold at auction, such as title insurance or a claim against whoever gave her advice on buying a condo with a deed of trust.
For Lowry, the scenario that his client could sue to find relief wasn’t a good one, especially “if Waterhouse is broke,” he said.
Judge Rick Moore said he needed time to make a decision, and Deem agreed to postpone the sale of Driscoll’s unit for two weeks.
In November, Atwood transferred five units to Rotgin’s LLC for a little more than $5 million. In 2016, he handed over six units for nearly $3.3 million. Atwood, who still owns the remaining three units on the top floor, says he owes Great Eastern $13.5 million “and change.” He says interest on the loan is $6.5 million.
Atwood was not in court, but earlier he said the decision to sell the condos on the courthouse steps “was completely wrong and damages the project. It’s a very bad business decision and hurtful and it damages me.”
Rotgin was in court, and afterward, when asked to comment, he said, “You’ve got to be kidding.”
Architect Bill Atwood says he lost “a ton” of money on Waterhouse, which has two vacant top floors. Photo by Stephen Barling
The reason prime real estate continues to sit empty on the top two floors of architect Bill Atwood’s eight-story mixed-use Water Street building is a topic of frequent speculation for downtown real estate watchers.
Were the top floor units too expensive? Is the building structurally sound? Is it the $272,000 mechanic’s lien?
No, yes and no, he tells C-VILLE Weekly. Atwood says he’s kept a low profile lately, but the garrulous architect spills the beans on the project, while wondering why there’s so much interest.
“The recession killed me,” he declares. And with nine units left, he says, “To recapture maximum value, you land bank ’em.”
More than two years ago, the condos on the top three floors with expansive views went on the market as the priciest offerings downtown at the time, with a 3,600-square-foot unit listed for $1.6 million. And then —nothing, at least to those peering up from down below.
“They were the most expensive per-square-foot units because of the debt,” Atwood says. “It wasn’t what we wanted.”
Atwood’s long and winding road in developing the former Downtown Tire site began with his purchase of it from Oliver Kuttner in 2006 for $4.5 million, and plans that included a mostly residential Waterhouse “village.” When the Board of Architectural Review nixed those plans, next up was a nine-story building with condos and underground parking.
Bad timing. The market collapsed and, along with it, his bank, Lehman Brothers.
The plans shifted in 2010 when educational travel agency WorldStrides expressed interest in moving from Pantops to downtown. “We designed it for WorldStrides because we had no bank,” says Atwood. “They became our equity.”
The city offered tax increment financing, a performance agreement similar to what it’s offered John Dewberry to finish the Landmark. For Waterhouse, after an investment of $20 million and 200 jobs, the project got a rebate on real estate taxes that Atwood says went to pay for 100 parking spaces in the Water Street Garage.
In 2011, WorldStrides moved in and now occupies around 65,000 square feet with 450 employees, says Atwood. That’s when Atwood added the eighth floor, something he’s vowed he’ll never do again.
When asked if structural problems contributed to the continued vacancies of the unfinished units, Atwood bristles. “It’s steel and concrete and it’s the best building in town. There’s nothing wrong with it. I kind of resent that question.”
Nor is the mechanic’s lien filed by Abrahamse & Company against Waterhouse LLC and HHII LLC a factor, he says. HHII principal Loren Driscoll paid more than $1 million for two units on the sixth floor in 2014.
Atwood maintains that Abrahamse did work for Driscoll and that he’s only an intermediary in that. “We did her units,” says Atwood. “She was upset about it.” He says there’s a mechanics lien on both Waterhouse and HHII, and that there’s money to pay the $272K balance in an escrow account. “She needs to release it,” he says.
Driscoll’s attorney, David Thomas, disagrees. “The suit is principally between Abrahamse and Waterhouse,” and he says there was no contract between his client and Abrahamse.
The vacant top floors continue to draw a lot of interest, says Atwood, both as business and residential units, and he sounds unsure which direction he’ll ultimately go.
He insists he envisioned Waterhouse as workforce housing. “I made a lot of mistakes,” he says. “It’s really been a struggle. I may have gone too far with the office complex.”
As for the delay in filling the building, says Atwood, “We paused. It was smart to pause.”
He also notes that he built Waterhouse around the Downtown Tire building, while across Water Street, “low historic buildings” like the Clock Shop and Escafé are slated for demolition, as well as the not-so-historic ice park. “We kept the building,” he says.
“In the end, we lost control of the cost of the building,” says Atwood. “Waterhouse is a rescue mission. We’ve got to get it out of the weeds.”
In other Water Street development news, the new home of City Market, Keith Woodard’s West2nd L-shaped complex that will house retail, office, deluxe condos and parking, was supposed to break ground this summer. “We’re looking for a way to move forward,” says Woodard, who says he’s seeking a construction company.
