Newly transformed American Tobacco complex nearly ready for its first residents
Developer Tom Wilkinson is nearing an initial goal of transforming the former American Tobacco Co. complex along Jefferson Davis Highway in South Richmond into hundreds of upscale apartments for workforce housing.
The first tenants should be moving into 61 apartments around Feb. 1, with 74 additional one- and twobedroom units expected to be ready later in February as part of the project’s first phase.
In all, plans for the $60 million Port City development call for turning the former 300,000-square-foot tobacco manufacturing plant’s four interconnected brick buildings and 11 former tobacco storage sheds into 291 apartments plus 30 artist studios.
Construction on the second phase — about 155 apartments and 23 artist studios in 10 of the former one-story metal warehouses — should start soon and be completed in mid-2020. A ribbon-cutting on the first phase was held Friday afternoon.
But there’s a different twist — all of the apartments will be workforce housing, meaning the overall income averages of the residents can’t be more than 60 percent of the median salary in the area, or roughly $50,000 for a family of four or about $34,980 for a one-person household.
Rents will be on a sliding scale depending upon income, ranging from $624 a month for a one-bedroom for someone making 40 percent of the region’s median salary to $936 for a tenant earning 60 percent of the median salary. The rents include water, sewer, electricity, internet and basic cable costs.
“This is a transition area from what is there now to what can be in that area in the future,” said Wilkinson, the principal with Richmond-based Maramjen Investments LLC.
“People already live in the area and they want to continue to live in the area, but they want to live in a nicer place and this project will help transition that area [of South Richmond] to a nicer place over a period of time,” said Wilkinson.
The Port City complex is at 800 Jefferson Davis Highway, sandwiched between a Richmond public utilities office and the old Model Tobacco building.
“The buildings were filled with graffiti. The roofs were falling in, and the beams were falling down. It was not a safe place to be,” Wilkinson said.
“When you do what I do and see what it could be and not what it is,” he said. “We have spent a whole bunch of money to fix them up. And I think we have done a nice job at fixing them up.”
The Port City project was financed using $34 million in historic tax credits and low-income housing tax credits and $26 million in debt with the Richmond Redevelopment and Housing Authority issuing tax-exempt revenue bonds.
Orlando C. Artze, the interim CEO at the RRHA, said the development is important because it allows lower-income families to afford upscale-type apartments without paying market rates.
“These are working families. They don’t have the income to be able to pay market rates,” Artze said. “There isn’t a difference between this type of housing and what folks would find in a marketrate housing. The families living there are not getting any subsidies. They will pay the rent, but the rent is lower because the debt on the project was lower as a result of the tax credit.”
Wilkinson said the tax credits and the tax-exempt financing were key to the project. Fourteen leases have been signed so far, he said, with minimal marketing efforts.
“There are three phases for a developer. The first is raising the money. The second phase you build it, but much of the stress is on the contractor. The third phase is renting it and leasing it out. That is most stressful phase. You hope you have made the right analysis,” Wilkinson said. “We’re getting ready to start the most stressful part. We have so many people who have said they want to live there.”
The one-bedroom units average 971 square feet, and the two-bedroom units average 1,344 square feet. The project has just one three-bedroom unit, at 1,723 square feet. About half of the units in the first phase and about 80 percent in the second phase are one-bedroom units.
While incomes of all the residents can’t be more than 60 percent of the region’s median salary, Port City will be able to have tenants who make more than that as long as the overall income averages work out to 60 percent of the area’s median income. Congress made the improvement to the affordable housing program last year by including “income averaging.”
The project, for instance, could have a tenant or two making 70 or 80 percent of the region’s median income as long as the development has low-income residents to make it average out to 60 percent.
“It allows for a broader range of incomes in a particular property,” Artze said.
And those making more money also would pay more in rent. For instance, a tenant earning 80 percent of the median income would pay $1,249 for a one-bedroom apartment and $1,498 for a two-bedroom.
The apartments have tall ceilings, big windows, restored original hardwood and concrete flooring, and kitchens with granite countertops and stainless-steel appliances. A fitness center and community room, with pool tables and shuffleboard tables, should be ready in about a month or so. Plans call for a swimming pool in the second phase.
Solar panels were added to the top of some of the former tobacco storage sheds to help provide electricity to the development. Wilkinson said he spent about $1 million on the solar panels, making it one of the largest residential solar projects in the region.
Genesis Properties is handling leasing. KBS is the generator contractor. Walter Parks Architects handled the design.
About four years ago, Wilkinson said he heard the vacant American Tobacco complex was up for sale. He drove by, took a look at it and decided the buildings were ripe for redevelopment. He bought the buildings in September 2016. Construction on the project started in July 2017.
“And now a year and a half later, we have the first units available for occupancy,” Wilkinson said. “This is a milestone.”
The former American Tobacco complex in South Richmond has been turned into dozens of apartments after the first phase of a $60 million renovation.