Newly trans­formed Amer­i­can To­bacco com­plex nearly ready for its first res­i­dents

Richmond Times-Dispatch - - FRONT PAGE - BY GRE­GORY J. GIL­LI­GAN

Rich­mond Times-Dis­patch

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.”

Wilkin­son

SHELBY LUM/TIMES-DIS­PATCH

The for­mer Amer­i­can To­bacco com­plex in South Rich­mond has been turned into dozens of apart­ments af­ter the first phase of a $60 mil­lion ren­o­va­tion.

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