July 11, 2013
Thursday, July 11, 2013
By MICKEY POWELL - Bulletin Staff Writer
For The Harvest Foundation, forgiving a $330,000 loan to the city to spark the redevelopment of the former Henry Hotel in uptown Martinsville was a logical move, according to Executive Director Allyson Rothrock.
“It’s an exciting time in the community,” Rothrock said, as “multiple things are going on at once” that eventually will make the central business district more vibrant. They include a new building under construction for the New College Institute, she said, plus renovations to the old courthouse.
Also, “constant, ongoing revitalization of existing buildings” is important because it spurs potential tenants’ interest in the structures, she said.
Waukeshaw Development Inc.’s planned refurbishing of the former hotel for apartments and business space could help draw occupants to other buildings uptown and will increase Martinsville’s housing stock, Rothrock said.
The more people who live uptown, the more likely the district is to attract new businesses to serve them, she added.
The city bought the four-story building at the intersection of East Church and Broad streets four years ago for $425,000, using the Harvest loan and $95,000 of its own money.
As of March, the city altogether had spent about $233,000 on the building, including the $95,000 toward the purchase price as well as funds toward the structure’s upkeep and utilities, according to City Manager Leon Towarnicki.
Those expenses, together with having to start repaying Harvest’s loan in the future, had become “such a financial burden on the city” because “the project took longer to develop than we had anticipated,” said Mayor Kim Adkins.
If the city had to repay the loan, it could not have afforded to sell the old hotel to Waukeshaw — which Martinsville City Council agreed to on Tuesday — for just $1, Adkins said. She noted that the city asked Harvest to forgive the loan, and the foundation agreed.
Waukeshaw, a Petersburg firm, intends to turn the building into a 24-unit apartment complex with four commercial/retail spaces on the ground floor.
Final paperwork has not yet been signed, and Waukeshaw must obtain financing for the project. In exchange for Waukeshaw agreeing to buy the building, the city must help the firm obtain financing, Towarnicki said.
Potential financing sources for the estimated $3.4 million redevelopment project include bank loans, state funding and city enterprise zone benefits. Examples of those benefits, Towarnicki said, include waivers of building and utility connection permit fees and some real estate taxes for five years.
Twice, the city has been denied $500,000 in state industrial revitalization funds that it had sought to refurbish the building. Officials said the denials were due to the city not having a staunch commitment from a developer.
Now that it has one, the city plans to apply for the funds again later this year.
Industrial revitalization funds basically are “needed to make this project happen,” Towarnicki said.
If the state turns down the city a third time, “something else will be needed to fill that hole” that the industrial funds would fill, he said.
Waukeshaw has spent more than $40 million on redevelopment projects in small communities statewide, according to its president, Dave McCormack.
They include, he said, the Mayton Transfer Lofts in Petersburg, a 295-unit, 95 percent occupied apartment complex developed in three former tobacco warehouses, and the Hopewell Lofts, a similar complex developed in an old school in Hopewell that has 50 apartments and is 90 percent occupied.
Although they are developers, McCormack said he and his associates are “preservationists at heart,” committed to redeveloping historic properties.
“We spent a lot of time and very thoroughly” determined that redeveloping the Henry Hotel is feasible, he said.
Furthermore, “we’ve done this (type of redevelopment project) over and over again” in economically distressed communities, McCormack said.
“I’m very confident” that financing needed for the project can be arranged, he said, adding that he hopes the redevelopment will be finished in 18 months.
Rothrock said that although she has not met McCormack and his associates in person, she has talked with them on the phone, and they impress her.
Based on their track record with other projects, she said “they are well-versed in revitalization, and they do what they say they will do.”
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