Hotel project funds sought

February 15, 2012

By MICKEY POWELL - Bulletin Staff Writer

The Phoenix Community Development Corp. needs to secure about $4.2 million before the redevelopment of the former Henry Hotel in uptown Martinsville can start, according to Executive Director Ray Gibbs.

That is about how much the project is expected to cost, he told Martinsville City Council on Tuesday.

Due to the size of the project, multiple funding sources will be needed, said Gibbs. Phoenix can get a bank loan for about $1.5 million, but the other $2.7 million must be financed to be able to get the loan, he said.

He mostly blamed economic conditions for Phoenix’s inability so far to get the project financed.

“Am I absolutely certain (that all of the needed financing can be arranged)? No,” Gibbs said.

However, “I think we will get it” as economic conditions improve, he said.

Phoenix is a nonprofit developer launched in 2009 to work with the public and private sectors on revitalization efforts in the city and Henry County.

Its first major project has been the former hotel building at the corner of East Church and Broad streets. Three years ago, the council bought the four-story building for $520,000 — including a $425,000 loan from The Harvest Foundation — with plans to have the structure renovated.

After addressing the council, Gibbs said another reason why Phoenix has had trouble financing the project is the city not contributing any money toward it. Usually, local governments contribute a large sum of money — say, $1 million — before embarking on such projects, he said.

He said, though, he recognizes that “the city has not been in the position” financially to contribute any funds.

It will take at least 8-12 months to arrange financing and start the project, Gibbs estimated. In the meantime, he added, Phoenix will proceed in getting design plans developed so when funds are found, the project can move forward quickly.

“I’ve seen these types of projects take seven or eight years” to complete, Gibbs said after his presentation to the council. To get them done in just a year or two is “very rare,” he said.

Councilman Mark Stroud asked Gibbs if he had talked to merchants about improvements they would like to see to buildings in the central business district. He said he knows they would like to share ideas with Gibbs.

Gibbs replied that he has talked with merchants but it has been “not as much as I’m sure you’d like for me to” due to other job commitments.

He said Phoenix has gotten involved in efforts to redevelop two other local properties. He would not identify the buildings or their locations yet.

A tenant has been identified for one building, Gibbs said, but “we have to see if we can get the building renovated for what the tenant wants to pay.”

The other building is to be used by a nonprofit organization, he said.

Also Tuesday, council members learned that the Martinsville-Henry County Economic Development Corp. (EDC) is involved in 17 active projects and 12 inquiry projects.

An inquiry project is one in which a company has shown interest in the area but has not yet sent executives to visit. An active project is one in which a company already has visited, said EDC President and CEO Mark Heath.

Among the EDC’s activities in January, he said, were:

• Hosting a meeting between the Martinsville Speedway and the Virginia Home Inn in Fieldale.

As a result of the meeting, Heath said, the inn has been chosen as the VIP lodging partner for the speedway and all of its rooms have been booked for the spring and fall NASCAR races.

The speedway’s presence spurs many people’s interest in visiting the area, he said.

“We could not buy the coverage (publicity) that the speedway gives us” during nationally televised races, Heath said. “I’s a very important part” of EDC marketing efforts.

• Updating a “welcome” billboard near Riverside Tire with an image of the Bassett Historical Center.

According to Heath, the center’s manager, Pat Ross, has said she is pleased with the sign and it has resulted in the center receiving new visitors.

• Continuing to work on the Martinsville-Henry County Textile Heritage Trail being developed in Fieldale.

• Sending out 730 brochures about the community to area businesses and people who are interested in visiting.


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