Albemarle County will give an additional $2.5 million toward increased road costs in the first phase of the long-planned mixed-use redevelopment of the former Barnes Lumber site in Crozet.
The Board of Supervisors in 2019 approved a public-private partnership with Crozet New Town Associates to give $3.2 million in county money toward the project, which will include commercial and retail space, a hotel and approximately 52 residential units in its first phase.
Ultimately the county will own the plaza portion of the property.
On Wednesday, the board approved an addendum to that agreement to include the additional money to cover increased costs for the main road network in the project.
“The original estimate for this project was developed a number of years ago,” said Lance Stewart, the county’s director of facilities and environment services. “We all are aware of the inflation that’s occurred since, naturally.”
Stewart said that, since the pandemic, inflation has been particularly tough.
“Especially in the last few years, it’s accelerated pretty dramatically for the country for pretty much all goods and services but for the construction industry in particular,” he said.
To extend the road from Crozet Square to Hilltop Street is now estimated to cost $7.88 million. That includes unanticipated utility relocation expenses.
The Virginia Department of Transportation is giving approximately $2.3 million to the project through its revenue sharing program. Crozet New Town Associates and developer Frank Stoner are contributing the $2 million local match.
Albemarle’s new $2.5 million contribution would come from $1 million in American Rescue Plan Act money and $1.5 million from the county’s economic development investment pool.
Any additional road-related costs would be paid for by the developer or possibly VDOT, county staff said. Deputy County Executive Doug Walker said county staff will be pursuing any opportunity to have VDOT put up a proportionate share of the increased cost.
“We don’t know the outcome — I can’t promise that — but I can promise you that we will pursue it as hard as we can to see if we can then minimize the use of county money, if in fact there is state VDOT money available,” he said.
Stewart said Stoner has agreed to cap the right-of-way costs at $200,000. The rights of way are valued at approximately $500,000.
“As relates to the plaza, which is separate from the road construction, he has offered to construct public restrooms immediately adjacent to that at his cost,” Stewart said. “That, I think, is going to be a really necessary amenity and important to the plaza itself and its successful operation.”
Stoner has also agreed to contribute $50,000 to help hire an executive director for the Downtown Crozet Initiative, a nonprofit that has been involved in the planning of the plaza. The organization, or another nonprofit organization, will be responsible for the plaza’s management.
Stewart said there will be a management agreement between the county and the initiative, which is being worked on now. The Board of Supervisors will have input on the agreement and ultimate approval.
The county, through the Economic Development Authority, will still provide $1.6 million in cash for construction of the plaza and approximately $1.6 million in tax rebates through Synthetic Tax Increment Financing, which was agreed to in 2019. No money has been given yet.
Synthetic Tax Increment Financing is a financing scheme in which the developer pays all county taxes and then the county pays the developer the incremental increase in property taxes paid. The developer then uses that money to pay for the debt service of their construction loan, which in this case is $1.6 million.
Walker said an independent third party analysis about the county’s return on investment showed that Albemarle’s total investment of $5.7 million will be recovered in future tax revenue within eight to nine years.
“The project is estimated to generate $21.1 million in net new tax revenue, that is revenue over and above that $5.7 million investment, over a 15 year period,” he said.
Supervisor Diantha McKeel said the project continues “a history of the supervisors and staff supporting the Crozet community with infrastructure through Albemarle County dollars.”
“We hear sometimes from folks in Crozet that we don’t support them,” she said. “This is another investment in Crozet, which we’re supporting, and I just think somebody has to say that.”
Future phases of the redevelopment project are projected to include approximately 152,550 square feet of office space or retail space and 150 more homes.
Supervisor Ned Gallaway asked that the county encourage more office than retail space in future phases.
“This is a prime place to put some retail in, but the real high bar expectation would be to allow this to bring in businesses that can set up shop, provide places where people can live nearby walk to work, that sort of thing,” he said.
Source: www.dailyprogress.com
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