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Public-private partnership approved for office space near Southwood

An area developer likely will get $100,000 from Albemarle County for office space in a proposed mixed-use development in the area where Fifth Street Extended becomes Old Lynchburg Road.

The county Board of Supervisors at its Wednesday meeting over video conference approved an agreement for a public-private partnership with the developer of a proposed project, Albemarle Business Campus, that will take the place of some of the residential units originally proposed for site.

The agreement is contingent upon a proposed rezoning for the project receiving approval from the board.

As part of the agreement, the developer would reserve 25,000 square feet of Class A office space for a primary business, which, according to the staff report, is a business that generates more than 50% of its revenues from outside of the region. Developer Kyle Redinger with 5th Street Forest LLC would receive $100,000 from the Albemarle Economic Development Authority through synthetic tax increment financing.

Roger Johnson, the county’s economic development director, said county staff would like to grow the county’s commercial tax base and create space for future business growth.

“Currently, our vacancy rate in Albemarle County for Class A office space is 1%, and, just as a general rule, that’s unhealthy,” he said. “It means we have no room for expansion for existing businesses, new businesses or really any opportunity for growth in that particular area.”

J.T. Newberry, the county’s economic development coordinator, said he and Johnson estimated it would cost the county at least $7 million, even before land costs, to develop similar office space.

“So we feel really positive about the value of the partnership that we’re entering into,” he said.

Originally, a proposal on the site was called Royal Fern and had a maximum of 300 residential units and a maximum of 125,000 square feet of non-residential space, which the county Planning Commission recommended denial of in October.

During a Planning Commission work session in February, Redinger presented a proposal for the Albemarle Business Campus, with a maximum of 128 residential units and a maximum of 225,000 square feet of non-residential use.

An updated rezoning proposal for the business campus was submitted in March, which now includes a maximum of 150 residential units and a maximum of 396,000 square feet of non-residential use. This proposal has not yet had public hearings before the Planning Commission or Board of Supervisors.

Ahead of Wednesday’s board meeting, some officials questioned approving an agreement ahead of the pending rezoning request. Deputy County Executive Doug Walker said the process was consistent with other previous agreements.

“It’s been our position, with board support, that that is the proper order of things, recognizing that the agreement, if it’s approved by the board, does not bind the board and actually is contingent upon the future decision to approve the rezoning,” Walker said.

Two prior agreements, one for funding Habitat for Humanity of Greater Charlottesville’s redevelopment of Southwood Mobile Home Park, and another that would give Crozet New Town Associates LLC funding toward the Crozet Plaza, were approved by the board before the Planning Commission held its public hearings. Both projects received recommended approval from commissioners, but there were still concerns with both.

“I can’t imagine any planning commissioner we currently have on that board has any lack of confidence to push back against anything, that they can just do the land piece, that it’s under their purview, and I can’t imagine that they’d be influenced,” board Chairman Ned Gallaway said.

Redinger said that with the partnership, his team and the county’s economic development office will be able to market it as an Opportunity Zone office space that’s ready to build and able to add upgraded amenities that wouldn’t have been offered in the typical rezoning.

Opportunity zones provide development tax benefits as part of the 2017 Tax Cuts and Jobs Act, and taxpayers may defer taxes on eligible capital gains by investing in a qualified opportunity fund that supports development in a zone.

According to the agreement, Redinger also will have to provide an enhanced bus shelter and bike racks, multi-use paths, trails and sidewalks in excess of county code requirements, space for for-hire, hailed transport services and a dog park.

“I think this project is very complimentary to what’s happening on Fifth Street,” he said. “It’s symbiotic with Southwood’s community business orientation, either from providing job opportunities for those residents, or complimentary services to what they’re willing to offer over there.”

Supervisor Liz Palmer asked if there were still plans to have a self-storage facility on the site. Redinger said it is still part of the plan, but would have flex space in front of it that would be more affordable for startups or small businesses.

“It provides a lot of flexibility for businesses not only to take advantage of the Opportunity Zone, but to grow into necessary inventory storage,” he said.

Public hearings

The board also held three public hearings Wednesday evening, including one to approve an ordinance to ensure continuity of government during the pandemic.

The board approved an emergency version of the ordinance in March, and the updated ordinance made some changes. The ordinance will expire “not later than six months after the COVID-19 disaster ends,” and it will be deemed to be ended when the Board of Supervisors adopts a resolution ending the declared local emergency.

Travis Pietila with the Southern Environmental Law Center said he was glad to see the ordinance allows the county to postpone non-emergency public hearing and action items.

“There are certain situations, including some major rezonings and special-use permits, that will have a significant effect on the lives of our residents and for many long after this emergency is over,” he said. “In these cases, the ability to address your local representatives in person face to face and with your fellow citizens and attendance is often crucial.”

Neil Williamson, president of the Free Enterprise Forum, said he thinks the idea that some applications are appropriate for virtual review and others are not is “problematic.”

“All applications and all applicants are created equal,” he said.

Supervisors also approved an amendment to a special-use permit for the Tandem Friends School property to allow for an approximately 4,500-square-foot pavilion to be constructed.

A proposed Sleep Number mattress store along U.S. 29 also received approval from the board.

The 1.5-story store would be on the front half of an undeveloped almost one-acre parcel south of the entrance to Fashion Square mall. That land is currently zoned Planned Development Shopping Center, and an approved application plan is required for that specific zoning.

The Planning Commission had recommended approval of both the permit and the application plan in February.


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