Southside’s iconic Model Tobacco property as reported by Richmond BizSense is under contract to C.A. Harrison Cos, a Maryland development firm. The property has gone through development fits and starts through various economic cycles, but has failed to gain traction over the last 20+ years.
The project would be absolutely incredible for South Richmond, but is no small undertaking. I have personally toured and studied the property at great length. The development presents massive challenges however, and the project is not for the feint of heart. Here are a list of some of those issues:
- With a sprawling set of 7 different buildings, and the massive square footage of the endeavor, the sheer size of the development is daunting. The project easily surpasses $100 Million to develop it in its entirety. The developer and its investors must have very deep pockets, and be in for the long haul. The project will likely take a decade to fully develop.
- Given the large dimensions of the buildings, window access for adaptive reuse as apartments is highly challenged. Many of the units will need to be 3 Bedroom apartments in order to provide at least one window in each unit (not necessarily each room). 3 Bedroom units are very difficult to rent at market rates, but less challenged for low-income/affordable units. Nonetheless, the project will require a very large number of 3 Bedroom units no matter the rent type.
- The current Zoning/Special Use Permit for the project is very specific to a set of adaptive reuse apartment plans which failed to proceed. Any changes to the the number of units, the mix of low income vs. market rate units, landscaping, etc requires city approval. This will cause lengthy delays to resolve before anything can proceed.
- The buildings have not been listed on the list of historic buildings and therefore is not eligible for historic tax credits. While this building complex should easily qualify, this is something that will need to be resolved. Economically speaking, there is no way to viably develop the project without tax credits given the enormous expense associated with repurposing the buildings.
- The economically depressed condition of the Jefferson Davis corridor does not help the situation. Add the huge American Tobacco project next door which will also be low income housing, and you have an enormous concentration of 750+ low income units concentrated in one specific area.
On the flip side, things are finally moving again for South Richmond. Investment in the area that was occurring before the Great Recession but came to a screeching halt, has begun again in earnest. The iconic Model Tobacco building could be an enormous opportunity to achieve sizable low income/affordable housing not only for the area, but the entire city.
Let’s hope that this time the new developer is able to see it through to completion. It would be a huge benefit to the area to see this awesome building restored and put back to good use. Fingers crossed…