City Council will hold a public hearing April 12, 2016, on local developer Tom Wack’s request for an incentive package to begin his planned mixed-use Liberty Place project in downtown Fredericksburg.
Wack, president of Wack General Contractor, asked City Council during its work session March 8, 2016. for a 45 percent reduction of Liberty Place’s real estate tax bill for the next 10 years. “Under current projections, that would allow the developer to receive about $193,000 per year for 10 years,” Assistant Director for Economic Development Bill Freehling said in his memo to City Manager Bev Cameron.
Liberty Place, a $46.3 million project in the block bordered by Douglas, Winchester, William and Amelia streets in downtown Fredericksburg, is planned to include 44 residential condominiums, 16,000 square feet of ground-level retail/office space, 30,000 square feet of office space, and 4,800 square feet of restaurant space. In addition, the three-level parking facility would include 273 parking spaces — 119 would be 24-7 public parking and another 30 would be available to the public on weeknights after 6 p.m. and all day on weekends.
“Because of higher-than-expected project costs, the developer is seeking incentives to make the project viable as currently proposed,” Freehling said. “The incentives would also allow the developer to reduce rents and thereby recruit desired businesses.”
At the March 8 work session, Wack told City Council the project could not be built until leases and sales were in place. “The incentive is necessary to finance the project, due to added costs from an additional floor of office space and the cost of underground parking,” he said.
The added costs mean higher rents for tenants. “Without these incentives, we would have to charge more on rent, and we’re pushing up against what the market can bear for rent in the city,” Wack said.
Banks require pre-sales of 50 percent on residential and 50 to 75 percent on commercial in order to finance a project, Wack said.
There are yet no tenants at Liberty Place, but “many deals are close,” Freehling said.
The city will be investing approximately $2 million for the public parking spaces at Liberty Place. “That investment should not be factored into the details of this proposal,” Freehling said. “In partnering with the developer in creating the parking facility, the city does not have to acquire land or occupy other property in the area with a parking structure. City Council wants to build a structured parking facility regardless in that area, and there are no other present sites suitable for such a facility.”
The incentive package could also allow Wack to directly negotiate with business tenants, but some members of City Council voiced opposition. “Giving this incentive to the developer does not allow the city to determine if the business meets our goals and diversifies our tax base,” Councilor Matt Kelly, At-Large member, said. “I’m not a fan of allowing a developer to do our negotiating.”
The public hearing is early on the April 12 City Council agenda. The meeting begins at 7:30 p.m. in City Council Chambers at City Hall, 715 Princess Anne St.
City Council’s regular sessions are televised live on Cox Channel 84 and Verizon Channel 42, and rebroadcast on Wednesday at noon and on Thursday and Saturday at 7:30 p.m. Live and rebroadcasted meetings are available online at Regional WebTV.
