The Fredericksburg Economic Development Authority (EDA) voted to fund City Council’s economic incentive of $300,000 for NBB, LLCs, mixed use development of the National Bank Building property.
The incentive is part of a pending settlement offer from NBB, LLC, a division of local developer Mike Adams’ JON Properties, for pending lawsuits related to the building of townhouses on George Street, adjacent to the former National Bank Building.
The city would reimburse the EDA from the real estate tax increment generated by the mixed use development, at three percent interest.
For his part, Adams has offered a redesign of the proposed townhomes:
– Reducing the number of units from seven to five.
– Reducing the height of the units by five inches, to 44 feet, four inches.
– Removing one of the stories of the units.
– Lowering the cornice.
– Providing a front yard on George Street, and a side yard on Charles Street.
City Council is scheduled to vote on the agreement at its September 13 meeting.
Bill Freehling, interim director of the Fredericksburg Department of Economic Development, presenting the proposed agreement to the EDA, said NBB has made significant investment into the property. “NBB paid $1.6 million for the property, then another $1.2 million for improvements to the National Bank Building,” he said.
The restaurant FoodE opened in the first floor of the former National Bank Building in August, and Adams plans to move his JON Properties offices to the second floor in October.
The EDA’s financing will enable the city to pay NBB, with $150,000 due upon completion of the rehabilitation of the National Bank Building and the issuance of certificates of occupancy for the first two townhomes. The second $150,000 would be due upon completion of the rest of the project.
The city will reimburse the EDA at three percent interest on the outstanding balance. “It will ultimately be based on the actual incremental real estate value over however long it takes to get to $300,000,” Freehling said. He estimated the EDA would receive about $33,000 in interest over a seven-year period, but said it could be longer or shorter before the EDA was paid-back in full.
EDA member Bill Beck wanted the interest rate reduced to two percent, and even suggested no interest.
“There are opportunity costs for having that money tied up, so we want interest and three percent is good,” EDA Chairperson Amy LaMarca said.
Freehling said it’s the same rate used for the Riverfront Park loan three years ago.
EDA member Chris Muldrow said he’d prefer to take the politics of the project out of the equation, and vote on the financial viability of the loan. “The interest rate is below what you’d pay a bank, so it’s a good deal and still gives the EDA money for locking up their money.”
All members voted to approve the measure, except LaMarca, who abstained. When asked by EDA members why she was abstaining, she said there was no requirement for saying why, and would not say.
The Architectural Review Board (ARB) approved Adams’ plan to build seven, four-story townhouses, but City Council voted 6 – 1 in November 2015, to suspend the ARB’s approval.
Adams’ company sued City Council in November, seeking to void their action.
City Council then filed a lawsuit against NBB, asking the court to dismiss the lawsuit. City Council also filed a lawsuit against the ARB, claiming citizens were not properly notified of the public hearing.
If the settlement agreement is approved by City Council on Tuesday night, a public hearing will be scheduled for September 27.
More
City Council to Vote on NBB Townhome Settlement
FoodE Opens in Historic Bank Building
Future of National Bank Building May Head to Trial
Developer Sues City Council Over Proposed Townhomes
City Council Overrules ARB’s Approval of Bank Property Townhomes
Preservation Group Opposes Plans for National Bank Building Property
Downtown Fredericksburg’s Historic National Bank Building Sold
Historic National Bank Building For Sale
Historic Bank Closes its Doors in Downtown Fredericksburg
