The Cold Storage Project

September 9, 2011 By Leave a Comment

Answer:  ”About 700 apartments.”

Question:  What is happening at the corner of 17th and E Broad?

The Southland Wine Company Loft leased in under 4 months and are just one of many option in the new development node within walking distance to the MCV Campus

The Richmond Cold Storage complex is a series of warehouses that produced ice (thus the name) as well as a few other warehouses and vacant lots that have been either converted to apartments (via Historic Tax Credits) or have become “ground-up” urban infill.  When all said and done, the apartment count in within a 2 block radius of the corner will be somewhere between 700 and 800.  When you include the project being developed on the entire block at Main and 21st, the count comes closer to 1,000.

That is substantial development in a relatively small area in a very compressed time frame and the good news is that they are leasing well for prices that can only be described at as pleasing to the developers that built them.

This new node of development in the northern end of  ”The Bottom” is an excellent trend for an area that has always struggled to sustain commercial/retail momentum.  By targeting the “all inclusive” model at the Medical crowd and within walking distance to the Medical complex, the apartments seem to be creating their own momentum.  The apartments are shifting population trends into eastern sections of the City and adding living options that did not exist in the area prior to just  few years ago.

Cold Storage, Cedar Broad, Southland Wine Company and Raven’s Place are all part of the overall development area that will impact the City for decades to come.

Filed Under: Apartments, Downtown, Student Housing Tagged With: , , ,

The Case for Re-visiting MLS Zones

September 6, 2011 By Leave a Comment

The only constant in this world is change. Tomorrow will be different from today…today from yesterday….you get the picture.

What lags behind, in many cases, is the methods we use to measure, describe and predict. There is a little changing we need to do as Realtors in Richmond.

For many years, the zones of Richmond have remained stagnant. Zone 10, which is the primary zone that contains the Downtown Richmond neighborhoods (other than Manchester) plus The Fan and Museum Districts always served us pretty well. However, it is really no longer reflective of how we search, either as agents or as the buying public. It is hampering growth and we need to change it.

10, 50 and 60 really don't reflect traffic, development or search patterns for Downtown

Manchester is technically small parts of both zones 50 and 60. It is bounded by the city limits to the south of the river and is split by Hull Street. It is unfortunate as it is lumped in with areas that do not truly share its history, style or momentum. It is also truly holding back its growth.  It is also one of the ONLY cases in the MLS where a neighborhood is truly split by a line from MLS.

As Richmond grows, our MLS needs to grow with it. I feel strongly that the Manchester area should be incorporated into Zone 10 as part of what is considered to be “Downtown” (or have 50 and 60 merged in Manchester.) The traffic patterns, development paths and physical proximity make it more “10″ than “50″ or “60.” Furthermore, having Hull Street serve as a dividing line couldn’t be any less reflective of the reality of Manchester.  The way it is right now is wrong on every level.

When Manchester was industrial, it did not matter.

As a Realtor, I want our MLS to be as accurate as possible.

As a Richmonder, I want true market forces to dictate successes or failures and not financing or outdated lines.

Right now, nothing about MLS and Manchester is correct and we need to get it right.

Filed Under: Downtown, MLS Tagged With: , ,

The Case for Tax Abatement

September 4, 2011 By Leave a Comment

The Manchester Pie Factory used both Historic Credits and Tax Abatement to reduce both development cost and ongoing ownership expense

The tax abatement program that was put into place in the City of Richmond in the 1990′s has been another lesson in incentivized urban renewal that has, for the most part, worked quite well.

The abatement program effectively says that improvements made to qualified properties are not taxed for a period of time…usually anywhere from 10-15 years…depending on the property type and use as well as when the property renovation was completed and put into the program.

While there are other facets to the program that govern how the abatement is actually computed, it is best understood as a program that reduces the taxable value of a property by the value of the improvements made.  In other words, the net effect is that the City continues to tax the property as if it has not been improved.  This credit is attached to the property and not the individual who completed the improvement so that if a property is sold prior to the expiration of the abatement, the remaining abatement passes to the new owner.

As an example, if a property was worth $500,000 prior to being improved and worth $800,000 after the renovation or addition, the City would issue an abatement credit of $300,000 making the net taxable real estate amount $500,000.  At the city tax rate of 1.2% and figuring a 10-year abatement, the value of the abatement in actual savings would be $60,000.

That is pretty powerful.

The overall goal is to create a situation where someone is not ‘dis-incentivized’ to improve their property.  By creating lower costs of ownership for residents from a real estate perspective, additional revenues can be generated in sales and meal taxes and higher values of real estate in the aggregate.  This abatement program is especially effective in creating scenarios where vacant buildings were brought to life and are now filled with multiple tenants or owners all eating out, buying groceries and other items and increasing the vibrancy of the revitalized areas.

The Abatement program works hand in hand with the Historic Tax Credit Programs to increase the likelihood that abandoned structures are renovated.

One criticism of the abatement program is that it is only applicable to existing structures and not vacant land.  Between HTC’s and Abatement, the overall cost of new construction compared to heavily incentivized renovation of old structures is arguably prohibitive.  There has been some talk of an abatement program for new construction, but as of now, only existing structures qualify.

Filed Under: Downtown, Financing, Real Estate Taxes Tagged With: , ,

Condo Finance — Let’s Play Fair

September 4, 2011 By Leave a Comment

Here is an article I wrote a while back talking about how the current state of condo finance was really hurting urban housing.  It is still a huge issue and until it is addressed, we really are influencing decision making about housing in a negative way.  It also got me an audience with Eric Cantor (well sort of, see the RTD article here….)

Sitting in Traffic with Fannie and Freddie

As development and housing reel from the lack of credit available right now, the fallout is all around us. We know about foreclosure. We know about short sales. We know about property values re-adjusting severely and people being trapped in their homes. This is a problem, for sure, but it can and will be solved by a balancing of supply and demand. It is already getting better….marginally….but better.

Where we go from here is the issue that is more important. The new world of lending is pretty much DIRECTLY AT ODDS with the things that will set us free from the larger mess we are in.

Do tell…..

IF we are trying to be greener AND we are trying to reduce out dependence on foreign oil AND we are trying to reduce our carbon footprints AND we are trying to retool out transportation systems THEN WHY ARE WE PUNISHING URBAN DEVELOPMENT?

There is no way to build with any density other than to build vertically. Period.

Take, for example, any multi-family building of 3-5 stories (or any height, for that matter) built in any urban area. The building can be an apartment building with no problem. But if there is to ownership, we got a problem.

The only way that any vertical structure can have individual ownership is condominium ownership. There is no other way (and do not say co-op, it is even more convoluted.)

Right now, there condominium lending environment is ridiculous. The requirements put onto condo lending call for unrealistic “pre-sold” requirements, interest rate add-ons, lower loan-to-values, a maximum number of investor owned units AND condominium dues are counted against qualifying ratios. Bottom line, is you need to make more money, have more cash to put down and only purchase in condo projects that have a large portion of units already sold.

I could MAYBE stomach these requirements if the same set of rules were applied to single family housing, but they are not. There is not a pre-sold requirement in any single family neighborhood. There is not a check of investor owned homes in any single family neighborhood. There is not an “add-on” to the interest rate and the maximum loan to value is 5% greater than condominiums.

This is the kicker…condo dues typically contain some utility costs and a repair reserve in the budget. This is not accounted for in single family loan underwriting.

It is akin to saying that single family homes do not require repairs and the owners have the option of using or not using water and sewer.

It is not fair. And it is just plain wrong.

If someone chooses to live in their downtown OR wishes to have a space that does not have a yard to maintain, then they should be able to choose to live in that environment without penalty. The current rules say otherwise.

Fannie Mae and Freddy Mac have spoken and they would prefer you live in the suburbs.

See you in traffic.

Article Source: http://EzineArticles.com/3519249

Filed Under: Condos, Downtown, Financing, Market Values Tagged With: , ,