The field where Fort Eustis Boulevard bends toward Old York-Hampton Highway, like the lot at the corner of Fort Eustis and Route 17 or the close-cropped grass on either side of Keener Way’s T-junction a few miles away in York County, stands as proof of the problem York County faces.© Dave Ress This field in York County has been meant to anchor a mixed-use development with stores and offices for a decade.
As do many other places around Hampton Roads.
The land was set aside for shops and offices meant to anchor high-end, walkable neighborhoods.
All three have sat empty for about a decade.
Also empty, though for not as long, is the shuttered J.C. Penney building in the big box store development at the Marquis Parkway, a development originally intended to be the same kind of “new urbanism” project that’s been in vogue with suburban planners and developers since the early 1990s.
The challenge, county officials say, is a long-term trend of limited interest in high-end commercial development in the suburbs — a sluggish market that has grown even slower during the pandemic.
The K-Mart at Waller Mill Road has been empty since 2019; the old Kroger at the Village Square center on Victory Boulevard is now a church, which unlike the store, is exempt from property taxes — in effect, a more than $40,000 hit to county real estate tax collections, plus the thousands more that came from the county’s share of sales taxes. Kroger moved into some of the space of the shuttered K-Mart in the center.
York County, Hampton Roads’ quintessential bedroom community, has hoped for more than a decade that mixed-use development — projects that included both commercial and residential buildings in close proximity — would promise the kind of life-style that would attract people.
County officials also hoped mixed use and higher-end commercial development would generate a more sustainable balance between tax collections and spending on public services. Generally speaking, offices, stores and industrial property owners pay more taxes per acre than home-owners or apartment landlords, while requiring fewer services from a county or city.
“Perhaps one of the most existential threats to the county’s revenue base is the relationship between land use and local taxes. The ·pandemic has accelerated the decline of ‘bricks and mortar; retail and increasingly the office market sector,” York County Administrator Neil Morgan wrote in a recent memo to the county’s Board of Supervisors,
“Looking into the future, there seems to be little demand for new retail or office·space. Beyond the revenue implications, it is not clear what alternative demand might emerge for these large blocks of space and how they will fit into a balanced land use fabric,” he added.
There’s still plenty of demand for homes and apartments.
Donald Davis, a principal in the Commonwealth Green project off Victory Boulevard, said all of the 384 apartments planned for that project have been rented. Almost all of the 56 duplex townhouses that have been built, out of a planned total of 94, have been sold.
But when he asked last year for the county to eliminate its requirement that he build a commercial building within two years of getting a certificate of occupancy for the last townhouse, he said he had had only had one serious prospect for the commercial sites in five years.
The county granted his request to reduce the amount of commercial space in the project by more than one-eighth, to 35,460 square feet. He said he now has a contract for one commercial site, but at half the price he had hoped for.
But he said he is having no luck marketing buildings with commercial space on the ground level with 16 “live above” apartments upstairs.
“They just aren’t moving,” he said.
Those “live above” apartments — the idea is that business owners would like to simply walk downstairs to work, and so recreate a rapidly-vanishing kind of city street-scape — are one of the ways developers of mixed-use projects try to bring a city feel to the suburbs.
On the stretch of Fort Eustis Boulevard between Route 17 and Old York-Hampton Highway, the developers of Yorktown Crescent planned a mix of specialty retail and professional offices when they won county approval of their mixed-use development. They expected to build at least 28,000 square feet of commercial space but were aiming for 38,000 square feet, as well as 17,000 square feet of office space.
There’d be stores along Fort Eustis Boulevard, with offices at traffic roundabout, along with “landscaped plazas, well defined pedestrian walkways, and appropriately scaled facades,” 58 duplexes and and townhouses, 80 condominium apartments, 64 apartments, eight “live above” units and a 3,000 square foot community hall.
But a decade after York’s Board of Supervisors approved the project, developer Woody Parrish and his builders are just finishing up work on the 28th townhouse — and he’s stuck there because his agreement with the county requires him to build 9,000 square feet of commercial space before continuing to build residential units.
“I’ve got 36 condo lots, well, you can’t really say lots for a condo, but I have 36 with people interested and I can’t do anything until I’ve got that 9,000 feet of commercial,” he said.
“I understand all about what the county needs, and why they want to build commercial first,” Parrish said.
But, he added, “I’ve been doing this since 1987 ... and the first thing any commercial guy does is, he draws a ring and he counts rooftops inside that ring.”
Parrish still believes the area around Fort Eustis Boulevard and Route 17 will become a major business center.
Still, on the other side of the highway, Triple Feature Associates has been trying for years to interest a store or services company in a 2-acre lot.
The lot is part of the larger Yorktown Arch project, a 92-unti multi-family development on an adjacent 9-acre site.
The county rezoned both the 2 acre and 9 acre sites as a planned development in 2012, creating a block essentially similar to a more formally defined mixed use project
The rezoning was subject to a condition that commercial or office space on the 2 acre site total a minimum of 15,000 square feet as well as specific design requirements. That’s larger than the 11,000 square feet of commercial space that the guidelines for a formally-defined mixed use project would set for a project involving that many residential units.
But a building with that much space on a site that small is a tough sell, the developer told the county. It suggested subdividing the lot into two or three parcels ranking between half an acre and an acre and said the design requirements needed to be relaxed in order to attract retailers that have their own corporate branding and design specifications.
‘We are confident that once these things are removed we will be able to find a buyer or buyers to acquire and develop the remaining Triple Features Property or Properties,” Mike Mausteller, a partner in the project, told the county planning commission.
Across the county line in Poquoson, CBC Rentals is seeking permission to convert office spaces at 538 Wythe Creek Road to residential units.
“We have actively marketed commercial space for rent but have been unable to find tenants. Our last tenant, Light brown Hair Salon, vacated in 2018,″ CBC principal Roger McLennon told the city.
The city planning commission did not like the idea of adding more housing to an area zoned for business, although there are already two single family homes and one 4-unit apartment building in the area. Poquoson’s city council is still studying the idea.
York’s first mixed-use hopes came in 2007 with a project on the Marquis Center Parkway extension of Route 199, which was to include a hotel, office buildings, stores, restaurants and entertainment venues clustered around a plaza, a central street and two street connections to a parkway to new clusters of closely-packed, single family houses.
It was to be financed with the increased tax revenue the county and developer expected would come as empty land became high-priced real estate.
But the Great Recession hit, and the developer convinced the county to let it build big box stores instead of the mini-city it first proposed, in order to cut costs.
That developer ended up filing for bankruptcy, with the new developer, the Dallas-based Todd Interests, founded by investor Shawn Todd and focused on what it describes as “real estate anomalies”, acquiring development rights to the site.
Since then, five big box stores have gone up, though the J.C. Penney building was shuttered in 2015. A planned mixed use phase for the southern part of the site was shelved in favor of residential development, as Todd decided, and the county agreed, that further commercial development seemed unfeasible, county records show.
The county also agreed to extend the period when the additional tax revenues that came with development would go to repay the bonds that financed the project, a commitment that now extends to 2041.
The original idea was that the bonds would be repaid and York would then get the additional tax revenue after just a decade.
Financial reports filed with the Municipal Securities Rulemaking Board show the project is collecting $1 million a year in those additional taxes.
With that sum and the $732,119 in a reserve fund for debt service as of June 30 2020, the project paid the $1.2 million due to bondholders during its financial year ended June 30 2021.
It has since made a $614,400 interest payment due on September 1, York County economic development director James W. Noel said. The project has not yet filed an annual financial report for its 2021 financial year, but its financial report for 2020 showed liabilities exceeding assets by $13.1 million.
Morgan, the county administrator, believes the site still much going for it, with its location close to Interstate 64, high capacity utilities, extensive parking and large swathes of open land. Development of single family housing is still proceeding rapidly, and there could still be a chance that the decline of bricks-and-mortar retailing might rekindle interest in the kind of mixed use development originally envisioned for the site.
But for York County, already hit by declines in the assessed value of the Yorktown power station and old Amoco refinery, prospects for much business development seem limited — although county officials have high hopes for light industry, probably focused on drones, at the old fuel farm that a regional economic development authority is about to buy.
“Given the County’s largely suburban residential character and minimal privately own undeveloped land, land use diversification through industrial development does not offer a realistic alternative diversification strategy,” Morgan told the supervisors this fall.
Dave Ress, 757-247-4535, [email protected]
Source : https://www.msn.com/en-us/money/realestate/they-just-aren-t-moving-york-county-confronts-a-future-with-fewer-retail-options-and-less-tax-revenue/ar-AAPTUVt2088