Sunday, August 28, 2011
Developer sees old buildings in a new light
Bill Chapman of Richmond shares why he's interested in developing in Roanoke.
Eric Brady | The Roanoke Times
Richmond developer Bill Chapman successfully completed the Fulton Motor Lofts, and now he’s taking on the Lofts at West Station — the two warehouses (shown below) next to Habitat for Humanity Restore on Salem Avenue. That project is slated for completion in January.
Photos by ERIC BRADY The Roanoke Times
Richmond developer Bill Chapman successfully completed the Fulton Motor Lofts, and now he's taking on the Lofts at West Station - the two warehouses (shown below) next to Habitat for Humanity Restore on Salem Avenue. That project is slated for completion in January.
Photos by ERIC BRADY The Roanoke Times
Richmond developer Bill Chapman successfully completed the Fulton Motor Lofts, and now he's taking on the Lofts at West Station - the two warehouses (shown below) next to Habitat for Humanity Restore on Salem Avenue. That project is slated for completion in January.
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Bill Chapman came to Roanoke for the first time in 2005 and immediately saw potential for developing old warehouses and buildings along Salem Avenue.
The developer had already completed about 15 similar projects in Richmond, bringing residential living to the capital's downtown.
By 2006, Chapman had bought three buildings in the 300 and 400 blocks of Salem Avenue in what later became known as the West Station District. One of them he rehabbed into Fulton Motor Lofts. The building next door, at 416 Salem Ave., is slated to become office space for small business owners. The third building, which is actually two connected warehouses, is scheduled to open in January as the Lofts at West Station, a 72-unit apartment complex with a ground-floor restaurant.
Chapman recently talked about why he was interested in developing old buildings in Roanoke, and his plans for the West Station District.
>> You've done a lot of work to historic buildings in Richmond. What got you interested in Roanoke?
In 2005, Granger Macfarlane brought a group of developers from Richmond into Roanoke to see the area. I'd never been to Roanoke.
I remember leaving very impressed. I liked the fact that Roanoke was compact and very walkable from one end to the other. I liked the fact that there was a state-of-the-art YMCA on one end of downtown and entertainment on the other, which made everything in the middle in play. There was a low perception of crime, and what we saw was a very good demand in an underserved market.
>> What attracted you to the west end of downtown?
This area had the best concentration of high-quality warehouses in the city.
I've been in and out of enough warehouses that you know which ones are ideal for development, and these had all the tangibles that we were looking for.
When I left after that visit in 2005 my comment to a Realtor here was, "If any one of these four buildings ever comes on the market, please contact me." At the time, this wasn't a designated historic district, but I came to learn later that the city of Roanoke was pursuing on its own to have this become a designated historic district, making it accessible for historic tax credits, which is the crux for making these projects happen.
It just so happened to turn out that three of these buildings came on the market in mid-2006. The timing was just perfect.
It allowed us to get in and do a quick project with the Fulton Motor Lofts, which I think by all means was a resounding success.
>> How do you finance your projects?
It's certainly more challenging than it used to be. The cost of these projects generally outweighs what the final value of the project is. So your acquisition plus construction cost generally equals something that's greater than what the building is worth at the end, so tax credits are needed to basically pay down that debt to a sustainable level.
Financing-wise in Roanoke, I don't think we would have ever gotten off the ground with the project across the street [Lofts at West Station]. That's not to bad-mouth Roanoke lenders, I just think it's a very tough environment for small lenders right now. Had Wells Fargo not jumped on board and taken a chance on Roanoke this wouldn't be happening across the street.
>> What was it about the old warehouses that are now the Lofts at West Station that made you realize the site had potential?
These buildings had windows on both sides. They were structurally sound. They had the heavy timbers, the hardwood floors, all the things you check off your list as you're going down. Locationwise, we're right between the YMCA and the market, so we're in that footprint of where we want to be. There just aren't that many four-story, large-scale warehouses downtown with that many things going for it.
I also think not being from Roanoke makes a difference. I talk to so many people that are from here that say, "Oh my gosh! I can't believe you're doing something on Salem Avenue. That's where all the prostitutes used to hang out and that's where there were drugs." I think it's very hard when you see that for such a long period of time -- it's hard to see the potential of a neighborhood.
>> Your past projects have included "green" features such as bamboo cabinets and energy-efficient appliances. Your upcoming office project, 416 Work Lofts, will use solar energy. Why are you focused on sustainable designs?
I think it's the way of the future. I think we have to do something that minimizes our footprint. I think being a parent probably has something to do with that. More than just providing for your child, it's providing a sustainable environment for your child. That's probably the main motivating factor behind it.
I'd also say that I'm probably a more conceptual person. When I look at a project, doing the bare minimum isn't in my DNA, and I want to offer as much as I possibly can in terms of design and in terms of sustainability. So it's more of just who I am.
>> Several old buildings in Roanoke have been renovated into condos and apartments. Is the downtown housing market in danger of being oversaturated?
There's a very strong demand here. Look at absorption rates, how fast the buildings are absorbed into the market. The Patrick Henry building speaks for itself -- 100 percent pre-leased. If you look at the track record of some of the buildings that have come on the market in the last five years, they've performed very strongly and leased very quickly.
>> What plans do you have for 416 Work Lofts, or other projects in Roanoke?
My goal with coming into Roanoke was not to do several individual projects. My goal was to build a neighborhood.
The physical differences between the east side and west side of Salem Avenue are pretty obvious. On the east side you have traditional downtown with traditional lighting, traditional landscaping, traditional buildings.
You go underneath The Roanoke Times and you come into an area with a very nontraditional landscape. To me that's a huge plus. This area has a different vibe to it. We can create something that really goes into that different vibe.
We pushed very hard in 2009 to create a designated district here, the West Station District, and the idea was to create a more nontraditional, groundbreaking, cutting-edge type district that embraces new technologies and new thoughts.
The idea [for 416 Work Lofts] was to create a building that really catered to the micro or small business person that wanted a downtown presence, off-street parking and a smaller space that was cutting-edge and not offered anywhere else. It's all about creating a different type of district down here.
