Tuesday, January 04, 2005
New River projects unfruitful
A developer hasn't been able to bring business to the New River Valley. Read the e-mail that made mall proposal story public.
Robert Smithwick's reputation for creating prosperity in Norfolk preceded him into the New River Valley in 2001. But so far, he's not been able to deliver the hoped-for jobs and tax revenues to localities here.
The resume of the 76-year-old president and chief executive officer of the Eastern Shore company that recently proposed a large-scale mall for downtown Blacksburg is studded with a handful of multimillion-dollar projects. The largest and most successful of them is MacArthur Mall, a 1.2 million-square-foot retail center in Norfolk.
In the mid-1990s, Smithwick, then Norfolk's development director, persuaded Norfolk City Council to wring $100 million out of an already lean budget to help build the mall, which eventually attracted retail giant Nordstrom to the city's decaying downtown.
That store attracted shoppers, which attracted more businesses. Downtown came alive and the first year's tax revenues were more than enough to cover the city's debt payments on the bonds it pumped into the project. The gamble had paid off.
"It was a bold move," said Roanoke City Manager Darlene Burcham, who worked with Smithwick as Norfolk's deputy city manager.
Smithwick's strategy "certainly proved to be very accurate. ... He convinced Nordstrom that Norfolk was the place to go," she said.
That success solidified Smithwick's reputation as a deal maker and convinced some New River Valley localities in the past four years to hire the company he formed after leaving Norfolk, Branwick Associates, to create projects that might attract businesses, create jobs and increase tax revenues.
But the projects that Smithwick has nurtured in the valley have not been as successful as those in Norfolk, at least not yet.
In April, Radford taxpayers, who have seen their city's budget shrink in recent years, may have to shoulder up to $2.2 million in debt to pay for an empty industrial shell building Branwick built there in 2002.
Blacksburg taxpayers have paid Branwick nearly $70,000 since 2002 to help bring retail businesses to downtown, but officials can't point to a single business that has opened because of Branwick's work.
Branwick opened a new shell building in Floyd County in June, but so far does not have an interested tenant or a buyer. If it's not filled by April 2007, the county will have to buy the $2 million building from Branwick.
Two other NRV projects listed on the company's Web site portfolio, titled "Snapshots of Success," do not exist.
A shell building slated for Giles County was proposed in 2002, but never was built because financing fell through - yet it was listed on the company's Web site until Monday.
A "Blacksburg, Virginia Main Street" project that's still listed on the site never existed, even on paper.
"I don't know why that's up there," Assistant Blacksburg Town Manager Marc Verniel said in November.
Smithwick declined to comment for this story.
Still, Verniel said he's happy with Branwick's work for Blacksburg.
"There's more retail interest in the town than there has been in a while," he said.
Although retail recruitment didn't make it onto Blacksburg Town Council's 2004-06 goals list in August, it remains a high priority. Since the 1980s, the town has lost all of its major retailers and has been casting about for ways to reverse the trend.
Last year the town struggled with a $1.6 million budget shortfall, and Verniel has told the council to expect another shortfall in the coming year. Retail and commercial development could remedy that problem over the long term, he said.
After Branwick proposed a 620,000-square-foot mall to the council in a closed session in September, the town ended its retail recruitment contract with the company to avoid conflicts of interest, Verniel said.
But he added that the town may rehire Branwick in the spring if nothing comes of the mall project, which he and other town and county officials say has stalled.
"Their extensive contacts and experience, that's where they were really valuable" and the payoff of investment in Branwick "is yet to come," Verniel said.
Radford Development Director Basil Edwards said the city's industrial development authority could have built the shell building on its own, but they bought into Branwick's business contacts and marketing ability.
Branwick said initially that it had a tenant interested in the building, but the deal fell through. Since then, Smithwick has brought no businesses to tour the Radford building, Edwards said.
"We were hoping there would be more activity" around the building, "but I don't know the extent of the marketing they have done," he said. "I expect we will eventually have a tenant."
The New River Valley Economic Development Alliance, which introduced Branwick to the valley, has brought in nearly a dozen businesses to tour the building, but none has made an offer to buy or lease, Director Aric Bopp said.
The situation "has been frustrating for everyone involved," including Branwick, said Radford City Councilman Bruce Brown.
Radford needed the shell building to compete with localities that can offer millions of dollars in incentives to companies looking for a home, Brown said.
Edwards declined to discuss details of the contract with Branwick, such as how much debt taxpayers might have to assume, saying it was confidential.
Roanoke Valley Economic Development Partnership Director Phil Sparks said it's too soon to judge the success or failure of the Radford and Floyd County shell buildings.
"Keep in mind what's happened since 9/11. There's been an incredible turndown in the economy. It's really been tough times for regions in Virginia because companies haven't been moving," he said.
Other Branwick development projects have suffered fates similar to the New River Valley projects. The company owns a shell building in Perquimans County, N.C., that remains empty three years after it was completed, and an office complex that the company hoped to build in Norfolk last year folded when banks wouldn't finance the construction.
News researcher Belinda Harris and staff writer Greg Esposito contributed to this report.





