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Council supports application for state funds
City seeks revitalization funding for hotel
Wednesday, September 12, 2012
Martinsville City Council on Tuesday adopted a resolution supporting the city’s applcation for $500,000 in state industrial revitalization funds to help refurbish the former Henry Hotel uptown.
The city previously sought the funds, made available through the Virginia Department of Housing and Community Development, but did not get them because funds ran out before the city’s application was received.
Officials have said the application was not submitted late, though.
A second round of funding is available now. A total of $1 million is up for grabs, said Wayne Knox, the city’s director of community development.
That is less than the $3 million available in the last round, so “competition will be more keen” this time around, Knox said.
Still, he thinks the project is worthwhile and stands a good chance of being funded now, he indicated.
Officials have estimated the project’s cost at $4.5 million to $5.5 million. Other possible funding sources include private donations and historic tax credits, and officials have said that one source could spur another.
Councilman Gene Teague said there are many improvements to the building that could be made for $500,000, even if no other funds are ever obtained. He did not elaborate on those improvements.
“Once financing is in place, it (the project) is going to happen,” Knox said. “You have to remain optimistic.”
The vote on the resolution was 4-1. Councilman Danny Turner dissented. He said the Phoenix Community Development Corp. should buy the building so taxpayers would not have to help fund the project.
Phoenix is a nonprofit developer involved in uptown revitalization efforts. Knox recalled Phoenix President and CEO Ray Gibbs saying that organization lacks the money needed to buy the structure.
The city bought the four-story former hotel at the corner of Broad and East Church streets at a public auction in 2009 for $425,000. It used $95,000 of its own funds, and The Harvest Foundation provided a loan to cover the rest.
Since the purchase, the city has spent about $55,000 annually to maintain the building and provide utilities to tenants, including a restaurant and insurance office remaining there.
Councilman Mark Stroud noted that even if the building had no occupants, it still would need utility service, such as heat to keep water pipes from freezing in cold weather.
Phoenix is to be responsible for developing the building, according to the council’s resolution.
Harvest has committed a $265,000 grant to Phoenix to help with so-called “soft costs,” the resolution states. It mentions that Phoenix already has put forth effort and money toward environmental, engineering and architectural concerns, plus marketing and financial analyses, in determining that the building could be redeveloped.
The city is willing to transfer ownership to Phoenix if the organization is willing to assume outstanding debt on the property, the resolution says.
Knox said the city must submit its application before Sept. 26.
Gibbs, who was not at the council meeting, has said he will personally drive the application to Richmond and hand it to state officials if that is needed.