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City agrees to sell Henry Hotel
To development firm for $1
Dave McCormick (center) gives a presentation about his proposal for the renovation of the Henry Hotel on Tuesday while Martinsville City Council listens at the Martinsville Municipal Building. (Bulletin photo by Mike Wray)
Wednesday, July 10, 2013
By MICKEY POWELL - Bulletin Staff Writer
Martinsville City Council on Tuesday agreed to sell the former Henry Hotel uptown for $1 to a Petersburg development firm which plans to completely refurbish the building into apartments and businesses.
The cheap sale price is due to The Harvest Foundation forgiving a $330,000 loan it gave the city toward buying the building four years ago.
In unanimous votes, the council approved a development agreement with Waukeshaw Development Inc. for the property as well as the sale contract. The latter was approved after the council reseated itself as the Martinsville Redevelopment and Housing Authority, which technically owns the building.
“This is a very important piece” in ongoing efforts to revitalize the entire central business district, said Councilman Mark Stroud.
Finding a developer has “taken way longer than anyone wanted it to take,” Vice Mayor Gene Teague admitted.
However, the contract and the agreement will not be finalized until probably later in the week. City Manager Leon Towarnicki said the city and Waukeshaw continue to work on terms of the deal, including a provision that would return the building to the city if somehow the firm cannot redevelop it.
“We believe we can get this (project) financed,” said Waukeshaw President Dave McCormack. A bank has shown “sincere interest,” he said, in helping to finance it, although other financing sources — such as tax credits and state aid — also will be needed.
Towarnicki expressed confidence in Waukeshaw, which has a track record of redeveloping similar properties statewide.
“My concern,” he said, is the unlikely occurrence of “a catastrophic event,” such as if McCormack were to suddenly become incapacitated and his firm no longer could handle the project.
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 Harvest put forth the loan to cover the rest.
Harvest agreed to forgive the principal and interest on the loan, Towarnicki said, adding “that was a big concession ... to move this project forward.”
The most recent figures available show that since it bought the building, the city has spent about $233,000 on it, including the $95,000 toward the purchase as well as money to maintain the building and utility connections for tenants.
In the building now are 31 apartments that have been vacated, as well as a restaurant and insurance office that remain open, officials have said.
The insurance office has expressed interest in staying there, according to McCormack.
McCormack said his firm intends to spend about $3.4 million to convert the building into 24 apartments and four commercial units. One apartment to be designed for disabled people is to be on the first floor with those units.
Most of the apartments would have one bedroom, McCormack said. They would have amenities such as energy-efficient, stainless steel appliances, he said, but he has not yet determined exactly what the amenities would be.
Washer/dryer hookups in apartments would not be among the amenities. A laundry room would be developed instead. McCormack said the scope of the project cannot accommodate hookups in individual units.
Federal Section 8 rental assistance would not be provided to tenants, said McCormack. Apartments, which would range in size up to about 740 square feet of floor space, are targeted to go for “market rates” of $500 to $650 per month, he said.
Those involved in the project indicated they hope the apartments attract students and faculty of the College of Henricopolis School of Medicine now being established uptown and the New College Institute already there.
Waukeshaw plans to keep the building’s historical features, such as metal ceilings and marble columns, McCormack said.
Yet “the property needs a total gut rehab and a fresh start,” he said, noting that lead paint and asbestos must be removed to protect tenants’ health and plumbing and mechanical equipment is outdated and must be replaced.
Councilman Danny Turner encouraged McCormack to examine other vacant properties citywide in hopes that some can be redeveloped in the future.
More about Waukeshaw’s plans for the former hotel, as well as other issues discussed at Tuesday’s council meeting, will be reported in the Martinsville Bulletin on Thursday.