"We're working right now on closing acquisition," he told Style Dec. 28, adding that HRI planned to "take the title from the city in the next few days."
The move gives the green light for myriad architects, engineers and city planners who've been waiting years for the project to get traction, says Bob Mills, principal of Commonwealth Architects, lead architect for the job.
In the meantime, Mills' firm has been working with such entities as the U.S. Department of the Interior and the state's Department of Historic Resources to make sure that once the development takes off, designs comply with requirements for the project's use of $20 million in federal and state historic tax credits.
For instance, Mills is reworking plans for the Broad Street entrance to the building because of new design restrictions on properties that receive tax credits. The elevation level from the street to the entrance won't be as dramatic as was originally proposed, Mills says. As for the project's slow start, he cites the complexity of the project its scope, its partners, the lending process and the use of tax credits. "We've been ready to strike for a while now," he says, and begin work.
Likewise, others familiar with the project which calls for turning the former department store into a 240-room Hilton hotel along with 110 condominiums say the property transfer is paramount.
For more than four years, false starts and tentative financing have stymied progress. To date, the project is 18 months behind schedule. Initial plans for a 329-room hotel were scaled back. A completion date of 2007 was pushed back, too.
Meanwhile, some developers and downtown business leaders have been critical of the hotel project and ECI, which promised in 2001 to have the financial backing to get the hotel financed. ECI also received incentives and more than $2 million in fees for managing $66.7 million in streetscape and utility improvements on East Broad Street, largely because ECI promised to build an upscale hotel to complement the convention center.
And just six months ago, Mayor L. Douglas Wilder was prepared to battle the developers in court over a contract he said was in default. The Richmond Redevelopment and Housing Authority, which owned the property at Fifth and Broad streets, had agreed to sell it to ECI for $3.5 million. But four months into that agreement, Wilder criticized ECI for not producing cash or details on the project's status.
Then, in late summer, Wilder expressed renewed enthusiasm for the agreement after ECI announced signing HRI and Prudential Financial Inc. as partners ostensibly a sign that the project's financing was at hand.
"Our downtown will benefit greatly with the addition of another top-drawer hotel," Wilder said in a statement last month. Even so, RRHA agreed to sell the property for $2.74 million instead of $3.5 million.
The bargain price is worth the wait and the trouble, HRI's Fairbanks says, for both the city and the developers. HRI was looking for projects in Virginia, he says, because along with Missouri and Massachusetts, it's one of three states that offers developers a 25 percent historic tax credit on eligible projects instead of a typical 20 percent elsewhere.
Consequently, the Broad Street effort is HRI's first in Virginia. In addition to its large-scale, city-centered developments, the firm owns and operates hotels, Fairbanks says. And despite risks, he says, Richmond is considered a prime market.
Previously, potential investors had balked at the 40 percent occupancy rate of city hotels. But Fairbanks says new projects nearby such as the convention center, renovation of the State Capitol, the planned Philip Morris complex and a supportive city administration will play an ancillary role in the development's success.
Still, obstacles are expected, Fairbanks says, such as soaring construction costs. HRI has run into snags before. In August it asked New Orleans residents to provide millions of dollars in taxpayer money to help it pay for a $60 million project in the city's Warehouse District. Along with provisions for IceHouse Residences a housing complex with 221 apartments and 105 condos the project calls for a five-story garage that HRI estimated would cost $10 million. A financing arrangement was proposed through a 15-year tax abatement that helped pay for the project but drew sharp protest from those who said subsidies shouldn't be paid to private developers.
HRI has drawn criticism for other projects, too, especially its gentrification plans for New Orleans' low-income St. Thomas community. The project became a 10-year controversy that ended with HRI's adding a Wal-Mart to the mix and using a $25 million federal grant from the Department of Housing and Urban Development to help pay for it.
The developers are also credited with breathing new life into ailing cities. In 1999, HRI won a National Preservation Honor Award from the National Trust for Historic Preservation for it renovation of the Maginnis Cotton Mill in New Orleans' Warehouse District. It features 269 upscale apartments, 18 penthouse condos, commercial space, a courtyard park and a fitness center.
In addition, HRI has completed residential and hotel projects in Texas, Nebraska and Missouri. And it targets cities such as Richmond where it can apply its mission to promote "walkable urbanity," its Web site explains.
How would that work along Broad? Fairbanks says HRI's Chateau Sonesta hotel in New Orleans is a good example. "It's amazing, the parallels," he says. Both projects have been difficult to finance, he explains, and both involve the memory and edifice of a beloved yet defunct department store.
The project involved a building on Canal Street that previously had been home to the D.H. Holmes store, a city icon for 140 years. When Dillard's tried to buy the store in 1989, such public outcry followed that the national chain abandoned the idea. Owners of the property donated the site to the city. In turn, the city created the Canal Street Development Corp. to rescue the pre-Civil War structure. More than a decade later, the store's been converted into a 251-room luxury hotel.
Remarkably, it survived the devastation of Hurricane Katrina. And reminders of the store's past live on. There are alabaster pillars from the original soda fountain, for instance. But most nostalgic, the hotel boasts the store's $23,000 bronze sculpture of Ignatius Reilly. The statue mimics the opening scene of the 1981 Pulitzer Prize-winning novel "A Confederacy of Dunces," in which the comical character waits for his mother under the D.H. Holmes clock, clutching a shopping bag and wearing a hunting cap.
Miller & Rhoads didn't boast a bronze statue, of course. But it graced downtown Richmond for more than a century. This month marks the 16th anniversary of its closing. With developers on the scene, it could mean talk of a tearoom is in the air. S
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