Brown and Williamson conversion back on track in Petersburg

It was a phone call Tom Wilkinson likely will never forget — a $100 million development project was going up in smoke.

The conversion of the former Brown and Williamson tobacco factory at Perry and Wythe streets into apartments in downtown Petersburg had been hailed by developers as a project that could help transform the city.

But a stormy summer night in July almost derailed the project.

Lightning sparked a fire that severely damaged part of the U-shaped, historic tobacco factory.

Flames shot as high as 500 feet above the roof. To Wilkinson, the news hit like a punch in the stomach.

The fire gutted half of the building, leaving behind charred timbers and crumbling brick. It resembled a bombed-out structure from the siege of Petersburg during the waning days of the Civil War rather than the base of an upscale living community.

Despite the extensive damage, the project is back on track, and developers expect the first apartment units will be available for rent this summer.

"It never even occurred to us to abandon it," said Wilkinson, the managing partner of Richmond-based Franklin Development Group that is developing the multiphase project at the tobacco complex. "Why would we abandon it? We'll just repair what is damaged and keep on trucking."

Wilkinson said he could not disclose the financial cost of the damage, but he did say the fire shut down work on the project for nearly six months.

Some in the community weren't as confident it would continue.

"When I heard about the fire, I was afraid that with financing tightening up … that this may set it back even further, which is something we don't need at this time," said Petersburg resident William "Mouse" Jones.

The conversion of Brown and Williamson — located between Appomattox Regional Governor's School and Gillfield Baptist Church — was in the planning stages for nearly two years. Wilkinson said the entire complex is scheduled to be completed by the end of 2012.

The former tobacco plant that closed in the 1980s is being developed into a mixed-use community with 293 market-rate apartments in the heart of Petersburg's historic downtown. When it's complete, it will be similar to Richmond's Tobacco Row.

It's the largest adaptive reuse project ever in the city, city spokeswoman Joanne Williams said, and Wilkinson calls the $100 million investment a transformative project, one that may get others to invest in the city and continue to move it forward.

"Anytime we get something new, it's a sign that things are going to turn around," Jones said.

The complex will feature more than modern, upscale one- and two-bedroom residential units. Riverside Hospital will open a PACE adult day care center at the complex and employ 90 professionals. That same building will remain occupied by long-term tenant Pre Con Inc.

Adjacent is the Cameron building, a field hospital during the Civil War that will feature 20,000 square feet of commercial space, offices and 36 apartments.

The development group is closing soon on a second former Brown and Williamson building in the complex that will feature a Mexican restaurant and 100 apartment units.

"We're bringing buildings back. I think this is an excellent example of adaptive reuse," said Petersburg Mayor Brian A. Moore. "I think that's what's going to have to happen in the future for Petersburg."

Petersburg resident and community activist Linwood Christian said this conversion project may take on the feel of an exclusive, gated community, effectively shutting out residents who don't live there.

"Is this (restaurant) going to be a place if I, or others, wanted to patronize, would we be welcomed, or would it be, 'What are you all doing here?' " Christian asked.

Developers targeted historic tax credits to help finance the Brown and Williamson project. That follows a similar pattern for Wilkinson, who is involved in 29 projects in Central Virginia, including the Ram Cat Alley Apartments and Iron House Place condominiums in Richmond.

He said the tax credits provide equity in the deal and the old structures are converted primarily into apartments.

"It gives you a good feeling to take something essentially obsolete, save it and convert it into something useful and productive," Wilkinson said.

And as developers such as Wilkinson breathe new life into these old buildings, such rehabilitations can rejuvenate Petersburg, a city that experienced a 3.9 percent population loss in the 2010 census and where 17.8 percent of residents live below the poverty line.

But Christian countered that many Petersburg residents, because of the economic climate in the city, might not be able to afford new market-rate apartments that have been priced from $850 to $1,200 a month.

Developers hope to capitalize on the expansion at nearby Fort Lee because of the 2005 Federal Base Realignment and Closure Act and the influx of military and civilian personnel moving to the base.

Other projects are coming on line around the Brown and Williamson complex that some hope will serve as a catalyst to help revitalize the neighborhood.

Wilkinson is part of a group developing the former Star Tobacco property, located one block north of Brown and Williamson, into a mixed-use development.

A few blocks south on Halifax Street, the Claiborne Square Apartments senior community is nearing completion, hailed at its groundbreaking as a stimulus for projects in other neighborhoods.

"We get accused of not having a vision, but the vision, I guess, is too straightforward — getting everything back into useable, viable and contributing factors to the city," Moore said.

The full financial impact of the project may not be realized for years. The former Brown and Williamson factory at 109 S. Perry St. is assessed at $2.6 million and generates $34,604.55 in real estate taxes for the city.

The complex is in an enterprise zone. Real estate taxes are on an escalating scale and won't reach 100 percent until the end of 10 years, Williams said.

Petersburg Treasurer Kevin A. Brown said tax revenue is the most precious source of revenue in the city, and projects that generate taxes are a plus for the city.

"Any project that we can get real estate tax revenue is going to be beneficial to the city budget," Brown said. "That's why we have to be careful in all our deals to make sure we protect that revenue source."

But the benefits should extend beyond the city's coffers. Local business owners and cultural events will receive a boost from the influx of residents moving into the city.

And that growth and prosperity will generate interest from other places, drawing more people to Petersburg and increasing traffic at locally owned businesses, said Kimberly Ann Calos, who owns Kimberly Ann's boutique in downtown Petersburg, a few blocks from the Brown and Williamson project.

There also is a weekly classic car and motorcycle show — Thursday Night Thunder — and the monthly Friday for the Arts that draw people to Old Towne Petersburg.

"We're trying to make it a destination all the time," Calos said.

jslayton@timesdispatch.com

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