Waters Place project at standstill

Under development for about six years, so-called “Waters Place” next to the Depot remains on solid ground, although the residential-commercial project has certainly evolved in that time.

They’ve had to change its scope in order to coincide with changing demand in the real estate market, says the Charlottesville developer, Octagon Partners, a.k.a., OPRE.

But the town of Culpeper claims variations in the multi-million dollar development venture are a “downgrade” not in line with what was originally promised back in 2007, including a “pedestrian plaza” on Waters Place, the street.

A timeline for the future of the half-finished project is up in the air due to ongoing differences between the developer and the town. A Town Council committee is expected to weigh in on the issue in the near future.

Whatever happens, Octagon Partners says it is committed to finishing what it started, albeit with modifications along the way.

For sale to rentals

At a meeting Tuesday, the Culpeper Town Architectural Review Board took a look at proposed changes to ongoing redevelopment of the large warehouse buildings at Culpeper Street and Waters Place, adjacent to the train depot.

According to J.P. Williamson, managing member with Octagon Partners, his firm approached the town about a year ago to change the design for phase two of the project involving the expansive “South Building” on actual Waters Place, a tiny street located behind Calhoun’s Ham House on East Street.

The as large four-story “North Building,” fronting on Culpeper Street, has already been renovated into 11 residential rental units averaging 1,300-square-feet in size each, Williamson said. All are occupied with monthly rents in the $1,200 to $1,400 range, he said.

Waters Place, however, was originally imagined as “for-sale condos” back in 2006 when Octagon Partners purchased the vacant, circa 1920s building complex for $2 million, investing a reported $10 million on the phase one rehab.

By 2008, a Waters Place sales center emerged on nearby Davis Street with one-bedroom condos selling for $240,000 and the three-bedroom penthouse going for a cool $440,000.

Those days are obviously gone.

“The market is less condo sales then it is people wanting to live downtown and live in a nice affordable place,” said Williamson outside Tuesday’s ARB meeting.

That meant trimming the size of residential units in the second phase.

The new plan reduces the overall footprint by about 4,500-square-feet, said Williamson, and eliminates an originally planned third floor on the yet-unfinished South Building.

He said the town agreed to the changes – in concept.

“Typically for-sale condos have 30 percent more square feet per unit than a rental. That’s just the way it works,” said Williamson, founding partner with Octagon, whose Charlottesville properties include the old Martha Jefferson Hospital downtown and the historic Hardware Store on the Downtown Mall.

He said there “are no opportunities” currently to build for-sale condos.

“Good luck finding a lender who will lend you money on a condo,” said Williamson. “But there is a huge demand for rental properties and that’s what we’re trying to build.”

Project improving

The 13 apartments in the South Building, per the new plan, will be smaller, about 800-square-feet, and renting for less – around $1,000 a month, said Williamson.

It should be noted that rental amount is substantially higher than what the apparently outdated Waters Place web site advertises for units in the South Building: “coming soon 2011” for $650 to $850 per month.

First floor storefronts in phase two will be rented to commercial tenants already waiting in the wings to move in, Williamson said Tuesday.

Obviously frustrated at the recent ARB meeting, he equated the process to get his modified project approved by the town of Culpeper as going around in circles.

Adding to the situation is damage to the South Building sustained in the August 23 earthquake.

“We are in the process of removing and shoring up part of the second floor,” Williamson said. “There are some areas that concerned us that we wanted to repair.”

Thus the safety fences presently surrounding the nearly century-old building on Waters Place.

At one point, Culpeper County Building Official Bob Orr considered condemning the building because of the damage, and Octagon came to the ARB for a demolition permit. The ARB, uncomfortable with razings in the historic district, declined to grant the permit.

In the meantime, Octagon Partners architect Bob Pineo reworked designs for phase two of Waters Place to include taller and wider windows on the second floor to compensate for lost elevation due to not building a third level.

“I tried to take all your advice,” he told the ARB Tuesday.

The ARB generally liked what they saw.

“I think your project is improving for your investment up here,” said ARB member Michael Lysczek, a local architect.

ARB member Chris Hamilton, likewise, said the venture was “getting better and better.”

Pedestrian plaza?

Unresolved is the issue of developing a pedestrian plaza on Waters Place, the street, as depicted in original plans approved by town council.

Culpeper Town Director of Planning Patrick Mulhern said the Town Council Planning Committee, which meets monthly, would have to decide the way forward in that regard.

“Since council approved an application back in 2007, it should go to them first to make sure they even want to consider it,” Mulhern said.

“My guess is they will not even want to consider it.”

As part of an original agreement, the town was to dedicate Waters Place to Octagon Partners for development of said pedestrian plaza, meaning no vehicular traffic.

Williamson told the ARB it was more like “we talked about an opportunity to create a pedestrian flow,” noting there would still be access for emergency vehicles.

“The town never deeded us the right of way on that property,” he said.

That also impacts the question of whether the South Building will have wraparound awnings on the first floor, as proposed and then retracted and being proposed again.

In order to have awnings – as the ARB prefers – there needs to be a sidewalk, which again would be built on public right-of-way, which Octagon Partners does not own.

“I am happy to put a sidewalk in an move forward,” Williamson told the ARB.

Moving forward

Outside the meeting, he declined to specify how much Octagon had invested so far in Waters Place saying, “Plenty of money and plenty of time.”

Has it been worth it?

“It’s a hard time to ask that question because this is my fourth time in front of ARB and I now have a new issue that is outside of their purview,” Williamson said. “I’ve been working for a year to respond to their requests and comments and I get to the end and I feel like I’ve been distracted for a year on an issue that I’m unaware of,” he said of the pedestrian mall issue going to town council committee next week.

Nonetheless, the way forward is forward, Williamson said.

“We are going to build it and it’s going to be a great asset to the community. If it takes another year, it takes another year, but we are committed to going forward with it,” he said.