Downtown Norfolk is about to get a shot of real, mixed-use, urban, infill development, and from the looks of it, everybody wins.

Photo | Google

As announced today at the monthly Downtown Norfolk Council meeting, the Union Mission building (located at the corner of Brooke Ave and Boush St) has been purchased by the Coumbia, South Carolina-based US Development Co. The building, as Mayor Fraim explained in his announcement this morning, “was originally gifted to the community in 1909 by John D. Rockefeller to accommodate Navy enlisted men.” Now, The Rockefeller–as it will be called, in honor of its donor–will house street-level retail shops and luxury apartments in the upper floors. Early plans also boast an indoor pool, fully-equipped gym, rooftop terrace, Zen garden and outdoor kitchen. The beautiful and surprising catch? About half of these market-rate units will rent for less than $1000 a month.

In its hundred-year lifetime, the building has served Norfolk with a couple distinct purposes. After its time as the Navy YMCA, it was purchased by the Union Mission Ministries. Since the Union Mission’s 2007 purchase of a 24-acre property on Virginia Beach Blvd, the former site of Virginia Natural Gas Company on which the Mission will expand its services, the Brooke Ave building has been up for sale. (For its part, the Mission also purchased the old fire station on the corner of Monticello Ave and Virginia Beach Blvd to serve as its downtown shelter.)

And it does seem, finally, that the building has come into the right hands. As a site listed on the Historic Register, the Virginia Landmarks Register, and as one of the state’s most endangered historical buildings, it was prime for US Development Co., which focuses exclusively on downtown adaptive reuse. One hundred percent of their development is completed without creating any new support infrastructure, thereby curbing suburban sprawl and promoting high-density downtown areas.

US Development’s Executive Vice President Jeffrey Prioreschi spoke with AltDaily just after the announcement about the company’s plans.

AltDaily: When are you aiming to have everything done by?

The Naval YMCA. Photo | usgwarchives.org

Jeffrey Prioreschi: In this market–obviously a capital market–financing is difficult. We use an FHA 221 (d)(4) loan–Oppenheimer will be the vehicle, but it’s secured by a HUD loan. It’s really the only place you can get money in today’s market. Traditional financing is gone. What’s good about that it had some good terms–it’s a 40-year loan, low interest rates. But any time, as you know, when you’re dealing with government agencies, the documentation and the process take longer than it does in the private world. So it will take approximately 10 months to close on the building. But it’s not just closing on the building, it’s closing on the development. At that point, we’ll have the acquisition loan, the construction loan, and the permanent loan. So you’re not just getting the loan to buy the building, because that’s not what we want to do–we want to develop it. It’s an approximately $17 million dollar investment to do the project.

When does the first person move in?

It will be approximately 10 months after that. So it’s 20 months from now we expect the first person to move in.

What leads you to optimism that in this market there will be people who want to move downtown, and have the money?

Well, I think some of the economy helps what we do. It’s going to take a while. It’s going to take, I believe, over five years to get somewhere out of this mess that we’ve gotten ourselves into. I think we’ve hit bottom, and I think it’s going to be a slow process up. So it’s two parts: I think more people are gravitating to cities because they’re going to reduce their transportation costs. And this part of the market, this part of Norfolk, is so under-served. In a building less than 30 years old, you cannot find an apartment for less than $1,200 a month–a one-bedroom in downtown Norfolk. I know a lot of it is dictated by how much the Navy gives people; that’s fine, it makes people profitable, whatever…but the people who work downtown have been really left out in the cold in your downtown renaissance. I left here in ’96 and downtown was very marginal at best. We rolled into town July of 2008 and we were just amazed at what has happened in this city; a renaissance.

Let’s say that this was the building next to the Union Mission and the Mission was still going to be there, would you have been interested in developing next to a shelter?

Yes. We do that in Columbia. First of all we’re very supportive of the homeless community. It’s a needed service. Obviously a lot of people don’t want it right next to theirs. But there’s another way of looking at it. Those people, if they’re not located there, more likely they’re going to be wandering the streets, sleeping in alleyways, and such. The ones we did in Columbia are about half a block from the Mission. It’s part of the downtown landscape. And really what changes it most is the more people you bring downtown, [then] the homeless people just become part of the landscape. It’s when you don’t have people that they overwhelm them in downtown. If you go to New York City or any big city, there’s homeless people everywhere, but it’s a non-factor because there are so many people in that community.

What else needs to be placed downtown to make sure that all these apartments get filled? What amenities do you see downtown Norfolk as missing?

The GranDevine, a Columbia redevelopment by US Development Co from a schoolhouse into luxury condos. Image | usdevelopment.us

Obviously I’d like to see a little more street-level retail. And I know with the mall, it’s kind of a conflict. But there’s opportunities with certain boutique-type stores. I don’t know if you’ve been to Greenville, South Carolina, but they’ve done a good job with their downtown and implemented retail. We have some retail contacts that, believe me, we’ll explore to try to bring up here. But I would say a little more retail activity–you’ve got plenty of restaurants, plenty of bars, you have a grocery store, you have transportation, you’ve got a hospital close by. That’s the only thing, if I had a wish list, that I would like to see–but the city has already taken initiative to hire a retail recruiter. It’s the same process we did in Columbia, South Carolina, and it’s paid off for us. I hope it pays off for this city. [Margaret] “Midge” McCauley and ERA Works [now Downtown Works] did a study for Columbia; we hired a retail recruiter through that process; and within the first year we had three or four new retail [stores] announced on our Main Street which is not nearly as vibrant as your downtown here.

Do you all have ideas as to what you would like to see in the street-level retail below your building?

What we’d really love to do is make it a European spa–there’s a beautiful pool down there. Now the problem is retail is hard to get in this economy. There’s not a lot of people looking to expand. If we can get a European spa for the basement, take advantage of that pool; if we could get a nice coffeeshop or a boutique clothing store, we’ll explore those. But we don’t have anything with a firm foundation, and we’ll rely on [the help of] the Downtown Norfolk Council.

We’re glad to be here. We [want to] do everything we can for this community; we’d love to help it. I really think it’s a severely under-served market in your downtown. I mean, it’s grossly under-served.

Well, it sounds like you’re doing it the right way.

Well, we try. We try to be responsible developers. We just want to do the right thing.