Return to Virginia Business - April 2004

Related story:
- Most Significant Real Estate Projects of 2003

The winners:
- Philip Morris Headquarters
- Harrisonburg Crossing
- Short Pump Town Center

Project: Relocation of Philip Morris USA headquarters from New York City to Richmond. The commercial lease transaction sparked the renovation of an historic 250,000-square-foot building that once served as the headquarters for Reynolds Metals.

Key players: Philip Morris USA, Richmond real estate companies Thalhimer/Cushman & Wakefield and Kiniry & Co. and the building's owner, the University of Richmond.

General contractor: Hourigan Construction Corp. of Richmond

Challenges of the deal: Buying out a 10-year lease from another tenant, renovating a 46-year-old building on a tight four-month schedule, restoring an architectural icon known for its distinctive use of aluminum as a building material.

Economic impact: Philip Morris's 15-year lease, with options to renew, is valued at $47 million. The relocation of the Fortune 500 company brings 270 high-paying jobs. The project sparked the extension of an enterprise zone in the West Broad Street area, which will benefit other older properties in need of renovation. As part of the deal, the state threw in $31 million in incentives, with a portion of that money available only if Philip Morris sinks the bulk of a $300 million investment into its existing cigarette plant in South Richmond. Over the next decade, the corporate headquarters is expected to generate more than $85 million in local and state tax revenues.

Judges' comment: “Landing a corporate headquarters raises the visibility of the market, and it's nice to see that Richmond has a new driver for its regional economy.”

Return to Virginia Business - April 2004