Richmond’s new high-rise

by Rob Walker
For Virginia Business
September 2005

THE DEAL: Riverside on the James, a $90 million, mixed-use development with 230,000 square feet of Class A office space on historic Brown’s Island overlooking the James River, Haxall Canal and Richmond skyline. The first major addition to Richmond’s skyline in 15 years overcame many challenges both physical and political. At one point, Richmond’s City Council nearly killed the project, which rises 15 stories from a flood-prone island. A second, 18-story tower includes 122 upscale condominiums, 800 parking spaces, retail and entertainment venues and spectacular river views. The anchor tenant in the office building is the law firm Troutman Sanders. Harris Williams & Co., a rapidly growing middle market mergers and acquisitions firm, also has moved in.

KEY PLAYERS: Developer Daniel Corp., Alex B. “Andy” Andrews Jr., senior executive vice president for Daniel Corp.; Michael M. Campbell, vice president; Dominion Resources, owner of the site; Jake Lutz, project manager, and Robert D. Seabolt, administrative partner, Trout-man Sanders; Brassfield & Gorrie LLC, general contractor; Calvin Jamison, former Richmond city manager; the Cordish Co.

HOW THE DEAL UNFOLDED: For years, developers had unsuccessfully pursued opportunities for Brown’s Island. It took a persistent developer (Daniel), a motivated site owner (Dominion), a committed lead tenant (Troutman Sanders) and city leaders to complete the deal. In 2002, when Daniel approached Troutman Sanders with a model for the island development, the law firm’s lease in a Main Street tower was about to expire. The company had recently merged with Mays & Valentine and needed more space. “We wanted to stay downtown, close to our practice and as a part of the city,” says Seabolt. The Brown’s Island project seemed a perfect, if somewhat risky, fit. With the lead tenant in place, Daniel fine-tuned its proposal to secure city assistance. And despite initial rejection from Richmond’s City Council, the players reintroduced plans that finally won approval.

MAJOR HURDLES: After finding its way through Richmond’s prickly political process — where the project almost died during a last-minute dispute over incentives — developers had to build the high-rise on a flood-prone island between whitewater rapids, an historic canal and a working train trestle. “It had to be the most difficult site in America,” Andrews says. The contractor built two bridges (paid for by the city) to provide access to the island, first for the builders and then for tenants and residents. An old power plant was destroyed while another, with a smokestack, was incorporated into Cordish’s entertainment center. The result, Lutz says, is “an amazingly challenging, stunningly beautiful site that can’t be duplicated anywhere.”

ITS ECONOMIC SIGNIFICANCE: Richmond’s incentive package for the Riverside project, which included $12 million in tax abatements over 15 years, $3 million for bridge construction and streetscape enhancements, still arouses controversy. But developers say Riverside’s impact on development downtown is immeasurable. The professional services firms in the building will pay business, professional and occupational taxes, and taxes will be generated by restaurant and entertainment operators. Hun-dreds of workers will come to the island every day, and projects are blooming all along the city’s downtown Canal Walk. David H. Downs, real estate professor at Virginia Commonwealth University, credits Riverside as being a crucial turning point in the riverfront’s redevelopment. “Now, you can drive a stake at Rocketts Landing” — where a much larger mixed-use project is under way — “and pretty much everything to the west along the river in the city is gold.”

Daniel must think so. It has plans for another riverfront development, Vistas on the James. The $50 million, 18-story condominium tower proposed for Virginia Street would offer 162 units.