Petersburg’s revival

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by Donna C. Gregory

When developer Larry Shifflett ran out of old warehouses to rehab in Richmond, he headed south of the James River. His scouting venture ultimately landed him in Petersburg, where he found historic architecture, a blossoming arts community and city officials who were ready to do business. Shifflett and his son, Garrett, set to work on a $5.5 million project converting an old cigar factory on Hinton Street into South Street Lofts, a 41-unit high-end apartment building.

The target market for the apartments includes military personnel, young professionals and students at nearby Virginia State University. A one-bedroom apartment rents for $850 a month, including utilities.

The Shiffletts soon found they weren’t the only ones who had discovered Petersburg’s charms. Pioneering developers, such as Richmond rehabber Robin Miller, were already on the scene, buying buildings constructed in the early 20th century and converting them into condominiums and apartments. “It’s an expansion of the Richmond market,” says Larry Shifflett, who is president of Richmond-based S&S Construction. “We’re getting a lot of people from between [Richmond] and Petersburg who … want to live in a historic area and don’t want to pay the higher prices of a Shockoe Bottom,” a former warehouse section in Richmond that has undergone extensive renovation.

But developers weren’t the only ones gambling on Petersburg’s potential. Gutsy entrepreneurs opened businesses in Petersburg’s Old Towne, lining the streets with antiques shops, furniture stores, boutiques, restaurants and spas.

The area also appeals to artists. Old Towne is home to the Petersburg Area Art League and several other galleries. Just a couple of blocks away is the Petersburg Regional Arts Center, a building housing artists’ studios. Several years ago, the art league and the arts center joined forces to create Friday for the Arts, a monthly tour of art galleries.

The revitalization of Petersburg’s Old Towne and its surrounding blocks already was on course when a government announcement kicked development into overdrive. In 2005 the Base Realignment and Closure (BRAC) Commission recommended that near Fort Lee become the nation’s second largest military training installation (behind Fort Jackson, S.C.). Fort Lee will add 15,000 military and civilian personnel and private contractors during the next three years. 

All of those people will need places to live, eat and shop, adding momentum to downtown Petersburg’s revival. “The planets are lining up just right,” says Steve Perez, president of the Old Towne Merchants Group. “Fort Lee is absolutely the biggest market opportunity available to downtown Petersburg. The BRAC expansion is going to bring in a lot of potential business.”

To tap that market, Petersburg is participating in the Army-Community Heritage Partnership, a program designed to strengthen the bonds between historic communities and military families. The program has conducted surveys to find out what families need on a variety of quality-of-life issues.

Developers like the Shiffletts and Miller are banking on the Fort Lee expansion. S&S Construction is working on its second apartment project, a former Seward Luggage warehouse at the corner of Dunlop and Commerce streets which will be called the Dunlop Street Lofts. The warehouse will be transformed into 64 one- and two-bedroom apartments by this summer at a cost of just under $10 million.

The Shiffletts doubt they will have trouble finding tenants. “We leased up the first 41 [apartments at South Street Lofts] very quickly, and we had a long waiting list,” says Larry Shifflett. “The growth going on in the area is certainly going to help us.”

Miller is targeting home buyers by rehabbing several other Seward Luggage warehouses. When complete, his High Street Lofts project at High and Lafayette streets will offer nearly two blocks of industrial-style, high-end condos and town houses. “This will keep us busy for at least the next six to eight years,” says Miller.

The first phase is already complete and includes 10 large three- and four-story town houses, selling for $250,000 to $275,000. The second phase, now under construction, calls for 24 single-floor condos, priced in the $145,000 to $300,000 range. “The demand is for single-level, rather than multilevel, because many of our potential buyers are over 50 and don’t want to negotiate stairs.”

A third phase is in the planning stage, but construction could begin by the end of the year.

As with the Shiffletts’ projects, Miller is attracting Richmond-area buyers who love the idea of urban living but don’t want the hefty price tag that comes with living in the capital city. “These [condos] are about 35 percent cheaper on a square foot basis compared to what we did in Richmond,” says Miller.

The commute from Petersburg to Richmond isn’t a deterrent either, says Miller, adding that the 25-minute drive to downtown Richmond is “closer many times than if you were trying to come in from Short Pump [in western Henrico County] in the morning.”

“Petersburg is a diamond that hasn’t been discovered,” adds Miller. “The downtown is beautiful, and it has had lots of renovation over the last three to four years. The architecture is incredible. There are now lots of restaurants and night spots downtown. It’s easy to park downtown, and it’s right on the river. With Fort Lee coming, it’s just going to be booming.”

In the meantime, Petersburg continues to move forward with its downtown revival. On Old Street, the city is renovating the former farmer’s market (built in the late 1870s) into a new visitor’s center. City officials also are talking with the National Park Service about moving its visitor’s center to an abandoned train station just behind the farmer’s market.

The city also plans to dredge the Appomattox River and restore Petersburg’s harbor, a focal point for Petersburg before World War I. The U.S. Army Corps of Engineers is expected to decide this summer where to dispose of dredge materials after tests revealed the presence of a hazardous substance. Talks are under way to find federal funding for the dredging. “It’s going to happen, but I wouldn’t be bold enough to put a date on it,” says Vandy Jones, manager of the city’s Office of Economic Development.

Owned by the city, the riverfront is within easy walking distance of Old Towne. It has been earmarked for a mix of residential and commercial development.

Elsewhere in Petersburg, construction is under way on the Petersburg Multi-Modal Transit Center at Wythe, Union, Washington and Market streets. The $16 million project will bring Greyhound Bus Lines, Richmond’s GRTC bus system and the city’s bus services all under one roof. Next to the transit center, at the corner of Market and Washington streets, the city plans to build a new library. 

But despite the focus on downtown, Petersburg hasn’t turned its back on its industrial roots. A new plant for BleachTech and an expansion of Infra-Metals are under construction in the Petersburg Interstate Industrial Park. Meanwhile, construction is ongoing on the new Southside Regional Medical Center, near Interstate 95 on South Crater Road. The 300-bed, five-story hospital is expected to open this summer. 

The sound of heavy machinery can also be heard across the city line in Prince George County where the expansion of Fort Lee is in full force.  “We’re on target, on schedule,” says Esther Lee, Fort Lee’s deputy garrison commander. “If you’ve been on post anytime recently, you’ve seen construction has started on just about every part of the installation.”

When completed in 2011, Fort Lee’s new Sustainment Center of Excellence will merge several training facilities in one location, including the Ordnance Mechanical Maintenance School from Aberdeen, Md.; the Transportation Center & School from Fort Eustis, Va.; and the Air Force Transportation Training and Air Force Culinary Training centers from Lackland Air Force Base in Texas. The consolidation will add 6 million square feet of space and boost Fort Lee’s daily population from about 16,300 to 32,700.

Also coming to Prince George County is Rolls-Royce. Headquartered in London, the aircraft engine designer and manufacturer is investing $100 million to build an assembly and test facility for its RB282 engine. The plant should be fully operational by the end of 2009, and it’s expected to attract additional suppliers.

Economic development officials believe the Rolls-Royce announcement, the expansion of Fort Lee and the recent opening of Northrop Grumman’s technology center in eastern Chesterfield County (to serve state government agencies) will make it easier to recruit more high-tech companies to the Petersburg area, particularly those in the aerospace, defense and modeling/simulation sectors. “There are a lot of things that are coming together,” says Renee Wyatt-Chapline, executive director of the Gateway Region Economic Development Organization, which serves Petersburg, Hopewell, Colonial Heights and the counties of Prince George, Dinwiddie, Chesterfield, Surry and Sussex.

“This area has received a lot of publicity over the base realignment and the fact that Fort Lee is doubling its size. Prospect activity is up 200 percent in the last 12 months. I think companies are recognizing the cost advantages … and the strengths of the Gateway Region.”

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