One of three developers seeking to re-use portions of the former Spencer’s industrial property now owned by the city government has withdrawn from an option agreement to buy a site there.
Tom Webb, a local businessman who is listed as the president of an entity known as Fabrica Development Inc., headquartered on West Lebanon Street, did so in the wake of a Mount Airy Board of Commissioners meeting last Thursday.
During that meeting, the commissioners voted 5-0 to postpone a request by Webb to alter the scope of plans he has for “Building Nine,” which Fabrica took an option on last year.
That option stated that the 1.33-acre parcel involved, containing Spencer’s property located to the rear of other buildings fronting Willow Street, was intended for a “business center” and a “performing arts center.” The estimated construction cost for those was put at around $5 million.
An amended request from Webb called for changing this to specify that the future use of the site in question could include leasing part of the property to a tenant for “advanced” textile manufacturing.
Mayor David Rowe said Tuesday that this change was sought to accommodate a T-shirt manufacturing operation headed by Webb’s son. Webb’s request also sought to reduce the construction cost for the proposed Fabrica development from $5 million to not less than $3 million.
In voting Thursday to postpone action on the proposed option changes, board members expressed concern about the manufacturing component being injected at this time. It also was pointed out that other developers did not have an opportunity to participate in the Spencer’s redevelopment from a manufacturing standpoint.
Fabrica response
Webb did not attend the meeting, but afterward sent a letter to Mayor Rowe reacting to what happened.
“This is to formally notify you that we (Fabrica principals) have determined that our proposed project for Building Nine of Spencer’s Mill does not have the full support of your board,” Webb wrote the mayor. “So therefore we will not be exercising our rights under our option dated Sept. 13, 2016.”
At that time, two other developers seeking to build a hotel/banquet center and upscale apartments also took out options to purchase Spencer’s parcels, which Webb alluded to in his letter to the mayor.
“We have struggled to find a use for Building Nine that would be acceptable to and complement the other uses proposed for the Spencer’s Mill buildings,” the Fabrica president states in his letter. “Our proposed use had the full support of the other developers, who were excited about bringing over 50 new advanced manufacturing jobs to this area.”
Webb had served on the Mount Airy Redevelopment Commission, a seven-member group appointed by the commissioners to oversee the Spencer’s project after the property was bought by the municipality in 2014.
The city board later dissolved that body, in January 2016, after it went against board wishes by including nearby private property in the redevelopment plans, including several longtime thriving businesses such as Worth Honda. This left the commissioners and mayor to spearhead the project.
Webb appears to take a swipe at this new arrangement in concluding his letter to Rowe: “I wish you and your board success as you continue to micro-manage the development of this project.”
City Attorney Hugh Campbell said Tuesday that after the letter was reviewed by municipal officials, he in turn sent a letter to Webb saying the city would accept his termination of the option agreement.
“It’s legal and it’s been accepted by the city,” Campbell said of that action, which is allowable when a party doesn’t choose to move forward with a project.
When a developer takes that position, “then it’s best for the parties to mutually terminate,” the attorney said.
Mayor reacts
Rowe indicated Tuesday that the Spencer’s redevelopment will move forward despite Webb’s withdrawal.
“He made a business decision and we respect that, and we appreciate what he’s done,” the mayor said of Webb’s efforts involving the property, “and that’s how it stands at the moment.”
Rowe said he still has a positive outlook for the project despite Webb’s pullout. “We still have two developers involved,” he said, who are proceeding with their parts of the redevelopment which represent a combined investment of about $23 million.
As far as seeking another developer to fill the void left by Webb’s departure, Rowe said this depends on identifying uses that qualify for historic tax credits sought for the project which are deemed vital in terms of financing the redevelopment.
He explained that the clearing of permitting hurdles is involved “and how the State Preservation Office feels about what else is put in there — finding something they would accept.” City officials don’t have an answer at this point, according to Rowe.
Building Nine offers much promise, the mayor said. “And I hope someone will step up to the plate.”
The mayor also reacted to Webb’s micro-managing comment.
“Tom was just expressing his feelings and concerns — it doesn’t bother me one way or the other,” he responded.
Rowe said city leaders are compelled to manage the redevelopment in a proper way. “The board has a lot of responsibility — micro-managing is what you have to do a little bit of,” he added.
At last Thursday’s meeting, before Fabrica withdrew its option, commissioners expressed a desire to obtain public input before changing the option agreement.
An inkling of that emerged in citizen postings to an online version of a news article about the meeting. This included comments suggesting that Fabrica was seeking to take advantage of tax credits and other public investment in the redevelopment to subsidize its operations, which normally wouldn’t be available to a manufacturing entity.
Two remaining options
Each of the three developers was granted a two-year option to buy property, with the city to recover $35,000 from them when those options are exercised, a total of $105,000.
Last year when the agreements were forged with the city, Campbell had pointed out that the developers likely would exercise those options if the historic tax credits are awarded.
The option timeline called for a two-year period for pre-development activities to occur at the Spencer’s site, funded by both the city government and the developers.
Those activities are to end when building permits are issued. The city then is to be repaid its pre-development costs, with infrastructure work and construction to begin at that point.
