Housing on rise in city’s downtown
WINCHESTER — Within a year, finding an apartment downtown could get considerably easier.
Three projects promise to put 21 apartments or condominiums on the market late next year. The new units would help to meet a demand that now outstrips the supply.
“My intent was to do commercial space on all three floors, but the market dictated that I do apartments,” said City Council Vice President John Willingham, a real estate developer whose Graichen Building renovation project is the latest to feature downtown apartments. “I wasn’t going to fight what the market wants.”
The Old Star Building at 33 E. Boscawen St. — next door to the Graichen Building — will add 10 apartments to the city’s housing market this fall.
The former Taylor Hotel building at 119-129 N. Loudoun St. should have its five units ready late in the year, at about the same time Graichen’s apartments will be available.
The City Council wants the private sector to develop market-rate apartments downtown. Though it was not rated a top or high priority, the addition of 25 apartments downtown was among the goals councilors identified in their strategic plan for the city.
Jim Deskins, the Winchester Economic Development Authority’s executive director, said Roanoke and Frederick, Md. — nearby cities with resident demographics similar to Winchester — have reported in recent years that their downtown revitalization efforts did not really take off until housing increased. Once it reached a certain level, demand for commercial space increased.
“That provided me with anecdotal evidence,” he said, “that we needed housing downtown to create a permanent marketplace.”
Winchester officials’ goal, established a few years ago, was to add 200 to 300 new housing units downtown. Between new living space for Shenandoah University students and other completed or under-way projects, the count should be at 85 or 90 by year’s end.
At this point, he said, landlords are receiving about $120 per square foot for upscale apartments downtown. That’s part of the reason the EDA and its private partner included five apartments with the commercial space they are developing at the former Taylor Hotel.
“The market is responding favorably to this location relative to other locations,” Deskins said. “Our problem is not getting the rent; our problem is finding the place to build them.”
OakCrest Cos. has found downtown Winchester to be a good place to have apartments. It owns seven downtown units and will add 10 more at the Old Star Building.
Vaughn Foura, president of OakCrest Buildings, said the five apartments in the Lovett Building at 163-163 N. Loudoun filled quickly when it was completed in January 2010, and new renters have grabbed any units that became available. He expects the Old Star Building to be mostly or fully leased by the time it opens.
That project also includes ground-floor office space that will become a downtown welcome center.
Jim Vickers, chairman and chief executive officer of OakCrest Cos., said the Lovett Building attracted young professionals earning $50,000 to $80,000 annually, one of the city’s prime demographic targets, and he expects the Old Star Building to attract similar tenants.
“They use it as a walkable home,” he said, “where they can go to restaurants and shop with downtown merchants.”
Vickers said activity breeds activity, so as more people live downtown, more people will want to live there. He thinks the completion of the $7.1 million project to replace utilities and enhance the Loudoun Street Mall pedestrian area will increase interest.
“I know it’s going to be a challenge for the next handful of months,” he said, “but once we have that completed it will make our job so much easier in attracting people to move downtown. It’s a huge investment by the city, but I think it’s going to pay huge dividends long-term in making downtown the place to be.”
Willingham said he had been looking at the Graichen Building at 25 E. Boscawen for two or three years before he purchased the property in October. He paid $325,000 for it, land records indicate; the city’s assessed value for the property is $613,900.
“Based on the location and all the good things that are happening downtown and the increased demand for rental housing there,” he said, “I thought this would be a good time to get into the market downtown.”
The EDA voted Tuesday to provide a $180,000 low-interest “gap” loan to Willingham’s Stoneridge Capital LLC for major property renovations.
“[W]ithout these funds the project could not be renovated to its potential,” he wrote in a letter with his application, “which is not acceptable given the redevelopment within Old Town and neighboring projects such as the Old Star (Building).”
The Ritchie Law Firm will remain on the first floor of the building, but the long-vacant second- and third-floor offices will be converted into living space. Willingham said he is considering selling the third-floor units as condominiums.
Though they have fielded inquiries about the apartments, Willingham, Vickers and Deskins said they have not begun any leasing.
When their projects are completed, they likely will not be the last in downtown for either developer. Vickers said OakCrest will soon start looking for another project there, and Willingham said he would like to continue to invest downtown.
Deskins just might have the next deal waiting for them.
The EDA owns 50 percent of the area’s former jail building at 317 S. Cameron St.
Frederick County owns the other half, and Deskins said the EDA has agreed to buy the county’s interest once it can get its cash out of the Taylor Hotel project. That likely will happen early next year.
At that point, the goal will be to market the property for a specific use that will advance the city’s goals, he said.
Apartments could be at the top of that list, and he thinks the jail could be redeveloped into 10 units.
— Contact Vic Bradshaw at email@example.com