WINCHESTER — The firm proposing redevelopment of the Winchester Towers site is seeking a $4.1 million tax break from the city to offset the costs of building a parking garage to serve tenants of a planned mixed-use building.
The Winchester Economic Development Authority (EDA) voted unanimously Tuesday morning to recommend that City Council approve the incentive, which would be paid out over a 15-year period.
As proposed, the city would not have to dip into its budget to fund the incentive. Rather, the development firm Lynx Ventures Inc. would be reimbursed any extra taxes generated by the mixed-use complex, which it refers to as Cameron Square, to help pay off its debt for building the garage.
According to a proposal submitted to the EDA by the Richmond-based developer, the properties where the complex and garage would be built currently generate $11,609 in real estate taxes per year. A building with 150 to 160 apartments and 8,000 square feet of space for retail or restaurant use would generate a projected $693,476 in real estate taxes per year.
Lynx is asking that approximately $4,115,851 in real estate tax payments be returned in annual disbursements over a 15-year period, starting with $236,650 in the complex’s first year of operations.
“Parking decks are expensive, depending on the type of construction, and generally cost between $25,000 and $40,000 per parking space,” the Lynx proposal states. “Unfortunately, current market rent in the Winchester area for both apartments and parking spaces will not cover the cost of building a parking deck, thereby causing a significant financial gap. If this financing gap cannot be filled, Cameron Square will not be built.”
The garage is expected to have at least 130 parking spaces that would be leased to tenants of the mixed-use building. Construction costs would range from $3.25 million to $5.2 million.
If the city agrees to the tax incentive, Lynx states that Winchester will still benefit financially from Cameron Square during its first 15 years of operations. While the city would spend approximately $308,571 a year on emergency and infrastructure services, it stands to gain $440,216 per year in meals, utility, sales and personal property taxes paid by the complex’s 300 or more residents.
“When you look at a proposal like this, it’s like, ‘But for the incentive, the project doesn’t happen. But for the project, the revenue never materializes,’” Winchester Development Services Director Shawn Hershberger said on Tuesday. “This is a draft document, and I’m sure it will have a lot of [City] Council deliberation.”
If council approves the incentive, Lynx plans to buy the EDA-owned Towers site at 200-214 N. Cameron St., as well as parcels owned by Glaize Properties Inc. at 220, 224, 302, 324 and 326 North Cameron Street and 101 and 110 East Fairfax Lane.
The old apartment building that stood at the Towers site has been removed, but the Glaize-owned buildings on Cameron and Fairfax are still standing. Most of those buildings are vacant, but two have been modernized and renovated, and are being leased by the businesses Winchester Brew Works and NextHome Realty Select.
According to the Lynx proposal, the previously renovated buildings would be incorporated into the new Cameron Square project, and the vacant buildings at the corner of Cameron and Baker streets would be converted into apartments. Additionally, the garage and mixed-use building would be constructed to match the character of the existing properties.
If the incentive is approved and the property sales completed, Hershberger said Lynx anticipates completing construction by 2025.
“These things take time,” he said. “There are a lot of regulatory steps between today and having a solidified project, and then you still have to design it.”
The Towers project would create the second mixed-use complex in downtown Winchester. Another building with a blend of apartments and businesses is planned for the northeast corner of North Kent and East Piccadilly streets. Demolition of that site’s existing structures is expected to begin this summer.
Attending Tuesday morning’s EDA meeting in Rouss City Hall were Chairman Jeff Buettner and members Lauri Bridgeforth, Tim Painter and Cary M. Craig Jr. Members William Buettin, Douglas Toan and Addie Lingle were absent.