WINCHESTER — Actions taken by city representatives Tuesday and Wednesday indicate a proposed sale and redevelopment of Ward Plaza is on the cusp of being finalized.

“We anticipate that closing could occur next week,” City Manager Dan Hoffman said on Tuesday.

At City Council’s business meeting Tuesday night, Hoffman told the panel that an item related to the shopping center’s prospective sale had been added to the agenda. That item was an update to an agreement approved by council in February that stipulated the city government would back a $4 million loan issued to the intended buyer of Ward Plaza to cover the money needed to complete the property’s purchase.

Council unanimously approved the revised loan agreement on Tuesday, and the Winchester Economic Development Authority (EDA) followed suit on Wednesday morning during a specially called meeting at Rouss City Hall.

Hoffman said the only change in the revised agreement is the interest rate for the $4 million loan, which was originally 4.84% per year but has been increased to 5.07%. The rest of the document, which specifies the EDA will obtain the $4 million loan from Freedom Bank of Virginia in Fairfax and then allow the prospective buyer to borrow it from the authority, remains the same.

“That’s great,” City Council President Kim Herbstritt said on Tuesday.

The group that hopes to buy Ward Plaza is called Winchester Acquisition Partners LLC and is headed by investor John Wesley Gray Jr. of McLean. According to the Realtor representing Ward Plaza in the ongoing negotiations, H. Paige Manuel of OakCrest Commercial Real Estate in Winchester, Gray wants to tear down the shopping center and replace it with a mix of homes and stores, possibly including a grocery store. Demolition could begin as soon as this autumn.

To help Winchester Acquisition Partners close the deal, the EDA agreed in February to offer a $4 million loan that would be repaid to the authority in monthly installments. No tax revenues would be spent on the loan issuance unless the limited liability company defaults on its debt, in which case City Council has agreed to guarantee repayment of the loan.

According to the agreement, the EDA is willing to offer the loan, and City Council is willing to guarantee its repayment, because a series of prospective sales of Ward Plaza have fallen through over the past decade. Winchester has been strongly encouraging redevelopment of the privately owned site because, the loan agreement states, “by inducing a developer to provide housing, retail and grocery opportunities in and around Ward Plaza, the residents of the city will receive significant benefits.”

The sale price for Ward Plaza has not been publicly disclosed, but the city has assessed the 19.6-acre property in the 2400 block of Valley Avenue at $8,374,000.

Ward Plaza was Winchester’s first shopping center when it opened in 1964. Featuring a popular Montgomery Ward department store as its retail anchor, the plaza was a thriving destination for shoppers for nearly four decades. However, it began a prolonged decline in December 2000 when the Chicago-based Montgomery Ward and Co. went bankrupt and closed the shopping center’s namesake. With the exception of automotive repair shops that subsequently moved into Montgomery Ward’s former service garage, the building that comprises approximately one-fourth of the shopping center has remained empty for more than 22 years.

The absence of an anchor store also made Ward Plaza less appealing to other retail businesses, leaving many of the shopping center’s storefronts vacant for long periods of time.

Ward Plaza is owned by Walter Enterprises, a limited liability corporation formed in 1993 by Richard R. Walter of Woodstock. Walter died on April 17, 2018, and Walter Enterprises, which also owns shopping centers in Timberville, Woodstock and elsewhere in the Shenandoah Valley, was passed down to his two daughters.

The daughters, like their father before them, have only considered selling Ward Plaza to buyers who agree to complete feasibility studies on the property in a relatively short span of time. Manuel has said that Winchester Acquisition Partners, after seeking several extensions to complete the studies, has satisfied that demand.

In other business at Tuesday night’s City Council meeting, councilors:

Unanimously approved a request from Foresight Design Services of Christiansburg to grant a conditional-use permit (CUP) allowing for the construction of a 90-room Home2 Suites by Hilton hotel on a 2.5-acre parcel zoned Commercial Industrial (CM-1) at 240 Crossover Blvd. Before work can begin, the Winchester Planning and Zoning Department will have to approve the project’s site plan.

Unanimously approved an ordinance to add a planned unit development (PUD) overlay to 4.6 acres of land zoned Highway Commercial (B-2) at 151 Hope Drive. The rezoning clears the way for the Aikens Group of Winchester to build an 81-unit apartment complex referred to as Phase II of Harrison Plaza, which is an existing apartment complex on nearby Valor Drive.

Unanimously approved a series of adjustments to the city’s fiscal year 2023 budget to account for additional revenues and expenditures.

Unanimously approved the resignations of Nicholas Robb from the Board of Architectural Review and Sandra Bloom from the EDA. In a related vote, council unanimously approved the appointment of Bloom to the Winchester Planning Commission.

Met in executive session for 46 minutes to discuss the contract and performance review of the city manager, the awarding of a possible public contract and the potential hiring or appointment of a new city attorney. No action was taken following the closed-door discussions.

Attending Tuesday’s City Council meeting in Rouss City Hall were President Kim Herbstritt, Vice President Richard Bell, Mayor David Smith, Vice Mayor John Hill and councilors Kathy Tagnesi, Corey Sullivan, Phillip Milstead and Les Veach. Councilor Emily Windle was absent due to the recent birth of her daughter.