A growing Richmond-based financial services firm is leaving downtown for the leafy suburbs — and lower taxes.
Fifty-man Live Well Financial leased about 8,000 square feet in Boulders Center in Chesterfield. [It’s the first new lessee since Hertz purchased the offices as part of a five-building, $25 million deal with Parkway Properties that closed in March.]
Michael Hild, CEO at Live Well, said he was leaving the One Capital Square building at Eighth and Main streets and moving to Chesterfield in part to escape the city’s high gross receipts tax, a tax imposed on businesses based on sales that can be as high as $0.58 on every $100.
“We opened seven years ago, and we paid the high taxes,” he said. “But we have significantly higher revenues and institutional investors we have to answer to. We just can’t justify the enormous tax burden. The City of Richmond has the highest gross receipts tax in the area.”
Chesterfield, where Boulders Center is located, has a gross receipts tax rate of about $0.20 per $100.
“We love the City of Richmond and would have stayed if we’d found an agreement on the tax issue and found a building with an uninterrupted power source, but unfortunately we couldn’t do that. We found a space in Tobacco Row that would have worked, but when we made no progress on the tax issue, we had to seek other options.”
The City of Richmond did not have a response to a request for comment prepared by press time.
Live Well sells pools of mortgages issued by the government mortgage-backing agency Ginnie Mae. The company also buys mortgage pools and services the underlying loans.
Live Well was also looking for was a generator that would ensure the building would always have power, something he said he didn’t have at One Capital Square. Hild said that last September the company lost power, phone and Internet when a water main broke, which nearly spelled disaster for the company.
“It almost put us out of the business,” he said. “We’re so dependent on being open during banking hours. We needed to be able to remain open and in business regardless of the weather.”
Live Well will move into Boulders Center on April 1.
The lease at Boulders Center leaves about 25,000 square feet of space vacant, said Suzanne White, a broker for Cushman & Wakefield | Thalhimer who represented the landlord.
“Live Well’s lease takes down much of the biggest block of vacant space in the building, which was about 11,000 square feet on the fourth floor,” White said.
White’s colleague Evan Magrill also worked on the deal, and Brian Berkey, with Thalhimer, represented Live Well.
The quoted price on space at Boulders Center is $16.50 per square foot per year.
Live Well is planning to renovate the space. In addition to Boulders Center, Hertz also owns Winchester and Moorefield I, II and III.
Will Davis, the head of economic development for Chesterfield County, said companies often move around the area based on individual needs and that gross receipts tax is only one consideration.
“We could have a company move from Chesterfield to downtown to be close to a particular customer, for example,” Davis said. “People move around the area depending on their particular need, and we want people to be in the best location for them. We try to promote regionally. We don’t go out and market against each other.”
A growing Richmond-based financial services firm is leaving downtown for the leafy suburbs — and lower taxes.
Fifty-man Live Well Financial leased about 8,000 square feet in Boulders Center in Chesterfield. [It’s the first new lessee since Hertz purchased the offices as part of a five-building, $25 million deal with Parkway Properties that closed in March.]
Michael Hild, CEO at Live Well, said he was leaving the One Capital Square building at Eighth and Main streets and moving to Chesterfield in part to escape the city’s high gross receipts tax, a tax imposed on businesses based on sales that can be as high as $0.58 on every $100.
“We opened seven years ago, and we paid the high taxes,” he said. “But we have significantly higher revenues and institutional investors we have to answer to. We just can’t justify the enormous tax burden. The City of Richmond has the highest gross receipts tax in the area.”
Chesterfield, where Boulders Center is located, has a gross receipts tax rate of about $0.20 per $100.
“We love the City of Richmond and would have stayed if we’d found an agreement on the tax issue and found a building with an uninterrupted power source, but unfortunately we couldn’t do that. We found a space in Tobacco Row that would have worked, but when we made no progress on the tax issue, we had to seek other options.”
The City of Richmond did not have a response to a request for comment prepared by press time.
Live Well sells pools of mortgages issued by the government mortgage-backing agency Ginnie Mae. The company also buys mortgage pools and services the underlying loans.
Live Well was also looking for was a generator that would ensure the building would always have power, something he said he didn’t have at One Capital Square. Hild said that last September the company lost power, phone and Internet when a water main broke, which nearly spelled disaster for the company.
“It almost put us out of the business,” he said. “We’re so dependent on being open during banking hours. We needed to be able to remain open and in business regardless of the weather.”
Live Well will move into Boulders Center on April 1.
The lease at Boulders Center leaves about 25,000 square feet of space vacant, said Suzanne White, a broker for Cushman & Wakefield | Thalhimer who represented the landlord.
“Live Well’s lease takes down much of the biggest block of vacant space in the building, which was about 11,000 square feet on the fourth floor,” White said.
White’s colleague Evan Magrill also worked on the deal, and Brian Berkey, with Thalhimer, represented Live Well.
The quoted price on space at Boulders Center is $16.50 per square foot per year.
Live Well is planning to renovate the space. In addition to Boulders Center, Hertz also owns Winchester and Moorefield I, II and III.
Will Davis, the head of economic development for Chesterfield County, said companies often move around the area based on individual needs and that gross receipts tax is only one consideration.
“We could have a company move from Chesterfield to downtown to be close to a particular customer, for example,” Davis said. “People move around the area depending on their particular need, and we want people to be in the best location for them. We try to promote regionally. We don’t go out and market against each other.”
Leave it to the city to run more people out of town
They just do not get it.!
Their responce will be just raise the taxes on those who sre still there so more people will leave.
It would be nice if they had some incetives to keep the busines to stay in the city
Should have moved to Hanover County!! No gross receipts tax. Something to consider next time.
The City raised the tax assessment on my 32,000 SF office building 300 percent last month. They don’t get it. I will relocate as soon as the opportunity arises.
Good riddance. We’ll attract other businesses. Have fun dining at Applebee’s for lunch!
Nava
Where are you coming from? Where do you think these magical other businesses will come from? Why would a new company want to start in RIC when they can go to the county and get more services that are better for less money.
Sean
You think triple the increas is OK? John Crank is adding value to the City and his people spend money in the city. Let the city go after the dead beats who do not pay any taxes
What’s wrong with Applebees? The beer tastes just fine.
@JohnCrank While I feel your pain having had multiple properties I own get valued higher and higher… the reality is the city raised the taxable value of your property from $11.16/sq ft to $33.5/sq ft. You really think your office building in Shockoe Bottom should be valued at $11/sf? Really? Sounds like you rode a good wave while it lasted.
@john M I think phrasing it as “triple increase” is sensationalism when you take into account the actual numbers (11/sf and 33/sf), I really don’t see the big deal. It looks like the business got a GROSSLY undertaxed for the past number of years. For perspective, i live in a pretty regular 1608 sf house south of the fan and my house assessed at $276k ($171/sf, AKA market value/sf). At the same time, Mr. Crank’s 37,000 sq ft office building in shockoe assessed at $416k ($11/sf, THE MARKET RATE FOR A BURNED UP SHELL IN CHURCH HILL). Put it this… Read more »
Sean I am not sensationaling as you would say do the math 11 times 3 equals 33 Sounds like you never have owned or have to run a business in the CITY. I had an 4000square foot office on Main St, due to taxes and regulations I moved to a 20,000 square on West Broad in the County and my entire over head went DOWN. So get this and follow the math. My square footage went up 5 times and my taxes go down. What you and most other people do not realize is all the other / higher taxes… Read more »
I do own a small business in the city and I currently own 6 properties in the city (northside, southside, near west end) so I’m very familiar with the tax differences. I’m not for higher taxes, I am however pointing out the huge advantage original poster had at paying such a low rate for so long. The building DIRECTLY next door to his is less than half the sq ft. (15744) They pay $78/sf in taxes and have been around that for almost 10 years. I’m not saying its right or wrong, but jumping UP to less than HALF the… Read more »