With an almost $10 million deal sealed, a big-time Southside development is taking shape.
Thalhimer Realty Partners closed Wednesday on its purchase of Manchester’s former Reynolds South plant with plans to build about 260 apartments and, eventually, a mixed-use development with office and retail components.
Thalhimer paid $9.25 million for the 17.2-acre Reynolds property, which is one of the city’s largest pieces of developable land and is considered a potential centerpiece for continued growth in Manchester.
“We think the size and the location provides for a number of good options for mixed-use development, given the proximity to downtown, the James River and the views of the skyline,” Thalhimer Realty Partners associate Matt Raggi said.
Thalhimer plans to begin work on the residential portion, which will be created from the plant’s three existing buildings, in the first quarter of 2014. Raggi said the firm expects construction to take between 12 and 18 months. Walter Parks Architects designed the complex, and Thalhimer’s construction wing, MGT Construction, will be the project’s contractors.
Thalhimer also has plans for a retail component to front Hull Street and an office development near the Corrugated Box building and Legend Brewing, but it will not build either portion on speculation. A timeline for a Reynolds South retail development will be driven by the market, Raggi said, and Thalhimer will add the office portion as potential tenants arise.
“It will be user driven,” he said. “If a built-to-suit opportunity arises, we’ll be prepared to kick off that phase of the development.”
Thalhimer will be the next in a long line of developers to add apartment units to the Southside neighborhood: Among complexes completed in the past two years and buildings under construction, there are more than 1,000 new apartments in Manchester, and Raggi estimated that there are 3,000 units within five miles of Reynolds South.
But development in the neighborhood has been rather one-dimensional. With about 18 acres to work with, Raggi said Thalhimer looks forward to expanding on the run of residential development.
“With that many units and that many bedrooms, we’re going to need to bring retailers to the area,” he said. “I think that Manchester lacks those types of services.”
The Reynolds site formerly housed Reynolds Metals. The plant employed about 500 people when it closed in 2009. The site was previously owned by New Zealand-based Reynolds Group Holdings.
Tom Wilkinson of Franklin Development had the property under contract but struggled to line up financing and ultimately lost the contract in November 2012. Wilkinson had planned a mixed-use project with office, retail and apartments for the site.
Thalhimer has had the property under contract since at least April, about five months after it went back on the market. CBRE | Richmond represented Reynolds in the transaction, with Rob Dirom, Scott Boyers, Trib Sutton, Scott Durham and John Carpin handling the sale on behalf of the seller. CBRE | Richmond handled the sale of the Reynolds North property last year.
Cushman & Wakefield | Thalhimer’s Jeff Cooke brokered the deal on behalf of Thalhimer Realty Partners.
Thalhimer has been on a bit of a buying spree. The firm this year scooped up two distressed apartment buildings on the Southside: the 66-unit Riverside Drive Apartments and 168 units at Deering Manor.
Thalhimer is also renovating the former Julian’s restaurant building near Boulevard and West Broad Street, and Thalhimer in July bought a Scott’s Addition industrial building with plans for a historic tax credit renovation. But the sprawling Reynolds South property is the company’s largest acquisition to date in the Richmond area.
Across the river, WVS Companies and Fountainhead Properties have put 174 apartments at the Reynolds North property. That development team bought the seven-acre property at Canal Walk from Reynolds Group Holdings in February 2012.
Tom Papa, whose firm Fountainhead also has 200 apartments on the rise just blocks from Reynolds South, said the Thalhimer development is a part of a long-running progression of both population and development from the suburbs back into downtown Richmond.
“If you go and you put the population where it was 10 years ago and you just track it every year until today, what you will see is it doesn’t take too many more years until you have enough people in the area to justify the stores that the suburbs usually get,” Papa said.
A longtime developer in downtown Richmond, Papa is excited to see such the Reynolds South development finally beginning to take shape.
“This is what we have believed in at Fountainhead Development for the last decade,” Papa said. “I wish I were the one doing it but it’s gratifying to me to see it all happening.”