Another of Richmond’s old downtown bank buildings is headed for a transformation as part of a planned $25 million renovation project.
The former Signet Bank complex at 8th and Main streets is under contract to be purchased by The Edison Co. The developer plans 190 apartments for the property and will seek historic tax credits. And at nearly 200,000 square feet, it’s the largest project the Richmond-based firm has taken on.
“I saw the great bones of this building: high ceilings, great windows, multiple elevators, plenty of parking,” said Edison Co. owner Howard Kellman. “Would it have been a little more interesting if it were a little smaller? Yes. And that was the big hurdle, getting over the size of the building.”
The Edison Co., co-owned by husband and wife Howard and Karen Kellman, will buy two buildings near the corner of 8th and Main streets. The first is a 90-year-old, three-story structure at 800 E. Main St. The second is an 11-floor tower with roughly 155,000 square feet of apartment space at 7 N. 8th St.
The buildings are owned by Washington, D.C.-based Douglas Development, the same company that is working on another office tower apartment conversion at the Central National Bank building on East Broad Street.
Edison came to the property through JLL broker Jimmy Appich, who is working the sale for the buildings’ owners. The Kellmans put the two properties under contract this spring and the deal is scheduled to close in September.
The property previously housed the Signet Bank of Richmond and, prior to that, the old Bank of Virginia. Signet was formed after a 1985 merger of the Bank of Virginia and Union Trust Bancorp. First Union Corp. bought out Signet in 1997.
This will be the second time Douglas Development has sold a Richmond property for a large apartment development. The company sold the former Interbake Cookie Factory to a partnership between Rebkee, Steve Leibovic and Dan Gecker in 2011. Douglas took about a $700,000 loss on the sale of Interbake after buying it for $6.7 million in 2005.
Douglas bought the Signet buildings for $4.25 million in 2002. Kellman declined to say what the property will cost, but he said the price of the land was figured in to his $25 million budget.
The Signet Bank conversion will be the fifth downtown tower to become apartments over the last few years. In addition to the Central National Bank building, the John Marshall Hotel on 5th Street and the First National Bank building on Main Street were both redeveloped in the last five years.
A block to Kellman’s west, Genesis Properties is working on a $31 million conversion at the 700 Centre building. Those four apartment towers alone will add more than 800 apartments to a fast-growing downtown market.
Kellman said the Signet buildings’ location and his property manager’s one-check rent payment process – where a tenant pays one flat fee for rent and utilities – will keep the Signet building competitive.
“We’ve had pretty good success with what we do, and the reason I like to think we have is that we pick projects with great locations and good natural light, have the one-check process and put in a pretty high-quality product,” Kellman said.
Scott Fowler of Fowler Architecture is the architect for the conversion. Paige Pollard of Commonwealth Preservation Group is Edison’s historic tax credit consultant.
Kellman said that Monument Cos. will also be involved in the development, potentially as an equity partner.
Chris Johnson, principal at Monument Cos., said the parties are still discussing a potential partnership. Monument, which includes a construction company and a property management firm in addition to its development arm, will have a hand in the project as either part of the ownership team or as a third-party contractor.
“The (Central Business District) is a very strong market, which has certainly been proven with John Marshall and (the First National Bank) among others,” Johnson said in an email. “Howard (Kellman) has a terrific building under contract that is empty, has an abundance of parking, and favorable zoning. That is unusual.”
The Edison Co. previously partnered with Monument on the Massey building at 4 N. 4th St. and the ongoing Exchange Place apartment conversion on Main Street. Monument’s Legend Property Group is the property manager for Edison’s properties.
While Kellman hopes to have the apartments ready toward the end of 2015, he said the project doesn’t have a strict start date. He said even after he signs the deed, the company won’t immediately be ready to start construction.
“The biggest thing here is paperwork, it’s an amazing amount of paperwork and an amazing amount of due diligence,” Kellman said. “If you own the building on Monday, this is not one where you start construction on Friday.”