A 6½-story car vending machine structure will not tower over Short Pump anytime soon.
National used-car retailer Carvana has withdrawn its request to build a 71-foot glass-and-steel tower that it calls the world’s first-ever “car vending machine” on land beside Tom Leonard’s Farmers Market along Interstate 64.
A required rezoning and provisional use permit were to be considered at last night’s meeting of the Henrico County Planning Commission, but in a letter to the county dated Dec. 6, Carvana said it was withdrawing the requests due to an inability to secure a deal for the property.
The upstart company’s tower would have been within a mile of incumbent used-car giant CarMax’s original location on West Broad Street, on the opposite side of the I-64 interchange.
In the letter to county planning director Joe Emerson, Bret Sassenberg, senior director of real estate and development for Carvana, said: “We are disappointed that we couldn’t make the real estate deal work on this site in Short Pump.”
“That said, the enthusiasm we continue to see from customers in the Greater Richmond area for a whole new way to buy a car has us excitedly looking for another site that will work for everyone involved.”
Reached Thursday, Sassenberg said the deal was stymied by disagreement among members of a property owners association for Tom Leonard Drive. That group, called the Brookriver Association, consists of owners of about 10 properties along Tom Leonard Drive, including the Candlewood Suites Hotel adjacent to the site and the Pier 1 retail center closer to Broad Street.
Owners of those properties had emailed the county expressing concerns with the proposed project, which would have built an 8,200-square-foot “auto fulfillment center” for the national retailer, which offers shop-at-home car buying without needing to visit a dealership. Customers could elect to pick up their purchases at the center instead of having them delivered.
Sassenberg said agreement from neighboring property owners couldn’t be reached by Tom Leonard, who formed the association and owns the property through an entity called G3 Investments LLC, which purchased the 6.2-acre farmers market property in 2002 for $1.5 million. The Carvana facility would have been built on a 1.3-acre portion of that property.
“There were members of the association that felt that it was being rushed, so they couldn’t get to a vote on the use, which would be part of their association obligations and rights,” Sassenberg said. “We need to find a site that we can move on quicker. Unfortunately, Mr. Leonard couldn’t come back with the vote.”
The land was under contract to be purchased contingent on the requested zoning and permit approvals. The deal was being brokered by Cushman & Wakefield | Thalhimer, which leases a building nearby on West Broad Street as its corporate headquarters.
Thalhimer CEO Lee Warfield said his firm became involved through a relationship between Carvana and another Cushman & Wakefield affiliate that had worked with the company in another state. He said the property was identified as a potential site and they approached Leonard with an offer to buy the parcel.
Leonard said he wasn’t looking to sell off part of his property but welcomed the offer because it would help him afford a planned expansion to his market.
“They offered us a lot of money for it, I wanted to make the store bigger, so it was a perfect idea to take the money from the sale of the property over there and just put it into the expansion of the business,” Leonard said.
“I think there are some people who are concerned about a car dealership going in there. They were still working on changing their minds,” he said. “The covenants there don’t allow a car dealership on that piece of property, so they have to get the hotel, Thalhimer, other people to not complain about it.”
Leonard said Thalhimer was among those who had concerns with the project, which he said he found odd considering it was brokering the deal.
“Thalhimer approached us, and Thalhimer was one of the people who, from what I had heard, had a problem with it,” he said. “I have no idea how that works. I don’t know how a person can get a realtor to get a big commission on a piece of commercial property and sell it and then turn around and complain that they’re building it.”
Warfield said his firm never took a position on the project because it doesn’t own any property in the area. He noted that Thalhimer leases its building, which is near the proposed site, from an entity called 11100 West Broad Street LC, which purchased the former S&K Famous Brands building in 2009 in a multi-parcel sale that totaled $5.8 million, according to county property records.
“We’ve made that clear to many people, including Henrico County: we have no dog in that fight and certainly welcome anybody’s right to apply for rezoning,” Warfield said. “We’re not taking any position in that.
“I think people mistakenly assume that Thalhimer owns that property, which is way over on the other side of that area but still in that same block. We clearly and openly took no position in that matter at all,” he said.
The registered agent for the LC that owns the Thalhimer property is Mark Slusher, senior vice president of Thalhimer Realty Partners – Thalhimer’s real estate investment and development arm.
Slusher stressed that he does not represent Thalhimer as the managing member of that entity, which Warfield described as consisting of “a lot” of individuals. Slusher said he had no comment on the Carvana deal.
“In this particular case, I have nothing to do with Thalhimer, the company,” Slusher said.
The deal was being brokered by Thalhimer broker Connie Nielsen, who said she was sorry to see the deal fall through.
“They wanted to be in Short Pump like a lot of retailers and had just identified that site,” she said, adding that she’s still representing Carvana in its local search.
“I’m disappointed,” she said. “I think they’re a really cool concept.”
Carvana was also represented locally by Andy Condlin, a real estate attorney with Roth Doner Jackson Gibbons Condlin. He referred questions to the company.
While Cushman & Wakefield | Thalhimer represented Carvana in its negotiations, the company has also represented CarMax in many of its real estate deals, such as its recent lease in the Lady Byrd Hat building downtown for an innovation research center.
Asked if Thalhimer’s relationship with CarMax created any loyalty issue with Carvana, Warfield said no.
“We would never do that,” the CEO said.
A spokesperson for CarMax said the company did not have any information to share for this story.
Leonard said he formed the property owners association in part to help maintain and oversee Tom Leonard Drive, which he said has become more trafficked as the area has developed. He noted that Thalhimer is not a member of the association but has been a good neighbor and pitched in on improvements to the road’s entrance off Broad Street.
As such, he said Thalhimer – Slusher, specifically – has attended association meetings, though he stressed that the company is not a voting member.
“Thalhimer doesn’t have anything to do with the Brookriver Association. They’re not even on the road,” Leonard said. “But they’ve been very generous, they’re a first-class company, and they’ve helped us with the entrance of Tom Leonard Drive, so we’re delighted to have them come to our meetings, because they have so much real estate, they have so many good ideas.
“All our concerns on Tom Leonard Drive are done in a way that, long after this Carvana thing goes whichever way it goes, everybody here on the street is happy. That’s my main concern,” he said.
Sassenberg said Carvana continues to search for new sites up and down the eastern seaboard. He said the Richmond market remains a priority for the company, which entered the market in June and maintains a distribution space at an undisclosed location in Petersburg.
“We have a lot of satisfied customers there, so we’re amped to get back into that market with a site,” Sassenberg said. “We’ll be back. We’ve just got to find land that we can close on.”