Carvana scraps plans for $25M Chesterfield facility

A site plan of the project as it was proposed along Woods Edge Road.

Correction: Bermuda District Supervisor Jim Ingle was elected in November and was not on the board when it voted on the project in October. This story has been updated to clarify his comments.

Months after securing approval for the project, a national used-car retailer is pulling the plug on a planned distribution facility near Chester, while still moving forward with one of its signature “car vending machine” towers in Richmond.

Carvana has scrapped its plan for a vehicle inspection and processing center along Woods Edge Road, a $25 million project that was to create hundreds of jobs, and secured state and local incentives when county supervisors approved it last fall.

A Carvana spokeswoman on Monday confirmed the decision, which was communicated to Chesterfield officials late last week. She did not specify what prompted the decision, saying only that it was made after “examination of current business priorities.”

The spokeswoman said Carvana no longer is pursuing an inspection center in Chesterfield. She did not clarify whether the company is searching for other sites elsewhere in the region.

Garrett Hart, Chesterfield’s economic development director, said Carvana informed the county of its decision Thursday “as they assess the need for a maintenance facility in the Richmond market.”

“We are disappointed in this decision, particularly during this time of high unemployment for the loss of the 500 jobs that would have been created by this project,” Hart said in an email, adding that his department already is working with the site’s landowners to position it for other development proposals.

An initial community meeting on the project was held last June. (BizSense file)

Carvana had been under contract to purchase the site, consisting of multiple parcels totaling 183 acres at 13504-15100 Woods Edge Road, along the east side of Interstate 95 just north of Ruffin Mill Road.

Its purchase was contingent on county zoning approvals, which the company secured in October after initially proposing the project last June. The project drew opposition from neighboring property owners, who expressed concerns about noise impacts and truck traffic on area roads.

Controversial project

County supervisors approved the project by a 4-1 vote, with Dale District Supervisor Jim Holland dissenting.

Supervisor Jim Ingle, who was elected after the vote and whose Bermuda District includes the site, said he had mixed feelings about Carvana’s decision to withdraw. While he did not take part in the vote, Ingle attributed the contentiousness surrounding the project to a lower-than-expected showing in that precinct in last fall’s elections.

“Although there were some really good jobs that would come from Carvana, there was also enough controversy that it could have actually cost me the election from people that live there,” Ingle said, adding that he was in favor of deferring the case and did not take a position for or against the project.

Ingle said he was told that an issue with the site factored into Carvana’s decision, as opposed to a slump in sales or the economic downturn. In its latest quarterly earnings report, the company reported a net loss of $183 million, more than twice the loss it reported the same quarter last year.

At the same time, the company reported a 43 percent year-over-year increase in vehicles sold at over 52,000, a 45 percent year-over-year increase in revenue at just over $1 billion, a 56 percent increase in total gross profit at about $138 million, and a 157 percent increase in the number of vehicles purchased directly from customers.

“It is my understanding that they had some issues (with the site) that they decided they could not overcome or did not want to try to overcome, and through that, they chose not to move forward,” Ingle said.

“As far as we know, there’s not another location in Chesterfield or in the surrounding area that is under consideration at this time.”

The project had been awarded a $360,000 grant from the Commonwealth’s Opportunity Fund and was eligible for tax credits for each full-time job created. County supervisors in December approved a matching grant that was to use Technology Zone incentives and other local funds.

One of Carvana’s ‘car vending machine’ towers, as shown in a video.

Car vending machine still a go

Despite the about-face in Chesterfield, Carvana appears to still be moving forward with its planned car vending machine tower on Westwood Avenue in the city.

Fencing now surrounds the former ERNI Electronics building at 2201 Westwood Ave., across Interstate 195 from TopGolf, which Carvana purchased in March for $1.75 million. The company plans to demolish the nearly 40-year-old building and replace it with a 12-tier tower and office space.

The structure would be the company’s first physical storefront in the market. A building permit filed with the city puts the construction cost at $4 million.

Colorado-based Catamount Constructors is the contractor on the project, and North Carolina-based WHN Architects is the designer. S.B. Cox is handling the demolition.

ERNI Electronics had used the building as its U.S. sales headquarters since 2008. The company has since moved its HQ to Chesterfield, at 2400 ERNI Way in Midlothian.

ERNI’s previous location on Westwood Avenue, where Carvana plans to build a car vending machine tower and offices. (BizSense file photo)

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Frank Smith
Frank Smith
10 months ago

Thank you Bizsense for the graphic above. I was able to click on it, and the image actually did become larger. I could see the details – fantastic.

Sam Nelson
Sam Nelson
10 months ago
Reply to  Frank Smith

Yes, a dynamic aerial is always a + when talking CRE.