Construction firm Katerra’s bankruptcy filing won’t stall apartment projects

Bristol Development’s Lisa Gunderson gives a tour of the under-construction Artistry at Winterfield apartments. (Photos by Jonathan Spiers)

Note: This story has been updated with input from Fortune-Johnson received after publication. 

Two apartment developments on opposite sides of the river will remain active and on schedule despite their general contractor’s recent bankruptcy filing, the developer behind those projects said this week.

Tennessee-based Bristol Development Group said it is continuing on with its Artistry at Winterfield and Tapestry West apartments amid the Chapter 11 filing from Katerra, the construction company it enlisted for both Richmond-area projects.

California-based Katerra made the filing Sunday after it was unable to procure bonding for projects following the insolvency proceedings of former lender Greensill Capital, according to media reports. A statement on Katerra’s website also attributed the filing to industry impacts from the pandemic and unsuccessful attempts to secure additional capital.

The statement said Katerra is proceeding with some projects that remain active in some states, but that many of its projects would be demobilizing.

Its local projects for Bristol fall into the latter category, as David Hanchrow, Bristol’s chief investment officer, said the company “is disappointed in Katerra’s decision to wind down operations” and would continue with its Artistry and Tapestry apartments, which are taking shape in Midlothian and Henrico, respectively.

The Tapestry West apartments along Maywill Street in Henrico.

Hanchrow said Bristol is working with its on-site management teams, subcontractors, suppliers, lender and legal team “to ensure an orderly transition of projects away from Katerra so that both projects are completed on time and without further interruption.”

Attempts to reach Katerra and its bankruptcy attorneys for comment on the situation were unsuccessful Wednesday.

Fortune-Johnson, a Georgia-based contractor that Katerra acquired two years ago, is taking on Katerra’s projects in Richmond after re-establishing as an independent firm in May.

Rachel Hyde, Fortune-Johnson’s business operations supervisor, said contract negotiations remained underway but that the firm would be completing Bristol’s projects in Richmond.

Artistry at Winterfield, a $40 million, 200-unit complex taking shape at Winterfield Place in Midlothian, has been on track to be completed by the end of this summer. Tapestry West, a $50 million, 262-unit project rising beside the Kinsale Capital Group building near West Broad Street and Staples Mill Road, is targeted for completion early next year.

In addition to those projects, Bristol had lined up Katerra to build a third project: a 335-unit complex planned at the former Oak Hill Golf Course at West Creek Business Park in Goochland. Hyde said Fortune-Johnson would be taking on that project, as well.

Tapestry taking shape

Last week, construction crews remained active at Tapestry West, which Bristol describes as its first urban infill-style development in Richmond. The apartments are rising on 2 acres at Maywill and Thalbro streets, beside the Kinsale building that was finished last year.

The Tapestry West apartments are rising beside the Kinsale Capital Group building, visible at left.

The five-story, 200,000-square-foot building will include 196 one-bedroom units ranging in size from 450 to 800 square feet. The remaining 66 units will be two-bedrooms with sizes ranging from 960 to 1,175 square feet.

Monthly rents for the market-rate apartments have yet to be released. Community amenities include a fitness center, clubroom, co-working spaces, a pool, a courtyard, and outdoor grilling and seating areas.

Poole & Poole Architecture designed the apartments, and Timmons Group is the civil engineer.

Artistry finishing up

At Winterfield Place, a mixed-use development straddling the Chesterfield-Powhatan line, Bristol recently completed the first of five buildings that will make up Artistry at Winterfield. The completed building includes a clubhouse and other amenities, and is one of three that will enclose a pool and fitness center.

The Artistry at Winterfield apartments as viewed from Winterfield Road.

The clubhouse includes a lobby and coffee lounge, billiards table, leasing office, and co-working area with phone booths. Other amenities include a package pickup room with cold storage, and a bicycle storage room.

Also designed by Poole & Poole, the apartments are nearly evenly split between one- and two-bedroom floorplans ranging from 675 to 1,265 square feet in size. Monthly rents will range from $1,250 for each of the 102 one-bedroom units, and the 98 two-bedrooms will go for $1,750. Sixteen of the units are above garages, which are open to all residents to rent.

Leasing for Artistry got underway in May.

Gunderson has likened Artistry’s setup to Canopy at Ginter Park, a 301-unit complex that Bristol developed in Richmond’s Northside and later sold to locally based Capital Square. Bristol also developed 2000 West Creek, a 373-unit complex that also sold to Capital Square.

Gunderson said Capital Square, which has been on a buying and developing spree of late, ended up the highest bidder in both of those sales. She said Bristol does not have particular buyers in mind or lined up when it develops a project, stating that doing so wouldn’t be fair to its investors.

On Artistry and Tapestry, Bristol’s lender is Atlantic Union Bank and its legal team is Roth Jackson.

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Mark Slater
Mark Slater
5 months ago

So many of the new apartments being built in the metro area seem to be charging rates that are out of alignment with Richmond salaries. Clearly the demand is there but how are so many people able to afford the high rent prices?