In late 2019, the owners of Mosaic Catering + Events began their due diligence on 3013 Cutshaw Ave. near West Broad Street.
Their plan was to convert the 9,500-square-foot Art Deco-style warehouse into an event space complete with a rooftop so that Mosaic could finally host its own events. The company, which also has a restaurant of the same name in the River Road Shopping Center, has only catered events at other venues since its founding in 1996.
In late 2020 Mosaic purchased the building for $2.1 million, giving it control of both that building and its headquarters across the street at 3001 Cutshaw Ave.
Steven Niketas, who co-owns Mosaic with Laurette Garlitz and Mike Holland, said the quotes they initially received on the building’s renovation were just shy of $1 million. After holding off on any construction, Niketas said these days they’re being quoted nearly three times that.
“And it’s the same set of plans, man. It’s the same (project),” he said.
Those increased construction costs have prompted the group to reconsider its plans. Earlier this month, Mosaic put the building back on the market for sale for an undisclosed amount. Thalhimer’s Connie Jordan Nielsen has the listing.
Niketas said the prospect of doing the same project for three times the cost that they initially forecasted made them feel like they needed to at least see what type of interest the building would get.
“I hate to say it, but at some point, (developing the event space) might be more than we want to do at our age. Two years ago I wasn’t so gun-shy, I was ready to do just about anything to grow the business. But I guess just like everybody else, I’m not sure I have the stamina I used to after the last two years,” Niketas said.
“What is the real expense of trying to expand? Do I really need another location?” he said. “I’m sure a lot of people are having the same conversations, not just the catering business.”
The building sits on a quarter of an acre and was most recently assessed by the city at $1.8 million. Prior to Mosaic acquiring it, the building was owned by Stony Point Design/Build, a Charlottesville development firm that intended to bring residential density to the site.
Niketas said his group is not dead set on selling the building, and that Mosaic would be willing to go outside its comfort zone to see a project through on the site. Throughout its 26 years in business, Niketas said Mosaic never had any outside equity, management or business partners of any type, but now they’re open to the idea of working with an outside firm on the Cutshaw project.
“At this point, because of the way things have been the last couple years, I’m literally open to any conversations with anybody because it’s going to take a lot of creativity for people to grow their businesses effectively. It’s just gotten to such a crazy place, you have to be open to more things,” Niketas said.
“Just because I don’t want to build an apartment building, doesn’t mean that I can’t be a partner with an equity guy who wants a piece of prime real estate in a hot part of town,” he said.
Niketas is now based in Charleston, South Carolina, where he runs a location of the Giavos family restaurant group’s Stella’s concept. He said the heat of the Richmond real estate market was demonstrated to him with the recent sale of 5609 Patterson Ave., a 7,900-square-foot retail and office building he owned with Mary Kathryn Perkinson of MAK Financial Group.
The building in the Near West End sold last month for $2.8 million, nearly twice its most recent assessed value of $1.5 million.
“That was a big deal. It was a big light bulb,” Niketas said. “I’d never in a million years imagined that Patterson would trade at what it did.”
The Patterson building’s new owner is Stony Point Wealth Management, a local firm that’s unrelated to the Charlottesville development firm that previously owned the Cutshaw property.
This year, Niketas said, Mosaic has been swamped with catering requests and that the restaurant has been busier than ever. However, they’ve had issues filling out their staff.
That issue also contributed to their apprehension about taking on the Cutshaw project: Without a bigger staff, Niketas said hosting events at the new venue would require them to pull back on off-premise events and the revenue those bring.
“The replacement sales thing is the most dangerous part of developing the new venue. We don’t want to replace X number of sales off-site with X number on-site,” Niketas said.
“It has to be new money, it has to be new sales. Otherwise I’m $3 million down the road in development (costs) and in the same spot. This has been a really difficult box to figure my way out of,” he said.
As Mosaic mulls its options, many of the buildings adjacent to them are set to come down. Local developer Steve Leibovic is preparing to raze nearly all the buildings on the block bound by Cutshaw Avenue, Wayne, Sheppard and Grace streets to make way for a mixed-use project.