With a funding assist from the state that helped it buy back the property, the City of Petersburg is commencing with the demolition of the old Ramada Inn building along Interstate 95 in hopes of positioning the site for redevelopment.
Swinging golden sledgehammers in a ceremony Monday, city and state officials marked the start of a four-month process to raze the blighted building, which at nine stories in height is highly visible along the interstate and has become more of an eyesore than it was seven years ago when plans were announced for a $20 million rehab.
Monday’s ceremony also bookended a yearlong legal fight with developer Chris Harrison, whose C.A. Harrison Cos. was behind the project that never got off the ground amid lawsuits with contractors and disagreements with the city.
In late June, a pair of lawsuits against Harrison were dismissed after a settlement was reached to sell the property back to the city for $1.25 million – $500,000 more than Harrison paid for it in 2018.
The settlement was accomplished through a $2.6 million state budget amendment sponsored by Sen. Joe Morrissey and Del. Kim Taylor, who took part in the ceremony.
The funds, allocated through the Virginia Department of Housing and Community Development (DHCD), also are covering the demolition cost, which Petersburg Mayor Sam Parham put at about $600,000. Leftover funds would be used to prep the site for future development, Parham said.
“This is a day that we have been waiting for for years here,” Parham said at the start of the ceremony. “Our priority from day one has been taking this Ramada down.”
Describing the site as a gateway to the city, Parham later added, “This land is seen from everybody coming from (interstates) 85, 95. It all converges right here. So, we look forward to putting a solid development here. We don’t want it to lay here idle.”
While the site will be turned into a greenfield initially, Parham said the goal is to see the site redeveloped — preferably with another hotel. He said the city has fielded inquiries from a half dozen developers interested in the site, particularly in light of the city’s bid for a regional casino.
While the 2.3-acre site at 380 E. Washington St. is considered too small to host the casino, Parham said it could support it by providing more lodging in the city.
“We’ve always wanted to have a hotel here. One of the big problems that we have is we have a lot of development that’s going on, a lot of contractors coming in, a lot of businesspeople coming in to the pharmaceutical plants, and we don’t have anywhere in the city for them to stay,” Parham said. “We’re tired of sending people outside the city.”
To that end, Parham said the city is receiving further assistance from DHCD and Gov. Glenn Youngkin’s office to see the site’s redevelopment through.
“The state and Gov. Youngkin’s staff are making sure that we get a developer that can deliver on a development, so we won’t get another one of these in the city of Petersburg again in which the developer doesn’t have the resources,” Parham said. “It’s huge having that type of partnership.”
“Partnership” was the word of the day in Petersburg, as Youngkin, Parham and others held an event Monday morning to announce the launch of Partnership for Petersburg, a coalition of state, city, and community and faith leaders who signed commitments to more than 40 initiatives aimed at making Petersburg “one of the best cities to live, work and raise a family.”
At the ceremony that followed, Parham described the demolition of the blighted hotel as the first step in that larger process.
“This is the beginning right here, getting rid of this eyesore,” he said. “We have so much development in the works for Petersburg. We don’t know how much we’ve lost by having this here. So, just getting this out of the way and moving forward, to show people that there is a ton of other development going on throughout the city, and that this is not part of our identity.”
Demolition Services Inc. out of Culpeper is performing the demolition after winning a competitive bid put out by the city. Officials said work is expected to start in a couple weeks and wrap up before Christmas.
After the ceremony, Parham said the settlement with Harrison to buy back the property saves the city in legal costs to fight the lawsuits. He said the settlement was reached in light of the state funds becoming available, and that Harrison was amenable to avoiding the lawsuits in light of other litigation he’s facing involving his Model Tobacco project in South Richmond.
“We said, ‘Chris, this looks bad. You don’t want to be in court.’ He said he was ready to get out of it,” Parham told BizSense. “The challenge has always been that I didn’t want to use city resources to (buy back the property) when we have other priorities we need to pay for.”
The Model Tobacco lawsuit, from two of Harrison’s investors on that project, continues to play out in federal court. The apartments conversion of the former tobacco complex on Route 1 finished its first phase earlier this year.