The 5.75-acre site straddles the city-county line. (Mike Platania photo)
A public utility technicality along the Richmond-Henrico County line has forced a developer to scrap its plans for a sizable apartment project just west of Scott’s Addition.
Phoenix-based Alliance Residential Co. is no longer in negotiations to buy the 5.75-acre site at 4400 W. Broad St., where it had planned to build the 340-unit Broadstone West Broad.
Mark Motley, whose Motleys Asset Disposition Group owns the site and was the would-be seller, confirmed this week that the deal had fallen apart.
While about 5 of the site’s 5.75 acres are in Henrico, Motley said Alliance had planned to connect the apartment complex to Richmond water and sewer lines, which service the property.
But county records show that Henrico’s Department of Public Utilities, in a July 2022 letter to Alliance and its development team, said it would need to use county utilities, which would need to be extended to the site and would have come at an increased cost to the developer.
“With well over 80 percent of the development site and 95 percent of the building located within Henrico County, the development needs to connect to Henrico County Water and Sewer systems,” the July letter from Henrico’s DPU reads.
Mark Motley
“We were protesting that, needless to say,” Motley said of the county’s stance. “It was a surprise to us that that was going to be a requirement, right up until about 45 days before the due-diligence period was ending. Once that came to light, it messed the deal up for (Alliance).”
When new developments are proposed to straddle city-county lines, the municipalities usually negotiate which side provides utility access. Typically the municipality that houses the majority of the project’s land is the one that gets to provide utility access.
In the end the matter couldn’t be resolved and Alliance pulled out of the deal. Broadstone West Broad would have been Alliance’s first project in the Richmond region, spanning two buildings of four and five stories.
Though the issue scared off Alliance, Motley said his firm continues to market the site for sale and is actively showing it to other developers. He said if the utility issue rears its head again, at least he and prospective buyers would be able to anticipate it.
“It’s just something that needs to be considered when the offer is made. I don’t think that was considered last time,” Motley said. “It’s still 5.7 acres. There are not a lot of 5.7-acre tracts lying around Broad Street.”
Even without the Alliance project, nearly 1,700 new apartments are planned or under construction in the Westwood area.
The most recent and largest project to come to light in the area is the Ukrop family’s planned redevelopment of its 20-acre office headquarters for Ukrop’s Homestyle Foods at 2000 Westmoreland St. The mixed-use redevelopment could see hotel, retail, office and restaurant uses rise, as well as up to 1,000 apartments.
Local developers Spy Rock Real Estate Group and Fulton Hill Properties are each planning a 250-unit project in the Westwood area, and a mystery developer is looking to replace aging office buildings at 4601-4625 W. Broad St. with a 7-story apartment project.
The full scope of what’s in the pipeline for the Westwood area can be seen using BizSense’s Development Tracker map for the area.
The 5.75-acre site straddles the city-county line. (Mike Platania photo)
A public utility technicality along the Richmond-Henrico County line has forced a developer to scrap its plans for a sizable apartment project just west of Scott’s Addition.
Phoenix-based Alliance Residential Co. is no longer in negotiations to buy the 5.75-acre site at 4400 W. Broad St., where it had planned to build the 340-unit Broadstone West Broad.
Mark Motley, whose Motleys Asset Disposition Group owns the site and was the would-be seller, confirmed this week that the deal had fallen apart.
While about 5 of the site’s 5.75 acres are in Henrico, Motley said Alliance had planned to connect the apartment complex to Richmond water and sewer lines, which service the property.
But county records show that Henrico’s Department of Public Utilities, in a July 2022 letter to Alliance and its development team, said it would need to use county utilities, which would need to be extended to the site and would have come at an increased cost to the developer.
“With well over 80 percent of the development site and 95 percent of the building located within Henrico County, the development needs to connect to Henrico County Water and Sewer systems,” the July letter from Henrico’s DPU reads.
Mark Motley
“We were protesting that, needless to say,” Motley said of the county’s stance. “It was a surprise to us that that was going to be a requirement, right up until about 45 days before the due-diligence period was ending. Once that came to light, it messed the deal up for (Alliance).”
When new developments are proposed to straddle city-county lines, the municipalities usually negotiate which side provides utility access. Typically the municipality that houses the majority of the project’s land is the one that gets to provide utility access.
In the end the matter couldn’t be resolved and Alliance pulled out of the deal. Broadstone West Broad would have been Alliance’s first project in the Richmond region, spanning two buildings of four and five stories.
Though the issue scared off Alliance, Motley said his firm continues to market the site for sale and is actively showing it to other developers. He said if the utility issue rears its head again, at least he and prospective buyers would be able to anticipate it.
“It’s just something that needs to be considered when the offer is made. I don’t think that was considered last time,” Motley said. “It’s still 5.7 acres. There are not a lot of 5.7-acre tracts lying around Broad Street.”
Even without the Alliance project, nearly 1,700 new apartments are planned or under construction in the Westwood area.
The most recent and largest project to come to light in the area is the Ukrop family’s planned redevelopment of its 20-acre office headquarters for Ukrop’s Homestyle Foods at 2000 Westmoreland St. The mixed-use redevelopment could see hotel, retail, office and restaurant uses rise, as well as up to 1,000 apartments.
Local developers Spy Rock Real Estate Group and Fulton Hill Properties are each planning a 250-unit project in the Westwood area, and a mystery developer is looking to replace aging office buildings at 4601-4625 W. Broad St. with a 7-story apartment project.
The full scope of what’s in the pipeline for the Westwood area can be seen using BizSense’s Development Tracker map for the area.
Did this fall through due to the expense of connecting to Henrico utilities verses the City?
It appears that it would have been cheaper to connect to Richmond rather than pay to extend the County’s lines. With 95% of the buildings being located in the County, it makes sense for Henrico to make such a requirement. I doubt developers were actually shocked by such a stipulation. They were just trying to save a buck (which I don’t blame them for), but you gotta play by the rules.
I think it mentioned it can be negotiated, meaning it’s not a rule. Agreed, usually the service going to the majority land jurisdiction, but tis seems like a perfect opportunity to let logic prevail and allow the City to service, as it already has utilities available for connection.
Really showcases how silly the independent city/county paradigm is. If Richmond/Henrico was a combined city-county or if Richmond shared jurisdiction and services with the counties like it would in any other state, they might not be having this problem.
Agreed. This is crazy. If you look at the property lines the only way to get utilities to this site from Henrico will involve significant disruption of nearby properties, too. By contrast, all of its traffic and the address will be in the city due to the Broad St frontage.
Spot on, Flora. This absurd independent city/county set-up has been the bane of Virginia cities for more than 150 years. This is a classic example of how this jurisdictional separation can lead to failure. There’s absolutely no reason in this world that the developer should have had to pull the plug on this project. Garbage like this doesn’t happen in places like Charlotte, Nashville, Raleigh, Austin, etc., – where cities and counties aren’t separate entities. Sadly, RVA is the poster child for how/why regional cooperation is a non-starter attempting to operate within the vacuum of the independent city/county model.
Public Utilities should not have monopolies! If it is cheaper to go with the City of Richmond utilities, then they should be allowed to do so. Henrico really screwed the pooch with this one.
💯 !!! on this. Well said. Classic example of cutting off one’s nose to spite one’s face. So the county would rather trade a substantial amount of revenue in property taxes just in order to also glom onto utilities fees. While I don’t fault the county for not wanting to spend to extend water and sewer lines to the property, at the same time the developer should not be forced to use the county utlities on this kind of bi-juristictional development when 1.) the connections to the county system don’t exist and would need to be built, and 2.) the… Read more »
Something that deeply bothers me about this epic SNAFU: the developer is based in Phoenix and this project was their first undertaking in Richmond. Oh my goodness – can we GIVE ourselves any more of a black eye when it comes to being an inviting place for out-of-state developers to come and build??? This is absolutely AWFUL – and a real loss for not just 4400 W. Broad, not just for that small sliver of Westwood (city AND county) – but for the city, the county and metro region as a whole. Had this project gone well and been developed with… Read more »
I would love to see the revenue comparison of County real estate taxes, if the development went forward, versus the lost water and sewer revenue had the County allowed City hookups. Common sense would favor some real estate tax revenue, and zero utility revenue, over zero revenue!
Good riddance. The last thing we need is more overpriced luxury dwellings marketed to people in high cost areas who want to move here and price out the locals.
Why celebrate there being a large, useless and flat piece of land in the middle of the region? Having less apartments doesn’t mean less people move here. It simply means people move further out into the counties and that the apartments we do have cost more to rent.