A $5 million boost in the battle against blight for Richmond neighborhoods. This is a repost of a richmond bizsense article by Amy David .
House flipping is back, and this time local nonprofits want in on the game.
Richmond’s Neighborhood Stabilization Program recently received $5 million, its third infusion of funds from the Virginia Department of Housing and Community Development. The funds will be used to purchase, renovate and ultimately sell deserted and foreclosed properties in the Church Hill, Barton Heights and Highland Park areas
.
Renovations are underway on 20 properties and are expected to be complete within a few months. The upgraded properties will be sold or rented to people with low incomes.
“Our responsibility is to determine which areas have been impacted the most and rehab them to a livable and sellable state,” said Chris Thompson, program manager for the DHCD.
Funds for the stabilization program are made available through the Housing and Economic Recovery Act of 2008. The federal funding has been distributed to states, which have allocated it to localities to award to housing groups. The federal program is designed to reduce the effects on communities caused by the foreclosure crisis.
Many of the DHCD’s community development programs focus only on lower income households, but Thompson said Richmond’s program will cater to middle class households as well.
“The foreclosure crisis is hitting a broader spectrum of society, and [the stabilization program] can provide assistance to a variety of income groups,” Thompson said.
To date, 21 local government and nonprofit organizations have worked with the program to acquire and renovate foreclosed properties and sell them to potential homeowners. Richmond Metropolitan Habitat for Humanity, Bradley Development LLC, Richmond Redevelopment and Housing Authority and Southside Community Development and Housing Corporationare helping with the current renovations.
“We’ve purchased seven homes that have been foreclosed on,” said Dianna Herdon, executive director for Southside Community Development and Housing Corporation.
The community development nonprofit provides home-ownership education and counseling, home repairs and other financial support services to these first-time home buyers.
“We recently just sold our first home, located at 1805 Grove Avenue,” Herdon said.
About 70 homes have been purchased by grant recipients. Statewide, 35 houses have been sold out of 216 that have been renovated. Grantees design their own programs and funding criteria, but they must use at least a quarter of the funds toward the purchase of the property.
Kerry Riley, richmond real estate, one south realty group, house flipping, homes for sale.
Thursday, October 21, 2010
Monday, September 27, 2010
Having First Fridays is a great free advertising tool for new business owners on Broad ST
Here's a re-post of a biz sense posting about three more new tenants to the Arts Corridor on Broad ST. This are is really getting traction as great and affordable retail corridor in the city.
The arts effect September 27, 2010 by Al Harris
A slew of new shops are opening in Richmond’s burgeoning arts district.
The stretch of Broad Street between Belvidere and First streets has been the home to the First Fridays Art Walk for several years, and retail stores are starting to follow in the footsteps of the galleries and restaurants that have helped revitalize the area.
Steady Sounds, a new record store, opened last week at 322 W. Broad St.
Drew Snyder, 32, parted ways with Carytown music store Plan 9 to launch his own business with musician Marty Key.
Snyder said the first week has gone well for the store, which sells new and used vinyl.
“The response has been really good, a lot of people just walking in. We are not really doing any advertising yet, just word of mouth,” Snyder said.
Another new shop to the area is the Spaghetti Project at 321 Brook Road inside the Emerick Flats building. The store, owned by Arlene Munoz and her husband, Edgar, sells collectible vinyl toys, books, clothing and other art.
Munoz opened the shop in Fredericksburg, where she lives, a year ago, and it didn’t quite take off. But now she says she has landed in the perfect spot, right in the middle of an active arts community.
“Everyone we met said, ‘You need to move to Richmond, because VCU is there and there is a lot of art going on,’” she said.
First made popular in Japan, designer vinyl toys are more pieces of art than playthings. Some of the more limited edition figures cost a few hundred bucks.
“I can foresee us doing good here. I met quite a few collectors already who can get their Dunnys here and don’t have to order online,” she said.
Dunny dolls are white vinyl figures that enthusiasts can color to create their own characters.
Also opening in the area is thrift store Books, Bikes and Beyond, which recently moved from its first location on Brookland Parkway to 7 W. Broad St. The nonprofit store sells donated goods to support Books on Wheels, a mobile library and bicycle repair shop.
Owner Sheley Briggs said she looked at about 20 locations before choosing where she is now.
“I liked the way Broad Street felt. Having First Friday brings business without doing advertising,” said Briggs.
She also said the price is right, too.“It is very affordable. The rates are amazing. My advice to anyone is to rent down here,” she said.
Another business has moved into the retail space at 11 E. Grace St., which has been vacant for nine years.Joe Herbi and two partners are running a gaming and Internet lounge called Pay II Play. Herbi said they charge between $5 and $7 an hour for people to come and play all the games they want.
And finally, coming soon to the space vacated by clothing store the Henry Gallery is 212 Tattoo. The tattoo parlor has filed for a business permit to operate at that location.
Kerry Riley, Richmond Real Estate, Downtown Arts Corridor, First Friday Artwalk
The arts effect September 27, 2010 by Al Harris
A slew of new shops are opening in Richmond’s burgeoning arts district.
The stretch of Broad Street between Belvidere and First streets has been the home to the First Fridays Art Walk for several years, and retail stores are starting to follow in the footsteps of the galleries and restaurants that have helped revitalize the area.
Steady Sounds, a new record store, opened last week at 322 W. Broad St.
Drew Snyder, 32, parted ways with Carytown music store Plan 9 to launch his own business with musician Marty Key.
Snyder said the first week has gone well for the store, which sells new and used vinyl.
“The response has been really good, a lot of people just walking in. We are not really doing any advertising yet, just word of mouth,” Snyder said.
Another new shop to the area is the Spaghetti Project at 321 Brook Road inside the Emerick Flats building. The store, owned by Arlene Munoz and her husband, Edgar, sells collectible vinyl toys, books, clothing and other art.
Munoz opened the shop in Fredericksburg, where she lives, a year ago, and it didn’t quite take off. But now she says she has landed in the perfect spot, right in the middle of an active arts community.
“Everyone we met said, ‘You need to move to Richmond, because VCU is there and there is a lot of art going on,’” she said.
First made popular in Japan, designer vinyl toys are more pieces of art than playthings. Some of the more limited edition figures cost a few hundred bucks.
“I can foresee us doing good here. I met quite a few collectors already who can get their Dunnys here and don’t have to order online,” she said.
Dunny dolls are white vinyl figures that enthusiasts can color to create their own characters.
Also opening in the area is thrift store Books, Bikes and Beyond, which recently moved from its first location on Brookland Parkway to 7 W. Broad St. The nonprofit store sells donated goods to support Books on Wheels, a mobile library and bicycle repair shop.
Owner Sheley Briggs said she looked at about 20 locations before choosing where she is now.
“I liked the way Broad Street felt. Having First Friday brings business without doing advertising,” said Briggs.
She also said the price is right, too.“It is very affordable. The rates are amazing. My advice to anyone is to rent down here,” she said.
Another business has moved into the retail space at 11 E. Grace St., which has been vacant for nine years.Joe Herbi and two partners are running a gaming and Internet lounge called Pay II Play. Herbi said they charge between $5 and $7 an hour for people to come and play all the games they want.
And finally, coming soon to the space vacated by clothing store the Henry Gallery is 212 Tattoo. The tattoo parlor has filed for a business permit to operate at that location.
Kerry Riley, Richmond Real Estate, Downtown Arts Corridor, First Friday Artwalk
Tuesday, September 21, 2010
News from meeting at Carillon re: bike ways and trails in City
This is a repost from James River News Hub:
Rethink our streets: Bike, pedestrian & trails commission
Posted on September 20, 2010 by Phil Riggan 3 Comments
It is good to see the city recognising the equity in planning for pedestrians and cyclists and not just for vehicles and public transit.
What I observed Monday night at The Carillon in Byrd Park was a room of nearly 200 people — fit, energetic, enthusiastic people who didn’t want to sit around and talk, they wanted to get work started and get things done.
“Rethink our streets” was a focus – planning our streetscapes so that everyone can use the roadways. The Bike, Pedestrian and Trails workgroup was tasked with creating a policy framework conducive to making Richmond a walkable, bikeable, trail-friendly city through networks of greenways that would safely connect neighborhoods, shopping districts, colleges, the James River, etc. Reworking traffic patterns on key neighborhood connectors like the Martin Luther King, Mayo, Manchester and Robert E. Lee bridges downtown.
City of Richmond trails manager, Nathan Burrell, said that many people may not have the ability or means to commute by vehicle. Developing greenways, “this is empowerment. A city that you would want to live in.” Allowing people to get off the couches and outside and connecting with each other.
Burrell declared that “we are a trail and cycling friendly town” and that Mayor Dwight Jones “moved fairly aggressively with the timeline for trail building and greenways plans.”
Thanks to trail-building groups like Richmond-MORE, many mountain bike trails are in place and have come almost entirely free to the city. The goal is allow that work to continue and to help establish bike-only roadway connections between the parks. There are short-term and long-term plan.
Existing trails: James River Park System trails at Pony Pasture, Buttermilk, North Bank and Belle Isle; Powhite Park; Forest Hill Park; Lombardy Street; Ironbridge Road; and Capital Trail along Dock Street.
Planned for next 1-2 years: Establish East/West major route (following Main and Leigh streets); North/South major route (following Hermitage, Boulevard, Belt and Iron Bridge roads); Major Bike Route Connecting Loop. Build trails at Dogwood Dell, Chapel Island and Bandy Field and a Buttermilk West expansion toward the Powhite Parkway Bridge. Establish greenways from Reedy Creek, Cannon Creek, Gillies Creek. Would also post signage along existing bike paths along Brookland Parkway and Semmes Avenue.
Planned for next 2-5 years: Establishing greenways from Pumphouse, Powhite Creek, James River Branch, Pocosham Creek, Manchester Wall to 22nd Street Tower (Missing Link trail) and creating Crooked Branch Park trails. Virginia Capital Trail is scheduled to be finished. Plans include water taxi in Kanawha Canal from Tredegar to Pumphouse Park.
Recommend policies to promote alternative transportation modes for commuters:
1)Incent employees to use alternate transportation
2)Promote bike racks at offices & public buildings
3)Offer incentives for workplace showers and lockers
4)Incentives for using mass transit
5)Educate employers and citizens on existing tax credits
6)Investigate feasibility of Zip cars and bike share programs
Jennifer Wampler of the Department of Conservation and Recreation said “Richmond is a trail town” and suggested that the money spent on developing plans around physical activity is found to have a better return on investment. Bike and pedestrian trails could have a huge positive impact on tourism, with healthy economic benefits and help change our culture.
There was a proposal to create a full-time bike, pedestrian and trail coordinator position for the City of Richmond who would be responsible for implementing recommendations & coordinating departments. That position would be key as Richmond also plans to connect with the East Coast Greenway, which runs through from Maine to Key West, Fla., and draws people from around the world.
Champe Burnley, president of the Virginia Bicycling Federation, pointed out that “there are so many great parks in the Richmond area.” The two major bike routes (Route 1 and Route 76), that opens up “an incredible opportunity that would run through Richmond.”
While he was speaking, Burnley said that he “hoped that city council would get behind us” in the direction of city councilman Doug Conner of the South Central 9th District, who replied aloud “we’re going to do that.” Conner has already been involved with greenways, helping a rails-to-trails project effort to convert a former CSX railroad bed that runs 2.5 miles between Belt Boulevard and Hopkins Road.
Burnley encouraged the crowd to go to http://bit.ly/RVA-Ped-Bike-Trail-Survey to express their opinions and http://bit.ly/MPOBikePlan for more information.
Reposted by Kerry Riley. Kerry@kerryriley.com. www.kerryriley.com. Riley Real Estate of Richmond.
Rethink our streets: Bike, pedestrian & trails commission
Posted on September 20, 2010 by Phil Riggan 3 Comments
It is good to see the city recognising the equity in planning for pedestrians and cyclists and not just for vehicles and public transit.
What I observed Monday night at The Carillon in Byrd Park was a room of nearly 200 people — fit, energetic, enthusiastic people who didn’t want to sit around and talk, they wanted to get work started and get things done.
“Rethink our streets” was a focus – planning our streetscapes so that everyone can use the roadways. The Bike, Pedestrian and Trails workgroup was tasked with creating a policy framework conducive to making Richmond a walkable, bikeable, trail-friendly city through networks of greenways that would safely connect neighborhoods, shopping districts, colleges, the James River, etc. Reworking traffic patterns on key neighborhood connectors like the Martin Luther King, Mayo, Manchester and Robert E. Lee bridges downtown.
City of Richmond trails manager, Nathan Burrell, said that many people may not have the ability or means to commute by vehicle. Developing greenways, “this is empowerment. A city that you would want to live in.” Allowing people to get off the couches and outside and connecting with each other.
Burrell declared that “we are a trail and cycling friendly town” and that Mayor Dwight Jones “moved fairly aggressively with the timeline for trail building and greenways plans.”
Thanks to trail-building groups like Richmond-MORE, many mountain bike trails are in place and have come almost entirely free to the city. The goal is allow that work to continue and to help establish bike-only roadway connections between the parks. There are short-term and long-term plan.
Existing trails: James River Park System trails at Pony Pasture, Buttermilk, North Bank and Belle Isle; Powhite Park; Forest Hill Park; Lombardy Street; Ironbridge Road; and Capital Trail along Dock Street.
Planned for next 1-2 years: Establish East/West major route (following Main and Leigh streets); North/South major route (following Hermitage, Boulevard, Belt and Iron Bridge roads); Major Bike Route Connecting Loop. Build trails at Dogwood Dell, Chapel Island and Bandy Field and a Buttermilk West expansion toward the Powhite Parkway Bridge. Establish greenways from Reedy Creek, Cannon Creek, Gillies Creek. Would also post signage along existing bike paths along Brookland Parkway and Semmes Avenue.
Planned for next 2-5 years: Establishing greenways from Pumphouse, Powhite Creek, James River Branch, Pocosham Creek, Manchester Wall to 22nd Street Tower (Missing Link trail) and creating Crooked Branch Park trails. Virginia Capital Trail is scheduled to be finished. Plans include water taxi in Kanawha Canal from Tredegar to Pumphouse Park.
Recommend policies to promote alternative transportation modes for commuters:
1)Incent employees to use alternate transportation
2)Promote bike racks at offices & public buildings
3)Offer incentives for workplace showers and lockers
4)Incentives for using mass transit
5)Educate employers and citizens on existing tax credits
6)Investigate feasibility of Zip cars and bike share programs
Jennifer Wampler of the Department of Conservation and Recreation said “Richmond is a trail town” and suggested that the money spent on developing plans around physical activity is found to have a better return on investment. Bike and pedestrian trails could have a huge positive impact on tourism, with healthy economic benefits and help change our culture.
There was a proposal to create a full-time bike, pedestrian and trail coordinator position for the City of Richmond who would be responsible for implementing recommendations & coordinating departments. That position would be key as Richmond also plans to connect with the East Coast Greenway, which runs through from Maine to Key West, Fla., and draws people from around the world.
Champe Burnley, president of the Virginia Bicycling Federation, pointed out that “there are so many great parks in the Richmond area.” The two major bike routes (Route 1 and Route 76), that opens up “an incredible opportunity that would run through Richmond.”
While he was speaking, Burnley said that he “hoped that city council would get behind us” in the direction of city councilman Doug Conner of the South Central 9th District, who replied aloud “we’re going to do that.” Conner has already been involved with greenways, helping a rails-to-trails project effort to convert a former CSX railroad bed that runs 2.5 miles between Belt Boulevard and Hopkins Road.
Burnley encouraged the crowd to go to http://bit.ly/RVA-Ped-Bike-Trail-Survey to express their opinions and http://bit.ly/MPOBikePlan for more information.
Reposted by Kerry Riley. Kerry@kerryriley.com. www.kerryriley.com. Riley Real Estate of Richmond.
Wednesday, September 8, 2010
Student housing amoung one of the growth industries in Richmond along with some suprises
This is a reprint from Richmondbizsense.com's news feed. Since I am so active in real estate in Richmond's Fan district I have experienced first hand the uptick in student housing needs at VCU. I have sold three city apartment buildings in the past month and continue to help others in this growing sector of the market.
Richmond’s fastest growing industries:
September 7, 2010 by Al Harris
The economy may be stuck in a funk, but plenty of Richmonders are finding ways to entice customers with new products or services, especially in these seven industries:
Tattoos:
You don’t need to know the results of a recent study to know that Richmond is a city seeped in ink. Richmond has 14.5 shops per 100,000 people, coming in third in the nation. And it shows. The neon glow of the neighborhood tattoo parlor is a staple of most neighborhoods inside the city. And even stodgy Chesterfield County recently approved the county’s first tattoo parlor.
Pets:
You know you live in a pet friendly city when restaurants have dog bowls outside for passing canines. And Richmond has most definitely gone to the dogs. One of the first to find this rapidly growing niche was Premier Pet Products which started making a special leash decades ago and continues hiring more employees as it expands its line of humane pet products. And then there’s Bully Sticks, a locally-based maker and distributor of dog treats. They’re also hiring. Plus there’s WholesalePets.com distributing inventory to thousands of pet boutiques around the country. And of course, Zoomer Gear selling motorcycle helmets online. Richmond also has eclectic assortment of retail stores, groomers, and daycares that cater to local pet owners as well.
Student Housing:
Students are economic stimulus gold. As VCU expands, so has the need for student housing — and business is a booming. The medical school keeps Shockoe Bottom stocked with renters, and several major projects are underway with hundreds of units coming over the next year or two, mostly in renovated industrial buildings. On the other side of campus Gilbane is constructing a new mid-rise near the new VCU Brandcenter and School of Business building. Two new apartment buildings recently went up on Belvedere south of Main Street.
Local Food:
It seems you can’t go to a restaurant these days without the menu touting the proximity of its ingredients. And Richmonders are eating it up. Several farmers’ markets have cropped up in the last few years and each year get even bigger. They’ve even gone mobile, like Mark Lily’s Farm to Family market which travels around town in a converted school bus. Others like Dominion Harvest and Relay Foods have similar models delivering fresh local food. Still other entrepreneurs, like Backyard Farmer and United States of Food have businesses that are based on bringing customers the most local food possible — the kind you grow in your backyard garden.
Sports:
Richmond is a sports town. Just try to drive through the Fan during the Monument 10K. There is a cottage industry here keeping all those gym rats lean and mean. From solo entrepreneurs who scream, “Give me 20 more pushups” in parks around town, to small, specialized gyms like Fitness Together and CrossFit, to the homegrown big gyms like American Family Fitness, working out is big business. As if that wasn’t enough Chesterfield-based SportsQuest is covering major acreage with artificial turf in the first phase of a proposed sports Mecca. Putting on events is a growth biz, too. SportsBackers has been adding at least one new event for the last few years, and the popularity of its races grows every year. Richmond has plenty for spectators as well such as the Richmond Kickers, River City Rollergirls women’s roller derby, two arena football teams. And don’t forget Flying Squirrels adding minor league baseball at the Diamond. Plus, the University of Richmond finally has an on-campus football stadium, and season ticket sales have doubled to 4,000 in three years.
Specialty Insurance:
It’s obscure, and let’s be honest, not as flashy or fun as an the latest electric car, but Richmond has a huge and growing presence of specialty insurance firms, which write policies for things like medical malpractice for doctors. The newest entrant is Kinsale, (You can read about it here). And earlier this decade one opened here called James River. Plus there are some of the industries big boys Colony, Max Specialty and of course, Markel, which has been expanding by buying companies around the world. And don’t forget Monument Sports, a local firm that sells policies all over the country on sporting facilities like soccer bubbles.
Booze:
Richmond isn’t the drunkest city, thankfully, but booze is a growth industry. We already had Cirrus Vodka distilled on the Southside, and this summer Reservoir Whiskey opened. Plus there is Legend beer, which finally sells six-packs of bottles in local grocery stores. Don’t forget an explosion of wine bars as well. And of course, Governor McDonnell wants to privatize liquor sales, which means that there could be a lot more stores and cheaper prices.
Kerry Riley. Kerry@kerryriley.com. http://www.kerryriley.com/
Richmond’s fastest growing industries:
September 7, 2010 by Al Harris
The economy may be stuck in a funk, but plenty of Richmonders are finding ways to entice customers with new products or services, especially in these seven industries:
Tattoos:
You don’t need to know the results of a recent study to know that Richmond is a city seeped in ink. Richmond has 14.5 shops per 100,000 people, coming in third in the nation. And it shows. The neon glow of the neighborhood tattoo parlor is a staple of most neighborhoods inside the city. And even stodgy Chesterfield County recently approved the county’s first tattoo parlor.
Pets:
You know you live in a pet friendly city when restaurants have dog bowls outside for passing canines. And Richmond has most definitely gone to the dogs. One of the first to find this rapidly growing niche was Premier Pet Products which started making a special leash decades ago and continues hiring more employees as it expands its line of humane pet products. And then there’s Bully Sticks, a locally-based maker and distributor of dog treats. They’re also hiring. Plus there’s WholesalePets.com distributing inventory to thousands of pet boutiques around the country. And of course, Zoomer Gear selling motorcycle helmets online. Richmond also has eclectic assortment of retail stores, groomers, and daycares that cater to local pet owners as well.
Student Housing:
Students are economic stimulus gold. As VCU expands, so has the need for student housing — and business is a booming. The medical school keeps Shockoe Bottom stocked with renters, and several major projects are underway with hundreds of units coming over the next year or two, mostly in renovated industrial buildings. On the other side of campus Gilbane is constructing a new mid-rise near the new VCU Brandcenter and School of Business building. Two new apartment buildings recently went up on Belvedere south of Main Street.
Local Food:
It seems you can’t go to a restaurant these days without the menu touting the proximity of its ingredients. And Richmonders are eating it up. Several farmers’ markets have cropped up in the last few years and each year get even bigger. They’ve even gone mobile, like Mark Lily’s Farm to Family market which travels around town in a converted school bus. Others like Dominion Harvest and Relay Foods have similar models delivering fresh local food. Still other entrepreneurs, like Backyard Farmer and United States of Food have businesses that are based on bringing customers the most local food possible — the kind you grow in your backyard garden.
Sports:
Richmond is a sports town. Just try to drive through the Fan during the Monument 10K. There is a cottage industry here keeping all those gym rats lean and mean. From solo entrepreneurs who scream, “Give me 20 more pushups” in parks around town, to small, specialized gyms like Fitness Together and CrossFit, to the homegrown big gyms like American Family Fitness, working out is big business. As if that wasn’t enough Chesterfield-based SportsQuest is covering major acreage with artificial turf in the first phase of a proposed sports Mecca. Putting on events is a growth biz, too. SportsBackers has been adding at least one new event for the last few years, and the popularity of its races grows every year. Richmond has plenty for spectators as well such as the Richmond Kickers, River City Rollergirls women’s roller derby, two arena football teams. And don’t forget Flying Squirrels adding minor league baseball at the Diamond. Plus, the University of Richmond finally has an on-campus football stadium, and season ticket sales have doubled to 4,000 in three years.
Specialty Insurance:
It’s obscure, and let’s be honest, not as flashy or fun as an the latest electric car, but Richmond has a huge and growing presence of specialty insurance firms, which write policies for things like medical malpractice for doctors. The newest entrant is Kinsale, (You can read about it here). And earlier this decade one opened here called James River. Plus there are some of the industries big boys Colony, Max Specialty and of course, Markel, which has been expanding by buying companies around the world. And don’t forget Monument Sports, a local firm that sells policies all over the country on sporting facilities like soccer bubbles.
Booze:
Richmond isn’t the drunkest city, thankfully, but booze is a growth industry. We already had Cirrus Vodka distilled on the Southside, and this summer Reservoir Whiskey opened. Plus there is Legend beer, which finally sells six-packs of bottles in local grocery stores. Don’t forget an explosion of wine bars as well. And of course, Governor McDonnell wants to privatize liquor sales, which means that there could be a lot more stores and cheaper prices.
Kerry Riley. Kerry@kerryriley.com. http://www.kerryriley.com/
Monday, August 23, 2010
Lots of abandoned homes in Richmond
By Carol Hazard TIMES-DISPATCH STAFF WRITERPublished: August 21, 2010
About 800 properties in the city of Richmond are vacant and uninhabitable.
An additional 800 could be lived in but need work. And 800 other vacant properties are in good condition, said Rachel O. Flynn, director of planning and development for Richmond.
In all, the city is dealing with about 2,400 vacant properties, said Flynn, who spoke yesterday during a presentation at the Federal Reserve Bank of Richmond.
More than 100 city leaders, representatives from nonprofit and civic groups, and real estate agents gathered for the session on "Turning Around Vacant Properties in Greater Richmond."
Neglectful property owners can be cited for blight and be required to submit plans to the city to fix the problems. If they do not improve the properties, the city can take possession through court procedures.
Take, for example, 106½ E. Clay St. The owner refused to comply with code enforcement and would not sell it to the city. The city petitioned the court to have the property condemned and took possession.
The Alliance to Conserve Old Richmond Neighborhoods, a nonprofit housing group, bought the property from the city for $67,459, then sold it contingent upon a development agreement for essentially the same amount to a developer.
The city also can take over properties if taxes are not paid.
The process is lengthy and cumbersome, speakers at yesterday's session said. The event was presented by the Richmond Fed, Virginia Local Initiative Support Corp. and the Partnership for Housing Affordability.
Sometimes owners are cooperative but they have no money to fix their properties or there is no market to sell them. In some cases, the government can intervene with subsidies, Flynn said.
It's important to create neighborhoods that can survive on their own without government subsidies, where private industry sees possibilities and makes investments, she said.
Richmond's problem with blight has escalated since 1949, when trolleys were removed and people became dependent on automobiles. Many abandoned the city for the suburbs.
"This is what it looked like 100 years ago," said Flynn, pointing to a photo of a vibrant downtown with sidewalks teeming with people and a trolley running down the center of Broad Street.
"There is no reason we can't have that today," she said, noting the link between public transit and neighborhood revitalization.
Greg Lukanuski, assistant city attorney, said building codes do a good job of getting property owners motivated to fix dilapidated structures. However, some people do not have the physical, financial or mental wherewithal to deal with the changes.
If the city takes an elderly woman to court for blight, most of the time the family comes to the rescue and corrects the problems, Lukanuski said. Still, it makes for an uncomfortable situation.
Often, the homeowner's sole source of income is Social Security benefits, which gives the person money to cover food, utilities and taxes but not enough for maintenance.
Property owners must be given notice of a violation and time to fix it, before a court summons is issued and the city can move to take over properties, Lukanuski said.
Some slumlords are good at ducking code-enforcement inspectors, he said. They might get lots of notices of violations, but they never go to court because they can't be found, Lukanuski said.
Bonnie Ashley, senior assistant attorney for the city, said a property with taxes that haven't been paid for a year and a half could be taken to public auction in nine or 10 months under the best and fastest scenario.
It's typically a two-year process, but it can take longer, she said.
Take, for example, a 100-year-old house that was maintained by the original owners. Generations of heirs inherit the property, and each person owns a small portion. The problem often is getting someone to step up, pay the taxes and take control, she said.
Re-print to Kerry Riley's blog August 23, 2010
About 800 properties in the city of Richmond are vacant and uninhabitable.
An additional 800 could be lived in but need work. And 800 other vacant properties are in good condition, said Rachel O. Flynn, director of planning and development for Richmond.
In all, the city is dealing with about 2,400 vacant properties, said Flynn, who spoke yesterday during a presentation at the Federal Reserve Bank of Richmond.
More than 100 city leaders, representatives from nonprofit and civic groups, and real estate agents gathered for the session on "Turning Around Vacant Properties in Greater Richmond."
Neglectful property owners can be cited for blight and be required to submit plans to the city to fix the problems. If they do not improve the properties, the city can take possession through court procedures.
Take, for example, 106½ E. Clay St. The owner refused to comply with code enforcement and would not sell it to the city. The city petitioned the court to have the property condemned and took possession.
The Alliance to Conserve Old Richmond Neighborhoods, a nonprofit housing group, bought the property from the city for $67,459, then sold it contingent upon a development agreement for essentially the same amount to a developer.
The city also can take over properties if taxes are not paid.
The process is lengthy and cumbersome, speakers at yesterday's session said. The event was presented by the Richmond Fed, Virginia Local Initiative Support Corp. and the Partnership for Housing Affordability.
Sometimes owners are cooperative but they have no money to fix their properties or there is no market to sell them. In some cases, the government can intervene with subsidies, Flynn said.
It's important to create neighborhoods that can survive on their own without government subsidies, where private industry sees possibilities and makes investments, she said.
Richmond's problem with blight has escalated since 1949, when trolleys were removed and people became dependent on automobiles. Many abandoned the city for the suburbs.
"This is what it looked like 100 years ago," said Flynn, pointing to a photo of a vibrant downtown with sidewalks teeming with people and a trolley running down the center of Broad Street.
"There is no reason we can't have that today," she said, noting the link between public transit and neighborhood revitalization.
Greg Lukanuski, assistant city attorney, said building codes do a good job of getting property owners motivated to fix dilapidated structures. However, some people do not have the physical, financial or mental wherewithal to deal with the changes.
If the city takes an elderly woman to court for blight, most of the time the family comes to the rescue and corrects the problems, Lukanuski said. Still, it makes for an uncomfortable situation.
Often, the homeowner's sole source of income is Social Security benefits, which gives the person money to cover food, utilities and taxes but not enough for maintenance.
Property owners must be given notice of a violation and time to fix it, before a court summons is issued and the city can move to take over properties, Lukanuski said.
Some slumlords are good at ducking code-enforcement inspectors, he said. They might get lots of notices of violations, but they never go to court because they can't be found, Lukanuski said.
Bonnie Ashley, senior assistant attorney for the city, said a property with taxes that haven't been paid for a year and a half could be taken to public auction in nine or 10 months under the best and fastest scenario.
It's typically a two-year process, but it can take longer, she said.
Take, for example, a 100-year-old house that was maintained by the original owners. Generations of heirs inherit the property, and each person owns a small portion. The problem often is getting someone to step up, pay the taxes and take control, she said.
Re-print to Kerry Riley's blog August 23, 2010
Thursday, August 5, 2010
Yikes! Richmond Developer may be headed for the Big House
FBI, IRS raid French office
August 5, 2010 by Aaron Kremer
Officers from the FBI and IRS raided the Shockoe Slip offices of embattled developer Justin French this morning.
The FBI’s Richmond office would not say why, only confirming that agents are there. RBS’s reporter on the scene said law enforcement entered French’s office near 13th and Cary Streets with empty boxes, presumably to gather documents. State troopers were also present.
It may have to do with French’s use of historic tax credits on his developments, which involve converting former industrial buildings into residences and selling federal tax credits to investors.
Several partners who worked with French on various aspects of the historic tax credit deals said they did not know he was under investigation.
French is not at the office.
Stay with RBS for more as this story develops.
August 5, 2010 by Aaron Kremer
Officers from the FBI and IRS raided the Shockoe Slip offices of embattled developer Justin French this morning.
The FBI’s Richmond office would not say why, only confirming that agents are there. RBS’s reporter on the scene said law enforcement entered French’s office near 13th and Cary Streets with empty boxes, presumably to gather documents. State troopers were also present.
It may have to do with French’s use of historic tax credits on his developments, which involve converting former industrial buildings into residences and selling federal tax credits to investors.
Several partners who worked with French on various aspects of the historic tax credit deals said they did not know he was under investigation.
French is not at the office.
Stay with RBS for more as this story develops.
Monday, August 2, 2010
Richmond Real Estate Merry Go Round - Massive Foreclosure of Justin French's empire
This is a re-print of an article in Sunday's Richmond Times Dispatch about local developer Justin French and a massive foreclosure in the works for some prime City of Richmond multi-family properties.
Developer Justin G. French, 39, is in the midst of a battle royal with a giant specialty insurer in Henrico County and five local banks.
By Carol Hazard TIMES-DISPATCH STAFF WRITERPublished: August 01, 2010
Developer Justin G. French went from declaring bankruptcy days after leaving federal prison to dealing in millions of dollars in Richmond properties.During French's 13 years in Richmond, his business associations have included Donald C. Lacey, who pleaded guilty this year to a real estate Ponzi scheme, and some of the area's biggest financial players.
French, 39, is in the midst of a battle royal with a giant specialty insurer in Henrico County and five local banks scrambling to salvage tens of millions of dollars that they lent to him on 14 real estate projects. All the loans are in default.
Last week, Richmond-based Union First Market Bank was granted court permission for a receiver to manage and control six entities involving eight properties and recover $14.2 million in loans guaranteed by French. And Hampton Roads Bankshares Inc. in Norfolk is investigating $19 million that it agreed to lend to French for two unfinished apartment conversions, also in default, in Richmond's Scott's Addition, just west of Boulevard.
French blames his problems on Markel Corp., an insurer and business partner on historic tax credit projects, for withholding $3 million and leading him to the unusual step of asking the banks to foreclose on his own properties. Markel has not responded to repeated calls and e-mails for comment.
French, through several companies, owns more than 100 properties in the city, according to the assessor's office. Most are in the inner-city core, where he has played an important role revitalizing once-decaying neighborhoods."He has been one of the urban pioneers to revitalize Richmond and bring much-needed housing for a variety of citizens from young urban professionals to empty nesters," said Rachel O. Flynn, director of planning and development review for the city.
One of his latest projects is an $11 million conversion of a former Philip Morris USA plant in the Manchester section into 225 residential units. "It's very simple, very tasteful," Flynn said.
But French's tactic of using historic tax credits to offset renovation costs has hit a roadblock.
"We have a substantial number of applications from French that we have been unable to act on because of ongoing questions about the expenses claimed," said Kathleen Kilpatrick, director of the state Department of Historic Resources.
"We look at whether the work has been completed in accordance with appropriate preservation standards. We look at whether the line item is an eligible expenditure. We also look at the expenditures themselves, whether the expense claimed is in line with what we would expect to see."
She declined to say how many of his tax-credit applications are in limbo.
. . .
French says he came to Richmond in 1997.
In 1994, while a student at the George Mason University School of Law, French and another man were charged with conspiracy to possess with intent to distribute cocaine and aiding and abetting the use of firearms in relation to a drug-trafficking crime.
He pleaded guilty in a plea bargain and was sentenced to five years on each of the two counts in 1994.
He was released from federal prison in August 1996.
"On the case you reference 16 years ago, I was set up and entangled in a conspiracy charge," French said. "I regret that I allowed myself to be connected to people the authorities had targeted. But I fully cooperated with authorities, and I am proud of what I have done in life since that mistake."
French filed for bankruptcy protection in U.S. Bankruptcy Court in Richmond two days after his release from prison. Eleven months later, in July 1997, he signed on as a loan officer with Westover Investment Corp. He was attracted there, he said in a filing in Richmond Circuit Court, by the company's promise that it had a good system of referrals for customers. By late winter, he quit.
Westover complained he wouldn't return files and records when it sued for $20,000 and a court order to enforce an employment contract with a noncompete clause. French and the company settled out of court.French stayed in the real estate business, doing hundreds of deals.
In 2003, seven years after filing for bankruptcy, he bought a Georgian mansion in Richmond's West End for $1.8 million. It now is assessed at $2 million.
"I have worked hard, saved and sacrificed to earn everything I have ever owned in life," French said.
French and his wife, Tanya, hosted a benefit in their home, called Westbourne, for the Richmond Symphony in 2005. They reigned as king and queen for the Mardi Gras party, and guests wore beads, masks, crowns and costumes.
He is a former member of the boards of Junior Achievement of Central Virginia and The Faison School for Autism. The website for his business, French Consulting Co., said he is a member of the Kiwanis Club of Richmond, Kinlock Golf Club and The Country Club of Virginia.
His real estate agent was Lacey. French was a business associate with Lacey in limited liability companies, including MJD Properties, and he has ties to another Lacey company, Capital Funding & Consulting in Henrico.Lacey, who will be sentenced Tuesday for his role in the Ponzi scheme, solicited money from investors through Capital Funding & Consulting.
The money was supposed to be used to buy fixer-uppers in Richmond and flip them for a profit. But in most cases, the work never was done, and money was moved from one property to another in a complex money trail.
Lacey no longer is involved in Capital Funding & Consulting. However, the company is a beneficiary of a deed of trust on a property owned by French, according to a lawsuit filed July 15 by Union First Market Bank against entities in the foreclosure process owned by French.
In a lawsuit filed last year, one of Lacey's investors, Allan Mullian, alleges that French was one of several people in addition to Lacey and MJD who guaranteed a $52,000 note.
French has sought to distance himself from Lacey. In a Richmond Circuit Court filing, he said Lacey promised French and French's wife, along with other principals in MJD, that Lacey would indemnify them against any losses or liabilities from the company's dealings.
"I have had no dealings with Lacey, other than being a victim, like so many others," French said.
He said he was in partnerships with Lacey more than five years ago and he guaranteed some old notes.
"I have been successful in restructuring them, and all payments are current," French said. "Many of the properties have sold or are under contract currently. To a large extent, I am one of the only people that have protected the other victims, at great personal expense to myself."
Joel Fine from the Asheville, N.C., area said French has restructured seven of 12 notes that French along with Lacey and others personally guaranteed. French is making monthly payments on those new notes.
"Justin, from the get-go, has never tried to duck his responsibilities," Fine said.
Still, the legal wrangling continues. Two foreclosed properties guaranteed by French were repossessed, but they haven't closed or settled. Three are encumbered with old judgments, and Fine can't get clear titles.
In all, Fine and his family invested $750,000 through Old Dominion Financial Services Inc., a now-defunct company in Henrico that funneled money to companies involving French and Lacey. The Fines discovered they have money in 45 fixer-uppers in Richmond, and they are trying to determine the extent of their losses.
. . .
City tax records show French owns 135 properties, through several limited liability corporations.
Courthouse land records show Lacey sold him four parcels around North Davis and Robinson streets in the Fan District for $1.4 million in 2006. French's Church Hill Properties LC business borrowed $1.7 million on the properties with a note that was to be repaid within six months. On the due date, the mortgage company agreed to accept $410,000 and extend the due date for the balance.
In May 2007, Lacey transferred to French a 45,000-square-foot commercial building at 1700 Summit Ave. through a deed of distribution, usually used to give property to heirs when a will is executed.
At the same time, French arranged a $2 million loan from the Bank of Richmond, using the building as security. Within seven months, he refinanced, taking out a $9.9 million loan on the security of the property, courthouse records show.
Lacey also transferred 207, 209 and 211 E. Main St. to French, through another kind of tax-exempt deed meant for transactions in which no money changes hands. French borrowed $1.8 million from Union First Market, secured by those buildings.
Some Richmonders believe French fell short of his promises in business dealings, though they have failed to make their cases in court.
In August 2006, Greene Co. LLC, which owns an office building at 530 E. Main St., filed suit against French alleging he failed to close on a $4 million contract to purchase the property.
Two days before the final deadline for closing, French said he couldn't do the deal because of fire and building-code problems. Greene said French had been aware of the code problems and that the sales contract was on an as-is basis.
In the end, the two settled. French got back $90,000 of a $200,000 deposit. Greene got the rest.
For the Lupesco family, who owned a high-end fashion clothing store that operated in French's building at 1211 E. Cary St., their landlord seemed to offer a way out of a financial jam. In the summer of 2008, with the economy slumping, they owed 13 suppliers a total of $152,761, the family said in a lawsuit against French.
They talked about a partnership with French for a new store. French would pay the debts and provide space for a new store, paying for design and construction. He would end up with 51 percent of the new venture. The family would have 49 percent, the Lupescos said. But the deal never went through.
French's response was the family thought he had promised to pay the debt, but it actually was a continued and incomplete negotiation of a joint venture. Last year, the family withdrew the suit.
David Garraghty, a Richmond property investor, hoped it would be a simple matter for French to release a right of first refusal he had on some properties that Garraghty wanted to sell in 2007. French wouldn't budge, though his lawyer offered to release the right of refusal if Garraghty would settle another dispute over property. Garraghty sued.
A judge dismissed the case, saying Garraghty hadn't properly invoked the terms of the right-of-refusal agreement, Richmond Circuit Court records show.
. . .
French said he was a partner with Markel on 14 historic tax credit projects. Under state law, 25 percent of eligible expenditures are available for tax credits. Federal credits can be 20 percent of eligible expenditures.
Markel put equity on the table that allowed French to take out the loans and guarantee payments. In return, Markel received an ownership stake in projects and a share of the tax credits.
Now, French is attempting to dissolve the partnership by stopping payments on loans and forcing the foreclosures. He said he wants to renegotiate the loans with the lenders at lower interest rates. Union First Market took the matter to court to wrest control from French.
Andrew Little, an investment banker with John B. Levy & Co., a Richmond-based real estate banking firm, said it is difficult to assess the tactic employed by French without all the background. However, stopping payments on a loan is a legitimate maneuver to force a restructuring.
"This situation is unusual, because it puts pressure on the lender for the purpose of resolving a partnership dispute," Little said. "I can't imagine that many lenders [would] want to cooperate with Mr. French in order to jettison Markel, when Markel is probably the primary reason the lender was involved in the first place.
"What they really need is a creditor's committee to reasonably determine how everyone can get out of this with the least cost possible."
Mark Dwelle, an analyst with RBC Capital Markets in Richmond, said he was surprised to learn that Markel is embroiled in this situation. The insurer is a conservative company with $10.2 billion in assets.
"Markel must have felt there was a specific performance that it was expecting but not getting," Dwelle said. In general, "Markel plays the role of being patient capital with a long-term perspective."
Developer Justin G. French, 39, is in the midst of a battle royal with a giant specialty insurer in Henrico County and five local banks.
By Carol Hazard TIMES-DISPATCH STAFF WRITERPublished: August 01, 2010
Developer Justin G. French went from declaring bankruptcy days after leaving federal prison to dealing in millions of dollars in Richmond properties.During French's 13 years in Richmond, his business associations have included Donald C. Lacey, who pleaded guilty this year to a real estate Ponzi scheme, and some of the area's biggest financial players.
French, 39, is in the midst of a battle royal with a giant specialty insurer in Henrico County and five local banks scrambling to salvage tens of millions of dollars that they lent to him on 14 real estate projects. All the loans are in default.
Last week, Richmond-based Union First Market Bank was granted court permission for a receiver to manage and control six entities involving eight properties and recover $14.2 million in loans guaranteed by French. And Hampton Roads Bankshares Inc. in Norfolk is investigating $19 million that it agreed to lend to French for two unfinished apartment conversions, also in default, in Richmond's Scott's Addition, just west of Boulevard.
French blames his problems on Markel Corp., an insurer and business partner on historic tax credit projects, for withholding $3 million and leading him to the unusual step of asking the banks to foreclose on his own properties. Markel has not responded to repeated calls and e-mails for comment.
French, through several companies, owns more than 100 properties in the city, according to the assessor's office. Most are in the inner-city core, where he has played an important role revitalizing once-decaying neighborhoods."He has been one of the urban pioneers to revitalize Richmond and bring much-needed housing for a variety of citizens from young urban professionals to empty nesters," said Rachel O. Flynn, director of planning and development review for the city.
One of his latest projects is an $11 million conversion of a former Philip Morris USA plant in the Manchester section into 225 residential units. "It's very simple, very tasteful," Flynn said.
But French's tactic of using historic tax credits to offset renovation costs has hit a roadblock.
"We have a substantial number of applications from French that we have been unable to act on because of ongoing questions about the expenses claimed," said Kathleen Kilpatrick, director of the state Department of Historic Resources.
"We look at whether the work has been completed in accordance with appropriate preservation standards. We look at whether the line item is an eligible expenditure. We also look at the expenditures themselves, whether the expense claimed is in line with what we would expect to see."
She declined to say how many of his tax-credit applications are in limbo.
. . .
French says he came to Richmond in 1997.
In 1994, while a student at the George Mason University School of Law, French and another man were charged with conspiracy to possess with intent to distribute cocaine and aiding and abetting the use of firearms in relation to a drug-trafficking crime.
He pleaded guilty in a plea bargain and was sentenced to five years on each of the two counts in 1994.
He was released from federal prison in August 1996.
"On the case you reference 16 years ago, I was set up and entangled in a conspiracy charge," French said. "I regret that I allowed myself to be connected to people the authorities had targeted. But I fully cooperated with authorities, and I am proud of what I have done in life since that mistake."
French filed for bankruptcy protection in U.S. Bankruptcy Court in Richmond two days after his release from prison. Eleven months later, in July 1997, he signed on as a loan officer with Westover Investment Corp. He was attracted there, he said in a filing in Richmond Circuit Court, by the company's promise that it had a good system of referrals for customers. By late winter, he quit.
Westover complained he wouldn't return files and records when it sued for $20,000 and a court order to enforce an employment contract with a noncompete clause. French and the company settled out of court.French stayed in the real estate business, doing hundreds of deals.
In 2003, seven years after filing for bankruptcy, he bought a Georgian mansion in Richmond's West End for $1.8 million. It now is assessed at $2 million.
"I have worked hard, saved and sacrificed to earn everything I have ever owned in life," French said.
French and his wife, Tanya, hosted a benefit in their home, called Westbourne, for the Richmond Symphony in 2005. They reigned as king and queen for the Mardi Gras party, and guests wore beads, masks, crowns and costumes.
He is a former member of the boards of Junior Achievement of Central Virginia and The Faison School for Autism. The website for his business, French Consulting Co., said he is a member of the Kiwanis Club of Richmond, Kinlock Golf Club and The Country Club of Virginia.
His real estate agent was Lacey. French was a business associate with Lacey in limited liability companies, including MJD Properties, and he has ties to another Lacey company, Capital Funding & Consulting in Henrico.Lacey, who will be sentenced Tuesday for his role in the Ponzi scheme, solicited money from investors through Capital Funding & Consulting.
The money was supposed to be used to buy fixer-uppers in Richmond and flip them for a profit. But in most cases, the work never was done, and money was moved from one property to another in a complex money trail.
Lacey no longer is involved in Capital Funding & Consulting. However, the company is a beneficiary of a deed of trust on a property owned by French, according to a lawsuit filed July 15 by Union First Market Bank against entities in the foreclosure process owned by French.
In a lawsuit filed last year, one of Lacey's investors, Allan Mullian, alleges that French was one of several people in addition to Lacey and MJD who guaranteed a $52,000 note.
French has sought to distance himself from Lacey. In a Richmond Circuit Court filing, he said Lacey promised French and French's wife, along with other principals in MJD, that Lacey would indemnify them against any losses or liabilities from the company's dealings.
"I have had no dealings with Lacey, other than being a victim, like so many others," French said.
He said he was in partnerships with Lacey more than five years ago and he guaranteed some old notes.
"I have been successful in restructuring them, and all payments are current," French said. "Many of the properties have sold or are under contract currently. To a large extent, I am one of the only people that have protected the other victims, at great personal expense to myself."
Joel Fine from the Asheville, N.C., area said French has restructured seven of 12 notes that French along with Lacey and others personally guaranteed. French is making monthly payments on those new notes.
"Justin, from the get-go, has never tried to duck his responsibilities," Fine said.
Still, the legal wrangling continues. Two foreclosed properties guaranteed by French were repossessed, but they haven't closed or settled. Three are encumbered with old judgments, and Fine can't get clear titles.
In all, Fine and his family invested $750,000 through Old Dominion Financial Services Inc., a now-defunct company in Henrico that funneled money to companies involving French and Lacey. The Fines discovered they have money in 45 fixer-uppers in Richmond, and they are trying to determine the extent of their losses.
. . .
City tax records show French owns 135 properties, through several limited liability corporations.
Courthouse land records show Lacey sold him four parcels around North Davis and Robinson streets in the Fan District for $1.4 million in 2006. French's Church Hill Properties LC business borrowed $1.7 million on the properties with a note that was to be repaid within six months. On the due date, the mortgage company agreed to accept $410,000 and extend the due date for the balance.
In May 2007, Lacey transferred to French a 45,000-square-foot commercial building at 1700 Summit Ave. through a deed of distribution, usually used to give property to heirs when a will is executed.
At the same time, French arranged a $2 million loan from the Bank of Richmond, using the building as security. Within seven months, he refinanced, taking out a $9.9 million loan on the security of the property, courthouse records show.
Lacey also transferred 207, 209 and 211 E. Main St. to French, through another kind of tax-exempt deed meant for transactions in which no money changes hands. French borrowed $1.8 million from Union First Market, secured by those buildings.
Some Richmonders believe French fell short of his promises in business dealings, though they have failed to make their cases in court.
In August 2006, Greene Co. LLC, which owns an office building at 530 E. Main St., filed suit against French alleging he failed to close on a $4 million contract to purchase the property.
Two days before the final deadline for closing, French said he couldn't do the deal because of fire and building-code problems. Greene said French had been aware of the code problems and that the sales contract was on an as-is basis.
In the end, the two settled. French got back $90,000 of a $200,000 deposit. Greene got the rest.
For the Lupesco family, who owned a high-end fashion clothing store that operated in French's building at 1211 E. Cary St., their landlord seemed to offer a way out of a financial jam. In the summer of 2008, with the economy slumping, they owed 13 suppliers a total of $152,761, the family said in a lawsuit against French.
They talked about a partnership with French for a new store. French would pay the debts and provide space for a new store, paying for design and construction. He would end up with 51 percent of the new venture. The family would have 49 percent, the Lupescos said. But the deal never went through.
French's response was the family thought he had promised to pay the debt, but it actually was a continued and incomplete negotiation of a joint venture. Last year, the family withdrew the suit.
David Garraghty, a Richmond property investor, hoped it would be a simple matter for French to release a right of first refusal he had on some properties that Garraghty wanted to sell in 2007. French wouldn't budge, though his lawyer offered to release the right of refusal if Garraghty would settle another dispute over property. Garraghty sued.
A judge dismissed the case, saying Garraghty hadn't properly invoked the terms of the right-of-refusal agreement, Richmond Circuit Court records show.
. . .
French said he was a partner with Markel on 14 historic tax credit projects. Under state law, 25 percent of eligible expenditures are available for tax credits. Federal credits can be 20 percent of eligible expenditures.
Markel put equity on the table that allowed French to take out the loans and guarantee payments. In return, Markel received an ownership stake in projects and a share of the tax credits.
Now, French is attempting to dissolve the partnership by stopping payments on loans and forcing the foreclosures. He said he wants to renegotiate the loans with the lenders at lower interest rates. Union First Market took the matter to court to wrest control from French.
Andrew Little, an investment banker with John B. Levy & Co., a Richmond-based real estate banking firm, said it is difficult to assess the tactic employed by French without all the background. However, stopping payments on a loan is a legitimate maneuver to force a restructuring.
"This situation is unusual, because it puts pressure on the lender for the purpose of resolving a partnership dispute," Little said. "I can't imagine that many lenders [would] want to cooperate with Mr. French in order to jettison Markel, when Markel is probably the primary reason the lender was involved in the first place.
"What they really need is a creditor's committee to reasonably determine how everyone can get out of this with the least cost possible."
Mark Dwelle, an analyst with RBC Capital Markets in Richmond, said he was surprised to learn that Markel is embroiled in this situation. The insurer is a conservative company with $10.2 billion in assets.
"Markel must have felt there was a specific performance that it was expecting but not getting," Dwelle said. In general, "Markel plays the role of being patient capital with a long-term perspective."
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