An out-of-state developer had a remarkable plan for a masterfully designed urban living space located in Glen Allen, Va., part of the Richmond metro area. The retail, office and residential project was designed to be one of the largest multi-use developments in the area, but then the worst recession in decades hit. The developers ran into some serious legal and financial problems, and while their intended plan for the development was spot on, the economic climate prevented them from executing the vision.
Before Markel|Eagle Partners stepped in, there were $5.5 million worth of liens and lawsuits filed, loans were in default, and leases had been signed but could not be executed. Residents were frustrated about a community amenity package (including a clubhouse and pool) that had been promised, but the infrastructure had been stalled. One builder was in Chapter 11, and the development saw negative commercial absorption. The relationship with the local government was worsening, and the public had a negative perception of the development, as a result of hearing for months about lawsuits, resident complaints and traffic issues, while not seeing any movement on construction. There were even future residents living in a hotel as they awaited their townhouses to be completed.
“An infusion of cash from a private-equity group into West Broad Village, a troubled multi-use project in western Henrico County, was hailed yesterday by commercial real estate experts and county officials,” Carol Hazard, Richmond Times-Dispatch.
In November 2009, Markel|Eagle Partners took control of the property and provided the influx of capital necessary to get the project moving. Markel|Eagle Partners also cleaned up the legal and financial problems facing the development, including construction liens and it worked with the developer and bankers and crafted a solution where all stakeholders came out in a better place. Markel|Eagle Partners successfully restructured $180 million in prior debt with seven lenders in four countries.
Deputy Henrico County manager for community development Randy Silber said, “The county is pleased with the changes,” in reference to the Markel|Eagle Partners rescue of the West Broad Village development project.
As of January 1, 2012 , the results are remarkable. Since the entrance of Markel|Eagle Partners, approximately 98% of the total 339 apartment units have been leased. More than 225 lots have been sold to two builders. The development also has attracted major national chains such as Whole Foods Market, HomeGoods, Dave & Buster’s, Kona Grill and Recreational Equipment Inc. – all of which established their first Richmond-area locations in West Broad Village. Residents are happy too, with a completed clubhouse that includes a movie theater, pub and exercise room situated alongside a resort-style pool.
The 115-acre, $300 million West Broad Village development is now seeing its plans realized: to be a community of people who live, work, shop and play in the urban setting they call home. Learn more at www.westbroadvillage.com.
“It speaks well of a project that local investors are willing to put money into it,” said Brian Glass, a Senior Vice President at Grubb & Ellis/Harrison & Bates.