The vacant William Street Executive Building is finally being torn down to make way for the long-stalled Liberty Place mixed-use development in downtown Fredericksburg.
Demolition is expected to be completed by April 21, and construction will begin in June on a three-story commercial building and in October on a connected parking garage. They are expected to be ready for occupancy beginning next April. Tenants will include Burger Bach, Mellow Mushroom, Union Bank & Trust, Cary Street Partners, Pasta Fresca and Blue Cow Ice Cream.
City Council on Tuesday approved four measures needed to help facilitate Liberty Place, which is expected to be a nearly $100 million investment in the William Street corridor. Three of the measures cancel agreements made for a previous version of the project covering the block at 607 William St., and the fourth provides new financial incentives to Liberty Place Partners.
“The phrase ‘game changer’ has become a cliché, but I don’t believe it is an exaggeration to say that is exactly what these two projects will be for our downtown city and region, and we can’t wait to see them take shape,” Bill Freehling, the Fredericksburg Department of Economic Development and Tourism’s director, told council members.
Developers Tom and Cathy Wack, along with a group of investors, first proposed the Liberty Place development in 2014. It was to have had 50 residential condominiums, underground parking and an outdoor courtyard lined with restaurants, boutique stores and professional offices.
Liberty Place Partners’ plans went through several iterations before they settled on a version that eliminated the residences and put the parking above ground. A ceremonial groundbreaking for what was to be a $26 million Liberty Place project was held last June to explain the new plans over drinks and ice cream provided by a few of the signed tenants.
Then the project stalled because the Wacks and their partners were unable to get financing.
Freehling urged them to contact William Square LLC, a Vakos Cos. affiliate. It owns the adjacent former Free Lance–Star headquarters property, which has been renamed William Square, as well as the parking lot across William Street, which is used for public parking. William Square LLC doesn’t expect to detail its plans for developing those properties for months, but its potential collaboration with Liberty Place Partners has, from the outset, focused on a parking garage that could accommodate both developers’ needs.
William Street LLC is expected to close April 29 on the purchase of approximately an acre of land at 407 William St. from Liberty Place Partners, and will build the parking garage there. It will be connected by a sky bridge to the roughly 43,000-square-foot commercial building that Liberty Place Partners will build on its remaining 0.42 acres on the William Street side of the property. Liberty Place will have access to 124 spaces in the garage for the office workers and restaurant patrons through a parking agreement with the Vakos affiliate.
“It’s a still very exciting Liberty Place project that will bring new jobs, tax revenue and activity to the entryway of our beautiful historic downtown,” Freehling said.
One of the measures that City Council approved at Tuesday’s meeting repealed a 2017 ordinance that created the Liberty Place Development Project Area and adopted Tax Increment Financing that called for the city to return to Liberty Place Partners 100 percent of the incremental real estate tax revenue from the project for 20 years. The amount was estimated at $240,000 a year, or $4.8 million total with a present value of $3.83 million, assuming no annual increases.
In its place, council members approved a new performance agreement that includes a 10-year incentive worth $375,000 a year ($3.75 million total with a present value of $3.36 million). It will also need to generate at least $400,000 in local tax revenue from the commercial building each year of the agreement in order to receive the annual payment.
“While it’s certainly true that this is a substantial incentive, we believe it’s a good investment for the city to make and one that meets the important ‘but for’ incentive test,” Freehling said. “The Liberty Place property is currently generating approximately $25,000 a year in revenue for the city, and our preliminary projections anticipate about $850,000 in revenue a year coming to the city from the Liberty Place commercial building alone.
“Thus, even with the $375,000 annual payment that is proposed as part of this agreement, the commercial building alone would be generating about $450,000 a year more than the entire property is currently producing for the city. And that’s equal to 1 cent on the city’s real estate tax rate.”
He said the future development of William Square is expected to generate significant additional tax revenue for the city, but told council members that he wasn’t ready to quantify that yet.
In exchange for the incentive, Liberty Place Partners will use parking data analytics to make its spaces available to the public when not required for use by Liberty Place patrons. Freehling said that people who work there will get cards that will allow them to use the parking garage for free, and there will be a validation system for customers at its restaurants and businesses.
“If the public comes in, they’ll get a ticket and pay,” he said. “Essentially, it’s first come, first served.”
City Council also approved a resolution that terminated an earlier deed of easement from Liberty Place Partners for public parking at the garage, and an ordinance ratifying the vacation of a portion of the Amelia Street right of way for the project.
All votes passed 6–1.
Councilman Matt Kelly, who voted against all four measures, said that while he thinks that Liberty Place is a good project, it will not provide free public parking, as the earlier proposal had; uses city money to help bring more restaurants downtown; and marks the first time that City Council has handled a project in this manner, which he thinks is a bad precedent.