Multifamily Development in Chesterfield is Outpacing Retail and Office Projects

Posted on Mar 19 2019 - 11:02pm by Lance Edwards

By Tammie Smith (Richmond Time-Dispatch Article —  The priciest unit in newly built The Jane at Moore’s Lake apartments in Chesterfield County was rented before it was completed.

The two-level penthouse unit has a spiral staircase that leads to a loft and walls of windows that look out on one of those infinity pools that look like the pool water’s edge is falling over a cliff. It rents for more than $3,000 a month.

Talk about upscale.

The development, set back from Jefferson Davis Highway just north of state Route 10 in Chester, is about a 20-minute drive south of Richmond.

“This will be the most expensive and the best product that we’ve ever built in the county,” said George Emerson, who is developing the luxury apartments with business partner Phil Roper.

“When we finish this, we will have about $65 million in the ground. … One of the things that’s happening in Chesterfield is that a number of the young people are moving into the city. Chesterfield wants that group of people living here. I think this gives them a very urban feel,” Emerson said.

Similar to the flurry of multifamily apartment complexes being built in the Manchester and Scott’s Addition areas of Richmond, Chesterfield is having a multifamily moment of its own.

A slew of new developments are under construction, or in planning or proposal stages.

Many of the new complexes are clustered on the western end of the county and are part of or adjacent to larger mixed-use developments — Watkins Centre, Westchester Commons, CenterPointe and Magnolia Green, among them.

Developers, planners and real estate professionals say primarily two things are driving the surge in interest and construction — pent-up demand and the relaxation of proffers in 2016.

“The growth there was stunted because of the Great Recession (2007-2009). Now, various parties have realized that there are opportunities out there,” said Brian Glass, a senior vice president for retail with Harrison & Bates, a commercial real estate firm.

“There are a lot of residential rental properties and sales properties going up. Finally, the Westchester Commons shopping area is going to get a boost because it was way out there pioneering before residential. That’s not usually the way it works,” Glass said.

“Rooftops before retail” is how county planners and developers say it. In order for retail to take off, there has to be a critical mass of residential units nearby to feed them shoppers.

Chesterfield is the Richmond region’s largest locality with an estimated 343,599 residents. A county map with projects highlighted easily shows the clusters of activity.

Westchester Commons, which opened a decade ago, is home to a sprawling shopping development at Midlothian Turnpike and state Route 288 with a 16-screen Regal Cinema, Target, JoAnn Fabric and Craft, OfficeMax and numerous other stores and restaurants.

Around Westchester Commons and Watkins Centre, at least three apartment communities are under construction or in development.

One of them, the newly named The Vue At Westchester Commons, formerly referred to as Westchester Apartments, is a 238-unit project going up near the Regal Cinemas movie theater. “We just poured concrete,” Emerson said.

Another nearby is a project from The Rebkee Co., Rob Hargett’s Richmond-based development group. Westchester Commons Apartments is proposed as 250 units and four retail buildings.

“We have our rear land at Westchester under contract to a multifamily developer hoping to do 250 market-rate units. We would develop some more retail as part of that,” Hargett said. The construction is expected to start in November.

“We are going through a special-use permit on the front corner to do a Valvoline. We have a 1.5-acre parcel next to Wawa fronting on Midlothian that we are looking for a medical office user,” Hargett said.

Across Midlothian Turnpike in Watkins Centre, Charlottesville-based Castle Development Partners is proposing a 450-unit apartment complex.

Much of the new development has evolved since Chesterfield Planning Director Andrew G. Gillies joined the county in October 2017 from the position of community services director for a suburb of Dallas.

“Although I wasn’t here when it started, it appears to me that in 2015 the Board of Supervisors started to see development [and the future of Chesterfield] from a little different perspective,” Gillies said.

“They saw a need to change the perception of Chesterfield to something more than just a safe bedroom community. They hired a new county administrator with a new vision for Chesterfield. This new vision was to build upon its strong single-family neighborhood base into a more diversified community. A community with a wider range of housing options, and more local employment and entertainment opportunities,” Gillies said.

For that to happen, the county had to look at its proffer system, Glass said.

In 2016, county supervisors slashed the cash proffer fee assessed on developments to cover such infrastructure as roads needed to support the projects.

“Chesterfield County has been much more cooperative in the last few years with regard to apartment construction. For the longest time, they were very negative on it, and it was very expensive with the proffers to afford to build anything out there that was multifamily. It was prohibitive,” Glass said. “With the relaxation on the proffers, and the economy picking up, and the county being more amenable to apartments, that’s why you see a real spike in the development of apartments.”

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In Chesterfield, multifamily development is outpacing retail and office development by far, but there are some high-dollar retail projects in the works, including a couple of hotels and some health care projects from Bon Secours.

The Summit at Magnolia Green off Hull Street Road is a nearly 1,300-unit senior care community, with some retail space in a village green area. It is part of the sprawling Magnolia Green master-planned residential community that is permitted for more than 3,000 homes.

Summit at Magnolia Green received the needed zoning in December.

“We did some test marketing last year. We have over 2,000 people on an interested list and about 50 on our VIP list that if we were building it today, they’d give us a deposit check,” said Tom Page, general manager of Magnolia Green and a vice president of iStar, a New York-based company that invests in condominium, multifamily and master-planned residential developments in the U.S.

“To build the first neighborhood and all of the off-site stuff we have to do, it’s probably close to $100 million,” Page said. “Half of that will come from equity.”

They are looking for investment partners for that and similar projects iStar is doing or has planned across the country.

In addition, the developers plan to break ground this week on Glenmoor Oaks, a 248-unit apartment complex in Magnolia Green. The apartments are a joint venture of iStar and Schell Brothers builders.

Winterfield Crossing, a $40 million, 25-acre development on Midlothian Turnpike west of Winterfield Road, will have 250 apartments for people age 55 and older and some retail, said Marc Greenberg of Chesterfield-based Blackwood Development Co.

“There are two 8,800-square-foot retail buildings that are under construction on either side of the main entrance of the property. Aldi is starting construction on the furthest west retail pad on Midlothian,” Greenberg said. Starbucks is going into one of the retail buildings.

“We are working with several boutique exercise places. I can’t give you specific names. We think we will have a couple of those uses throughout the two buildings. We have an office service type user we have a [letter of intent] out to. We have several restaurants we have [letters of intent] out to,” Greenberg said.

The project was approved by county supervisors in late 2017. The company’s 25 acres were carved out from a larger development that never happened when the previous project went into bankruptcy. Other developers acquired other parcels in the bankruptcy and have developed town homes and apartments on that land.

Winterfield Crossing, centered around a pond, will have pedestrian pathways with access from nearby communities.

Behind the Charter Colony shopping center where Publix plans to rebuild a store that had been a Martin’s, Crofton Village at Charter Colony town-home development is under construction with leasing underway.

Bruce Milam of commercial real estate brokerage Harrison & Bates said land for apartment development easily outsells land for retail space in Chesterfield. Office development is barely in the picture. Multifamily land, he said, can sell for up to $400,000 an acre. “If you have the right site,” Milam said.

Retail goes for about $300,000 to $350,000 per acre, depending on where it is. “If you are talking about 1 acre and it’s on a corner and there’s a lot of traffic, you might get $1 million for it. The Midlothian area is going to be much better than the Chester area. More money is on the west part of the county.”

Land zoned for office projects might get $150,000 per acre.

In Chester, Emerson and Roper see the Moore’s Lake project as a catalyst for retail and additional development.

“I think in the 60 acres in front of us it will all fill in,” Roper said.

Across Jefferson Davis Highway from Moore’s Lake, for instance, plans call for a Cinema Café dining and theater complex to be built.

Said Emerson, “When you look at the number of jobs being created within 5 miles of this property. You look at the Meadowville Technology Park. Chesterfield Courthouse. Defense General Supply Center, we are right in the middle of that hub.”