Development

One of the prettiest views of the Richmond skyline is as you approach the city from the south along 95.

You can see the skyline of Downtown, the James River, Manchester, Shockoe and Church Hill as well as a host of other areas from the I95 Bridge. It gives you a sense of what Richmond is and where it going.

I was returning from an appointment, coming back up 95 from Chester and something a friend said struck me … a few days prior, we were grabbing a bite to eat and talking about a condo he had recently purchased when he made the remark ‘I sure would feel more comfortable about Richmond if I saw a few more cranes.’

My mind had not really had a chance to properly digest that statement.

What Do Cranes Mean?

Counting cranes was not a way of measuring development I had heard before. He was implying that the number of cranes (or lack thereof) was a way of seeing the development activity within a Metro area. The more cranes you see, the more development must be occurring.

So as I crossed the James River bridge on 95, I decided to count cranes – it did not take long. I could count 2. One was located near the MCV Campus and the other was along the Downtown Expressway near 4th street. I saw no others.

Despite knowing that the development momentum in Downtown Richmond was as strong as it ever had been, the lack of cranes seems to suggest otherwise. Was the development of Richmond lagging behind other Metro areas? Had the market recovery somehow skipped Richmond? Were we about to experience another downturn? Where were the cranes?!?!

Cranes Mean Height

The more I thought, the more I realized that Richmond has never really been a ‘crane town.’  Cranes imply NEW high rise development and the primary path for Richmond is that of RE-development. We RE-develop our buildings in lieu of tearing them down. We adaptively RE-use them and we RE-purpose them. We use the Historic Tax Credit programs to take that which is old and obsolete and bring it back to a new life. We take our warehouses and make them living spaces and turn gas stations into coffee shops. We take car dealerships and convert them into condos and remake call centers into grocery stores.

We are RE-builders as a city and that is a good thing, in my opinion. Redevelopment is greener, more responsible and far more interesting. It is the way we have rebuilt Richmond at a rate far faster than at anytime in our history and will be the reason that Richmond thrives in the coming years – and it does not require cranes.

But We Need to Learn

That said, redevelopment at our current rate will begin to wane as we run out of the supply of historic properties. The rate at which we have repurposed the staggering number of warehouses in our urban core is amazing but will be ending soon as we simply run out of historic building stock.

Warehouse properties which used to be acquired at less than $15/SF are now selling above $40/SF and the number of blighted/abandoned/underutilized properties in Manchester, Shockoe and Scotts Addition are dwindling quickly. Many in the development community have already begun to expand into other cities and towns with historic districts and blighted properties. The tobacco towns of central North Carolina and the smaller towns of SW Virginia as well as the Tidewater area (Suffolk/Norfolk) have seen Richmond’s developers create presences.

While this is understandable, it is also unfortunate in that there is still much to do here.

New Costs More

The next frontier for development in Richmond is not a specific area or neighborhood, it is on the vacant blocks and crumbling surface parking that dot many different places within our city. Currently, incentives strongly encourage developers to redevelop historically and not to build new structures. The cost of ‘building new,’ due to these incentives for renovation of historic properties, is anywhere from 30-50% more expensive when all of the factors are accounted for.

Those who wish to build new structures have a significantly higher cost structure. The rental rates and market values are not high enough to make NEW construction viable in the eyes of lenders. No financing means no cranes.

Its Working, For Now …

So, for now, I am comfortable with only seeing two cranes mostly because I see happy people in places I have not seen them in years. I see more hardhats and dump trucks in neighborhoods where they never used to be and I can’t seem to get to all of the new restaurants that are opening.  I can’t find street parking as easily as I used to and I now see nostalgia overpower fear leading to a reemergence of some of Richmond’s most neglected architectural neighborhoods. The City of Richmond has a positive population trend for the first time in my lifetime and I think that is not just a good thing, but a great one.

Richmond in 2020 and beyond will need cranes and I just hope that those with the power to make a difference understand how they can help us transition to a bigger, better and more balanced Richmond as we move forward.