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Fries hears mill site development ideas

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By Ben Bomberger, Reporter

FRIES — More than 30 people attended an exclusive preview Thursday of potential development plans for the old Washington Mills site in Fries. Unfortunately, most attendees were citizens rather than developers.

The presentation of a master plan for the 13.3-acre site was by Craig Wilson, vice president of K.W. Poore & Associates of Richmond.

Several Twin County businesses had representatives at the meeting: Cassell Real Estate, G-Bee’s Construction, Dixon Construction and Cannaday Properties. Representatives from outside the Twin Counties included Weststar Investments of Wytheville and other North Carolina residents who listed no business.

A market study for the site estimated 9.2 million people and 314,000 college students are within a 150-mile radius. The radius includes Charlotte, Greensboro, Winston-Salem and most of Raleigh in North Carolina.

Wilson said Fries has already approved a conceptual plan for development of a hotel, restaurant, retail and outdoor recreational facilities.

“That part is already there,” Wilson said.

Land would be available for a low-cost lease and eventual purchase. Public water and sewer service will be available.

“Not many sites on the New River have public water and sewage,” Wilson said.

Other opportunities include approximately $800,000 in state grant funds available for site work and utility improvements, new market tax credit incentives and eligibility for the Rural Development business and industry loan guarantee program.

Regional Economy

Potential support exists through the 100,000 people who visit music events in the area each year, Wilson said in citing the firm’s market study.

Add in an estimated 125,000-plus people who come for other events, and the number quickly nears a quarter-million possible customers.

More than a million people visit the New River Trail State Park throughout its 58-mile stretch, increasing the number of potential visitors even more.

“The Twin Counties is becoming an example of how to rebuild an economy that has suffered from the loss of textile industries. With all the regional efforts, you all are away ahead of a lot of regions.”

In order to attract people, Wilson said, the area needs to market the development based on assets that will remain forever.

“You can’t move the mountains to China. They’re here.”

Wilson also talked about the possibility of drawing people from The Crooked Road and 'Round The Mountain.

Numbers showed that more than 230,000 tourists visited sites affiliated with The Crooked Road in 2008.

“Developers, that’s room rented… meals sold!”

Add in the 130,000 visitors each to Grayson Highlands and the Virginia Creeper Tail, and it’s easy to see the possibility of a large development succeeding, he said.

“Just capturing a percent of that market makes a huge impact. College students love that water activity… there are a lot of young folks living in this [150-mile radius].”

Another positive is the regional Wired Road broadband initiative, Wilson said. It is attractive to business leaders who want to get away from larger cities and still have technology and amenities in the mountains of Southwest Virginia.

”These businessmen can have the same infrastructure here in Fries!”

Concept

The basic design remains the same as the town’s master plan, with the exception of placing the fire department on the 13.3 acre site.

After engineers looked over the site, the original area that was planned for a hotel would thought not be feasible, so things were moved around just a bit, Wilson said.

For example, the spot for the hotel has been shifted over and designed somewhat different.

“This wouldn’t be your typical Hampton Inn,” Wilson said of the proposed design for a hotel. “This would be something with an outdoor feel. Something that uses the views of the river.”

Wilson added that banks won’t finance a hotel unless it’s a franchise of an established chain, but that even if it were a Holiday Inn or such, it wouldn’t have the traditional look of one.

Included in the concept are a restaurant and retail facilities; amphitheater; outdoor recreation/adventure facilities; public access to the New River for fishing, canoeing, kayaking and rafting; and a connection to New River Trail activities and adequate parking.

The site would have three tiers, with the hotel at the top , restaurant and retail on the middle and outdoor features along the bottom level.

 

The Hotel

It’s proposed that the outdoor-oriented destination hotel would fit the uniqueness of the site and reflect the charm and culture of the area.

The firm put together estimates for an 80-room hotel that would feature all rooms with views of the river.

Amenities would be typical of a “mid-scale” hotel — such as a breakfast area, indoor pool, fitness room, small meeting room, and conference center and performance space that could seat 100-200 people. Wilson estimated cost of construction at around $7.6 million.

“That’s with all the extras. If the hotel was built without those extras, it could be around $6 million.”

A financial study showed a prospective investor could expect a 12 percent annual return on its $1.9 million equity.

Cash flow after financing for staffing and operating the hotel would be approximately $860,000. (The numbers were based on annual occupancy of 64 percent for rooms costing $70-$90.)

Restaurant/Retail

The second part to the large-scale concept is a building with a restaurant and retail space.

Wilson said an outdoor sports-oriented setting would be about 5,000 square feet and hold 80-100 people, and would take full advantage of the views of the New River. The related market potential is just shy of $1.2 million, according to the market study.

Construction cost for the restaurant plus a share of overall parking was estimated at $850,000. The market study estimated an 11.8 percent return on a developer’s $25,130 investment.

The other end of the building would have 7,000 square feet consisting of 5,000 square feet of retail space and 2,000 square feet of back room or storage space.

With estimated cost of $1.1 million, a 13.2 percent annual return could be expected on a retail location.

Outdoor Recreation, Adventure Tourism

The site has potential for various smaller businesses such as:

• Climbing wall and equipment large enough to accommodate eight climbers — $73,000.

• Mountain and trail bikes, a fleet of 100 bicycles and mountain bike course — $45,000.

• Canoes, kayaks and rafts, a fleet of 90 various vessels and equipment — $88,000.

• Shuttle service vans and trailers, four 15-passenger vans and four trailers — $138,000.

• Adventure school, a building of 7,600 square feet and parking for 100 cars — $1.44 million.

• Amphitheater large enough to accommodate 400-600, plus a small stage — $300,000.

• Artificial watercourse, an approximate 1,000-foot whitewater run — $6 million.

The entire package would cost about $8 million, Wilson said, but an investor could expect a cash flow after financing for staffing and operating facilities of approximately $1.8 million.

Request For Proposals

Development will take place in three phases, with the first beginning immediately after the March 31 deadline for requests for proposals.

When proposals are received, each would be reviewed and ranked as to how it fits in with the town’s plan. Proposals including development of more of the site will be ranked higher.

Ranking will be determined by the number of items the developer plans to build.

For instance, a developer planning to build the hotel, restaurant, retail and other features will be given a higher ranking than one building only the restaurant.

Once a developer is selected, the next phase will begin — exclusive negotiating.

During an estimated at three to six months, the developer will have additional time to research funding and details to have everything in place to proceed.

A third phase of disposition and development agreement would follow, during which fine details would be worked out. Details include lease agreements, as well as eventual purchase agreements. (The land will not be sold originally in order to keep developers from doing other things on the property that don’t fit the town’s plan.)

Questions

Fries citizen James Harris questioned how much of the actual selection process would be available to the public.

Galax Assistant City Manager Keith Barker expressed that much of the process would originally be in closed session, but would later be open for public review.

“This isn’t a bid process,” Barker said. “It’s a different process. We’ll comply with all state laws.”

Fries Town Council Member Lynwood Matherly asked if partial proposals would be accepted, such as one solely for the restaurant.

Wilson said the hope is that one developer would take on the entire project. While that may be out of the question, priority would be given to any developer planning to complete more features.

“Priority is given to the hotel,” Wilson said. “If someone says they want to build a $7.8 million hotel, that will be accepted. The one that comes with the most complete…with the most concepts, will be scored higher.”

Fries resident Tom Guy questioned if the land had been partitioned to allow developments only on certain portions.

He worried that someone may want to build a restaurant, but do so on the “prime” location set aside for the hotel.

Wilson said emphasis has been placed on keeping the plan developed as it’s laid out, and in hopes that one developer will take it all on.

“If that doesn’t work, we’ll drop back, punt and do it again,” he said.

Guy added that he would put a restaurant on the site if he had the money.

“I bet a really nice restaurant overlooking the river would draw people in [from] 30 to 40 miles away,” he said. “If you get someone in there willing to spend $1.5 million, don’t throw it away.”

Grayson Supervisors’ Chairman Mike Maynard said he had no problem being a matchmaker to ensure the project was complete: “We’d love to have this thing completed from A to Z by one developer. But it won’t kill me if we have a dozen or so investors together.”

Once proposals come in, Maynard said, potential developers could be paired up to submit the plan as a whole.

One citizen questioned how Fries would be represented on the panel of people overseeing the proposals and discussions with developers.

Wilson said that Fries Mayor Mike Spears, Town Manager Brian Reed and Town Council Member Marie Isom would all be included.

“We have to comply with the town’s master plan,” said Barker. “If any changes are made, we have to come back to the town council and it becomes public forum again.”

Cell Tower Brought Up

It wouldn’t be a meeting about Fries without mention of the US Cellular tower along the New River that has prompted ongoing debate.

Harris — a key opponent to the tower’s location — read a prepared statement at Thursday’s meeting at Crossroads Institute.

Harris provided a background of other projects that almost took place but were stopped by local people.

“The proposed project —which I fully support — has a decreased chance for success because local government has not protected its assets,” he said.

Harris said that by setting a high standard of no less than three successful projects, the proposal process would attract only “sophisticated entities.”

He added that because only a small amount of “free money” is available, the entities are expected to take on essentially all the short- and long-term business risk.

“Because the [proposals require] a minimum investment of $6 million during these challenging times, only the upper crust of sophisticated entities need apply,” Harris continued.

He asked if those in charge of marketing the project had taken into consideration that the town has no control of the ridge where the tower is and the river that are focal points of the project.

He questioned what the town would do if other cellular companies such as Verizon, Alltel or AT&T decided to “join the party.”

“For what it’s worth, the current tower can serve no more than 3 percent of the potential visitor population because neither the major carriers nor the no-contract companies roam on the local US Cellular network,” Harris said. “Further, US Cellular had originally offered to place the tower below the tree line, but wisdom was absent in Independence.”

Matherly questioned Harris on who his provider was, to which he replied, Verizon.

“It doesn’t have to be there,” Harris said of the tower. “But it’s there.”

Maynard stepped in and noted that the meeting wasn’t planned to talk about the cell tower.

Harris asked if his questions would receive an answer.

Maynard said if he was provided with a copy of the questions, he would be glad to send a written response.

DEVELOPMENT PROPOSALS

Proposals for the Fries-Washington Mills site redevelopment project are being accepted through March 31.

The deadline may be extended, depending on interest in the project.

A copy of the documents can be viewed online at:

KWPoore.com/Services/ed-fries.html.