New Residential Complex is Planned for Jackson Avenue

Downtown’s last remaining moribund street is coming back to life.

As the rest of downtown has flourished over the past decade, the stretch of Jackson Avenue between Gay Street and Broadway has remained dormant. Attempts to jump-start its revitalization through restoration of its most prominent buildings, the McClung Warehouses, went up in smoke in 2007 when three of those five historic structures mysteriously burned to the ground, and their quixotic owner Mark Saroff then went bankrupt.

The street itself remains dimly lit with narrow, crumbling sidewalks. And about the only signs of street life were homeless folks congregating around the Volunteer Ministry Center’s day shelter at the corner of Gay and Jackson—until it relocated to new quarters on North Broadway earlier this year.

Now on the verge of coming in its stead is a renovation of the V.M.C. Building and two adjoining structures along Jackson to its west, into 75 one- and two-bedroom apartments. Downtown’s most prolific redeveloper, David Dewhirst, already owns the two three-story buildings to the west, which are partially occupied by an electrical contractor as office storage space. Acquisition of the V.M.C. Building and a $10 million investment in development of the entire complex are contingent on getting a tax break from the city, which City Council is due to consider in November.

This tax break would take the form of what’s known as a PILOT (for payment in lieu of taxes) whereby the city’s Industrial Development Board would take nominal ownership of the properties for a period of time, and Dewhirst’s in-lieu-of-taxes payments on them would be based on their pre-development value.

Assuming City Council approves, Dewhirst plans to start work early next year on what would be downtown’s second-largest residential complex (exceeded only by the 100 apartments in the Sterchi Building on Gay Street’s 100 block). He foresees completion during the first half of 2012.

Within that same time frame, the city is due to be starting work on a Jackson Avenue streetscape project extending from Broadway almost—but not quite—to Gay Street. According to the city’s Director of Redevelopment Bob Whetsel, the streetscape will include a much wider new sidewalk, new lighting and planting for which a design contract is due to be let soon. The $500,000 in funding that’s in place for the project is derived from a state grant for what was originally classified as a greenway.

The streetscape will end at the base of the ramp that elevates Jackson up to the level of Gay Street as it abuts the viaduct over the Norfolk Southern railroad tracks. The nearly 100-year-old Jackson ramps both west and east of Gay need to be replaced. It’s unfortunate that this wasn’t done in conjunction with replacement of the viaduct itself, which took place in 2006, but funding was not available at that time. Now, the city has a $5 million federal bridge replacement grant to cover the ramp work. However, because the ramps are considered to be historic structures, the replacement work can’t proceed until the city has satisfied the State Historic Preservation Office that it will preserve their historic character.

Vexingly, this year-long construction project isn’t scheduled to start until March 2013, and it’s not yet clear how pedestrian access to several buildings with entrances along the ramps will be maintained while the work is underway.

While far larger in its scope than anything that’s gone before, Dewhirst’s planned development isn’t the first to occur on Jackson’s barren stretch. At the corner of Jackson and Broadway to the west, developer/realtor Joe Petre has recently completed work on 15 condominiums housed in what’s still known as the Southeastern Glass Building. And Sanders Pace Architecture has recently relocated its offices to a smaller, renovated building about midway between Broadway and Gay.

What’s to become of the two McClung Warehouse buildings left standing after the fire is the big remaining question. While their decrepit appearance continues to put them at the top of the list of the city’s biggest eyesores, these historic buildings are known to be structurally sound and deserve to be restored. After more than a decade of failing in his attempts to do so and going bankrupt in the process, Mark Saroff would appear to be out of the picture when it comes to deciding on their fate. Under the terms of his involuntary Chapter 7 bankruptcy, as best as I understand them, a court-appointed trustee is responsible for liquidating all of Saroff’s assets to satisfy his creditors. The trustee, John Newton, reports that he has “someone making overtures about buying” the warehouses, but has yet to receive an offer.

In a bankruptcy court filing earlier this month, Newton requested court approval to retain Victor Jernigan as a real estate broker “in order to sell the properties and thereby to liquidate the same for the best and highest price.” The request states that Jernigan “has agreed to negotiate a sale of said Properties at the Broker’s expense to one particular client.” If such a sale is consummated, also subject to court approval, then Jernigan would be entitled to a commission equal to 5 percent of the purchase price.

Although a still-weak housing market wouldn’t seem conducive to more residential development, Dewhirst has just succeeded in renting the 34 apartments he created through renovation of the Daylight Building on Union Avenue, and he believes that Jackson Avenue is ripe for redevelopment as well. Restoration of the McClung Warehouses in addition to everything else that’s in the offing on West Jackson would certainly put it on the map as one of downtown’s showcase streets.

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