The Virginia Department of Housing and Community Development’s (DHCD) Virginia Main Street (VMS) program is incredibly excited to co-host the 2022 Main Street Now Conference alongside Main Street America in Richmond, Virginia, May 16-18. Get to know our state, host city, and Main Street communities through this special blog series! Conference registration opens soon! Check out the conference website and follow conference Facebook and Twitter accounts for the latest updates.

Small-scale, mixed-use real estate development projects play a critical role in the ongoing transformation of Main Street districts. These projects often include multiple properties held by separate owners and inhabited by small independent businesses. While small-scale developments can be costly to develop on a per square foot basis, mixing housing, institutional, transportation, or hospitality components, in addition to retail and entertainment, can spread the risk. Housing and mixed-use projects not only bring additional financing options into the initial redevelopment, but they also provide a means of diversified income streams during the operational phase.

Keep reading to find out how Virginia Main Street programs have driven progress downtown through key small-scale real estate projects. Plus, get a special preview of 2022 Main Street Now Conference sessions about these outstanding projects and communities.

Be a Catalytic Convertor

While incremental progress and small wins are the bread and butter of progress on Main Street, every now and then a catalytic redevelopment project picks up the pace and drives local pride and expectations to a higher level. These raised expectations are quantified by increased follow-up investment in subsequent projects by both the private and public sectors.

The redevelopment of The Prizery, a 38,000 square-foot adaptive use project in South Boston, Virginia’s old warehouse district, infused the end of downtown near the river with new energy and spurred additional investments after its completion in 2005. Tamyra Vest, Executive Director of Destination Downtown South Boston (DDSB), recalls that the mixed-use education and arts complex “could have ended up in a lot of different places, but it's the ambience of a tobacco warehouse that definitely won out over everything else, in addition to having the three floors, the warehouse field, the historic feel and an owner who was willing to donate it.” Other sources of redevelopment funding included $1.5 million through the Transportation Equality Act for the 21st Century (TEA-21), $2.2 million of historic tax credits, $2.1 million of private fundraising and $1.5 million in local government funding.

Prior to the completion of the Prizery, Vest noted, “The northern block of downtown was the place to be in retail, not near the tobacco warehouse district. The renovation of the Prizery changed the energy and where the retailers wanted to be located. Everybody wanted to be in the southern block. Then, we started getting some spin-offs, and it was a catalyst for destination dining and other retail concepts. It really changed the outlook of downtown overall.”

After finishing the Prizery, addressing the need for greater housing options became the next real estate goal for the local Main Street organization. Vest emphasized, “We, a crazy nonprofit organization, took on ownership of the last standing tobacco warehouse so that it wouldn't fall down or be torn down. With that building, we developed Taylor Lofts, the first bachelor pad type of living in South Boston. It was probably the first market rate housing in downtown also, creating apartments for professional people or for recruiting a doctor that wants to come work in the local hospital. Since then, other buildings followed suit to offer living space upstairs.”

Hear South Boston, Virginia, leaders explain another Main Street development success at the Main Street Now Conference during the session “Sparking Transformation by Developing Tech Hubs in Rural Regions.” Speakers will share the story of the unique public-private partnership that launched the SOVA Innovation Hub and steps others can take to launch a co-working space in a small town.

Small Regulatory Changes Can Spark Major Investment

While a specific project sometimes spurs a windfall of action, a community need only make a small but incisive change to its regulatory environment to release a deluge of investment. In 2017, Paige Read, Director of Tourism and Economic Development for the Town of Culpeper, noted, “We were seeing interest from developers and from building owners downtown in pursuing projects to convert second and third story office space to residential. After walking them through all of the different fees and permits required, over and over there was a moment of pause, if you will, when it came to the tap fees. Then, they would say something along the lines of, ‘Wow, okay. That much per unit?’ And the project would stop.”

After doing some research, Director Read, along with the town manager and the directors of planning and public works, found that the proposed upper story housing projects functioned more like age restricted communities, using pulled meter systems rather than the typical single-family homes for which the code was written. She stressed, “Most of the units that developers and property owners were looking to build were small units and one-bedroom units. It’s not like families of four to five people were going to be living in them, so we thought maybe there's an excess, you know? Maybe we can bridge that? There were proven documented examples of reduced usage from this aging population, without kids. Could we see that playing out for small units in our historic downtown? We thought so.”

Having identified tap fees as an opportunity to reduce the real cost of converting offices to housing downtown, Culpeper created the Downtown Development Area Apartment Incentive Program. Under this program, no additional tap fees are assessed for changes of use for existing buildings in the designated development area of downtown as long as the new use is already allowable under the current zoning ordinance.

Read explained, “We only wanted to activate it for an 18-month period at first, just in case 1) it wasn't successful or 2) it was so wildly successful that we needed to reassess it again. We still have this policy in place, and over 40 units have been converted in a four-year period of time.”

Check out Culpeper’s growing downtown housing scene during a Main Street Now Conference Mobile Tour on Sunday, May 15 from 8am – 5pm! Tour this quintessential southern town filled with award-winning wine and craft beer, boutiques, outdoor adventures, and more.

Don’t Just Tell, Show

One of downtown Wytheville’s eyesores was a large vacant, dilapidated automobile storage facility for the county known as the Carpenter Building. Todd Wolford, Executive Director of Downtown Wytheville, Inc. (DWI), said, “Nobody knew what to do with it.” Despite the fact that the building was listed as a contributing structure in the historic district, the county considered tearing it down to build automated parking. Meanwhile, according to Wolford, Nelson Tidwell’s dream was to build a brewery.

To help Tidwell see the potential for adaptively reusing the structure, DWI provided architectural renderings of what the Carpenter Building could look like after rehabilitation and how the space could work for brewing. At the same time, Wolford indicated that he “started working with a property owner to help him to see that doing something beneficial for the community can be more meaningful than getting the gold standard price. Once the seller was able to see it that way, he got excited about the process. The price came down, and the rest is history.”

Through the process and with DWI working behind the scenes, the buyer and the seller became friends. Together, they initiated about $3 million of private investment into Seven Dogs Brewing in downtown Wytheville. Wolford noted, “That brewery project is what generated nightlife in our district for the first time in generations. Now, we have many more spots for nightlife, but that's what kicked it off. So, long story short, the building that the county wanted to tear down is now a full-scale, huge private investment with nightlife and a total game changer for the community.”

Technical Assistance for Small-Scale Developers and Property Owners

When it comes to downtown housing projects, Frazier Associates, a full-service architecture and planning firm and Virginia Main Street’s lead designers, has developed a fantastic Upper Story Residential Brief to make it easier to work with property owners and help them see possible layouts and options for housing in existing structures. This brief is detailed and serves as a great first step for thinking through the nitty gritty of converting upper floors into residential units.

Join Kathleen Frazier, FAIA, from Frazier Associates, Architects & Planners for the Main Street Now Conference session “Upper Story Housing in Historic Downtowns.” Frazier will provide an overview of the parameters for upper-story housing in typical historic downtown commercial buildings.