Projects multiplying in downtown Lynchburg

When local chef Urs Gabathuler decided to move his popular restaurant to downtown Lynchburg more than a decade ago, some people thought he was done for.

“I had people patting me on the back and saying, ‘You know, nobody ever makes it downtown,’” Gabathuler, owner of the Main Street Eatery, recalled. “I had a lot of butterflies at the time. But, needless to say, it all worked out.”

The Main Street Eatery, a high-end restaurant with a loyal following, has thrived in downtown since opening near the corner of Main and Ninth streets in 1998. Gabathuler is now working to restore a second building up the street, a circa-1875 structure he plans to transform into a mix of business and living space.

His is one of multiple revitalization projects currently underway in the downtown district — an area generally defined by city officials as the section of the city between Court Street and the riverfront.

The district, after languishing for decades following the rise of the shopping mall lifestyle, has experienced a re-blossoming of sorts in recent years. Property values are growing at a rapid pace as private investors take a greater interest in the neighborhood.

Last year, downtown’s total taxable value was assessed at $126.4 million. This year, that assessment jumped to $132.9 million.

Over the past six years, downtown’s value has surged by $57.8 million, an increase of 77 percent. Taxable property values exclude the holdings of tax-exempt entities, including nonprofits and the city government.

Tom Gerdy of Gerdy Construction Co. said the city’s downtown is “coming of age” as people rediscover the area’s value. His own company has been headquartered in downtown for close to 15 years, giving him a front-row view of the district’s evolution.

“When we first came down here, you could buy a building for a song,” he said. “Now people ask me all the time to keep an eye out for a building. Prices are going up, space is filling up and people are getting creative with the use of the buildings.”

“A lot of people are making a commitment to downtown. There seem to be more every day.”

Construction crews have been highly visible within downtown in recent months, as owners invest in refurbished facades and modernized fixtures.

Even the recession hasn’t been able to cool the activity. Gerdy is currently working as the general contractor on a renovation project at 920 Main St., a commercial building whose upper floors are being rebuilt as apartments.

Contrary to the constant headlines about the failing market, Gerdy said this is a prime time for owners to revamp their properties.

“I think now is a wonderful time to build,” he said, noting construction prices are becoming more competitive as companies become hungry for work.

“Right now is a very good time to be moving forward with projects you were going to do anyway,” he said, adding he has faith Lynchburg’s downtown revitalization efforts now have enough “critical mass” to ride out the downturn.

“This isn’t going to stop,” he said.

Downtown generated $1.1 million in property tax revenue alone in the current fiscal year and is expected to yield $1.4 million next year (assuming the tax rate is kept level as supported by some).

Those are adjusted figures that take into account the partial tax exemptions awarded to several properties under the city’s Real Estate Rehabilitation and Renovation Program.

The program, which is limited to older buildings, offers tax breaks to property owners who significantly increase the value of their holding through renovations and expansions.

In this current fiscal year, the city forgave about $223,400 in taxes for 19 downtown properties.

City officials may also soon start considering extending additional tax incentive opportunities to downtown by designating the area as a formal arts and cultural district.

That label would allow the city to offer special tax breaks and other incentives to downtown businesses. Virginia communities once required General Assembly approval to establish their own arts districts, but new legislation sponsored by Del. Shannon Valentine, D-Lynchburg, and signed by the governor this month allows local governments to act unilaterally on the issue.

That legislation was strongly supported by Lynchburg. Local officials are expected to follow up by creating a local downtown arts district, although no date for that discussion has been set.

Last week, downtown was the site of VITA, a grassroots festival organized by local people and featuring music, art and fashion.

The event was also the launching pad for a new downtown advocacy group, Lynchburg DNA — short for Lynchburg Downtown Neighborhood Advocates.

The group’s founder, Ryan Thomas Neace, described its mission as education, advocacy and organization.

“It’s a tragedy to me to see these historic buildings in downtown stay boarded up,” he said. “… We need people who’ll say, yes, we’re going to show up every stinking time, we’re going to buy local and we’re going to be downtown rain, sleet, snow or shine.”

Neace, a consultant whose services include event planning, has formed Lynchburg DNA in partnership with other local business owners whose backgrounds range from marketing to coffee brewing.

Their fledging organization offers a younger voice than the city’s more established advocacy groups, such as Lynch’s Landing. Future plans include an album launch for a local musician, details to be announced.

Neace said the group would be a “cheerleader” for downtown revitalization, as well as apply pressure when needed to get things moving.

“We’re saying we want this to happen and we’re not going to go away until it does,” he said.

Asked how he sees the current state of downtown, he likened his assessment to the comments a teacher might write on a student’s report card: “Has potential. Needs more effort.”

For Gabathuler, who recently secured a building permit for his renovation project at 1107 Main St., downtown Lynchburg is finally being pushed into “the league it deserves.”

A decade ago, the district was a little sadder, maybe even a little “trashier,” he said; what it needs now is the continued focus and support of investors and the community at large.

“Let’s first build up the heart (of the city),” he said. “The heart is downtown.”

Going up
Some examples of downtown properties that have increased in value. (Note: The 2009 tax figures provided here are preliminary. They were calculated using the city's proposed tax rate of $1.05 per $100 of assessed value. That rate is still under discussion by City Council.)

829 Main St. The Krise Building
- Owners: Krise Building Associates LLC (Bruce Johnson & Norris Blanks)
- Built: 1904
- 2009 assessment: $1,336,500
- 2004 assessment: $725,000
- Rehabilitation tax credit: None
- Change in tax bill 2004-2009: $5,985.75

900 Main St. Parlor Ballroom
- Owner: Chopper’s Incorporated (Ralph “Chopper” Wilson Jr.)
- Built: 1949
- 2009 assessment: $602,100
- 2004 assessment: $137,000
- Rehabilitation tax credit: $413,300 (Ending 2011)
- Change in tax bill 2004-2009: $461.70

1312 Commerce St. Bluffwalk Center
- Owner: Bluffwalk Center LP
- Built: 1906
- 2009 assessment: $10,497,400
- 2004 assessment: $195,400
- Rehabilitation tax credit: $9,798,100 (Ending 2012)
- Change in tax bill 2004-2009: $5,173.71