Construction has still not begun on the proposed redevelopment of Dan River Inc.’s former landmark White Mill building along Memorial Drive, and the expected cost of the effort has increased further.
The price, which was originally $62.5 million, has gone from $68.75 million to around $81 million.
Almost all of this increase of about $12 million is due to new site development costs, allowance for tenant improvements and increased construction costs, said Corrie T. Bobe, director of Danville Economic Development on Friday afternoon, following a special meeting of the Danville Industrial Development Authority.
Officials had originally hoped construction would begin by the end of last year, but it was delayed due to inflation, labor shortages and supply chain issues. The cost of the project also increased by 10%, from $62.5 million to approximately $68.75 million.
Now the work start schedule has been pushed back to August again, according to a spokesperson for The Alexander Company, the Wisconsin-based company that is partnering with IDA on the project.
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“Ultimately, we remain eager to get the lights back on at White Mill,” Alexander Company spokeswoman Kendra Bishop told the Danville Register & Bee on Thursday via email. “Historic preservation projects of this magnitude are complex and can take time, and we don’t want our lengthy due diligence process to be misinterpreted as a lack of interest or effort. Restoring the White Mill to its former glory is always a priority for The Alexander Company.
The IDA, at its meeting, approved two resolutions for investments by two companies in historic federal and state tax credits for the project: Chase Community Equity, LLC, for the federal credits, and Commonwealth Advisors Capital for state credits.
About $10.9 million in federal tax credits and about $14.06 million in state tax credits — a total of about $25 million — are expected to cover nearly one-third of the project cost. $81 million.
Virginia Housing, formerly known as the Virginia Housing Development Authority, will fund the residential portion of the project through a bond issue, Vos said.
Other parts of the project will be covered by The Alexander Company and IDA.
The city is reviewing the project for permits, and the project’s construction contractor, Rehab Builders, has gathered bids from subcontractors, Bishop said.
Additionally, the company will continue to work through partnership agreements and loan documents over the next two months, she said.
Construction hasn’t started yet because “some deliverables are behind schedule,” Bishop said. Additionally, the bond issuance for the project is scheduled for July “and we expect construction to begin in August,” she said.
The project is now expected to be completed by the first quarter of 2024, Vos said on Friday.
Architectural, engineering and environmental remediation plans have been finalized for the project, but “we are incorporating feedback from the lender and the city plan review for a resubmission,” a- she declared.
The Alexander Company, in joint venture with IDA, plans to bring new apartments and commercial space to the White Mill building.
Plans include 110,000 square feet of retail space, 150 apartments (with 100 more units in the future), and 219 indoor parking spaces. Additionally, the covered bridge that spans the River Dan on the north side of White Mill to the old site of Long Mill is being restored. The bridge will be for pedestrians and will connect the north and south sides of the Riverwalk Trail.
And there are plans to use the canal on the south side of the building as a whitewater feature and provide approximately 1.12 acres facing the Dan River for an extension of the Riverwalk Trail.
The IDA and Alexander have formed a company, called 424 Memorial Drive, LLC, which jointly owns the property.
Alexander Company will supervise the construction of the residential part of the project, and IDA will be in charge of the commercial part.
Apartments will be available in one-, two-, or three-bedroom units for rent, with one-bedroom units renting between $840 and $980 per month, and two- and three-bedroom apartments renting between $1,000 and $1,000. $200 and $1,170 to $1,490, respectively, Vos said.
Officials say 25% of apartments would be set aside to make housing available to individuals and families earning between $30,000 and $50,000 a year.