Capitol / Financial District / Shockoe Slip

[Brent114]

Well… adjusted for inflation, material costs, labor costs and interest rates are lower than when 90% of downtown Richmond’s high-rises were built.   The same is true for Seattle, Los Angeles, Virginia Beach,  Fairfax etc (places that boomed in the 70’s and 80’s).  Interest rates were 3 points higher when this Dominion  building was first built compared to today.  It isn’t that this project won’t be profitable, it’s that they can build elsewhere for a bigger profit.  Fine. That’s how capitalism works (if you can call it working).  But they need to stop blaming interest rates because the global built environment calls bullcrap on that. 
 

The lack of trade workers can also be blamed on 15 years of skimpy housing development.  Richmond’s current boom is more catching up than anything else (you can read about it in every other BizSense article).  The biggest generation in history (millennials) came of age at a time that housing, especially multifamily,  wasn’t even close to keeping up with demand.  The banks started giving money away and building started again.  Supply was already too low though, so it became even more profitable (because low inventory leads to higher prices per unit). Now it’s catch up time, we’re millions of units behind where we should be just for natural population growth.  Demand for trade jobs wasn’t as high when building was slow.  The country went white collar and MBAs were your ticket to success.   We didn’t need a bumper crop of plumbers and electricians.  Now we have a deficit of tradespeople because 15 years of construction is happening all at once (and immigration is at near record lows).  So no.  It isn’t “lazy people”.  It’s bad planning and bottom lines to blame. 
 

And the only thing different is scale.  I know how much materials cost because I buy them every day. Sheet goods, for example, cost 1/2 of what they did just a year ago.  Lumber too.  I know labor costs because I have to hire carpenters, electricians , brick masons and plumbers.  I don’t use steel but the price of rebar has been in a steady decline for the last year.

 

——————————————————

I’m not surprised that this project collapsed.  Honestly it never seemed real.  We never saw any renderings or site plans.    It never seems more than an idea to me. 

[upzoningisgood]

On 8/19/2023 at 10:36 AM, Brent114 said:

Well… adjusted for inflation, material costs, labor costs and interest rates are lower than when 90% of downtown Richmond’s high-rises were built.   The same is true for Seattle, Los Angeles, Virginia Beach,  Fairfax etc (places that boomed in the 70’s and 80’s).  Interest rates were 3 points higher when this Dominion  building was first built compared to today.  It isn’t that this project won’t be profitable, it’s that they can build elsewhere for a bigger profit.  Fine. That’s how capitalism works (if you can call it working).  But they need to stop blaming interest rates because the global built environment calls bullcrap on that. 

Tax rules were also different from 1981-1986 that made capital cheap. If you look in a lot of cities you’ll see a ton of high rises coming online in the mid-80s for this reason.   It’s not apples to apples, imo. Also keep in mind those were office buildings, and office tend(ed) to be more lucrative than multifamily. 
 

Being on the other side, the interest rate factor is real. Right now the yield on 3-year treasuries is 4.6%. Basically, if I have a giant sum of money I can sit on my ass and make 4.6% risk-free right now, where that wasn’t true 2 years ago. So the goal posts really  have shifted. You don’t have to be an active investor to make decent percent returns right now in the same way you did in 2019 or 2021. 

However, I fully agree with your next paragraph about construction volume and defense of tradespeople. As someone on the white collar side, the people on the blue collar side deeply impress me on a daily basis. 
 

I think this was a very speculative, risky proposal. With the risk-free rate so high, they would have probably needed an insurmountable return on investment to make the numbers work. And that’s assuming the construction estimate came in anywhere near where they thought it would. 

[I miss RVA]

3 hours ago, upzoningisgood said:

Tax rules were also different from 1981-1986 that made capital cheap. If you look in a lot of cities you’ll see a ton of high rises coming online in the mid-80s for this reason.   It’s not apples to apples, imo. Also keep in mind those were office buildings, and office tend(ed) to be more lucrative than multifamily. 
 

Being on the other side, the interest rate factor is real. Right now the yield on 3-year treasuries is 4.6%. Basically, if I have a giant sum of money I can sit on my ass and make 4.6% risk-free right now, where that wasn’t true 2 years ago. So the goal posts really  have shifted. You don’t have to be an active investor to make decent percent returns right now in the same way you did in 2019 or 2021. 

However, I fully agree with your next paragraph about construction volume and defense of tradespeople. As someone on the white collar side, the people on the blue collar side deeply impress me on a daily basis. 
 

I think this was a very speculative, risky proposal. With the risk-free rate so high, they would have probably needed an insurmountable return on investment to make the numbers work. And that’s assuming the construction estimate came in anywhere near where they thought it would. 

Really good info, as always, @upzoningisgood. QUESTION - and I know folks are going to be rolling their eyes because this is my "dead horse" that I beat incessantly - but given what you outlined (above) - how does RVA's market size (or lack thereof) relative to our chief competitors (the two Carolina cities, Nashville, Austin, etc.) hurt us relative to the specific metrics you outlined above? Are we behind the eight ball right now with the interest rate situation relative to those other cities? In other words, because those other markets are, obviously, bigger (and in some cases, significantly bigger) are they a bit more resistant to having projects either truncated or completely cancelled as has been the case in Richmond?

I ask because when I read what you wrote (above) the one thing that kept popping out to me as the missing puzzle piece is demand, and we hear that metric all the time as a key driver as to why other cities are building bigger, taller, etc. and RVA can't seem to crack the "glass ceiling". And demand is driven by market size, correct? So even though there's pressure for housing - meaning, demand IS there, and we're hearing that all the time from developers who are coming here and building that RVA actually IS a hot market -- is it a matter of RVA is a hot market - but not AS hot as those other markets that are growing faster and, as such, have the inherent built-in advantage of a bigger market size?

Maybe I'm way off base beating this dead horse (and I DO realize that interest rates affects construction EVERYWHERE - not just in Richmond) - but for me it all seems to keep coming back to RVA's lack of market size which means less demand than those other cities, which means a greater chance that when economic metrics aren't aligning PERFECTLY like they did in 2019 and even 2021, projects are more likely to get truncated or cancelled here than they are in other cities. And the bottom line is this - we MUST MUST MUST MUST get BIGGER - and not just take our merry old time doing it, either.

Am I beating a dead horse or is this argument in the ballpark?

[ancientcarpenter]

Just thought I'd share some beautiful pics of Old City Hall renovated now. I miss the old colors but these new colors are also nice in their own way - lots of paint stripping to expose the wood. Looks great in person... but again I am a fan of the wild colors of before

 

 

[wrldcoupe4]

Wow it’s so stark. Weren’t the old colors closer to original?

[ancientcarpenter]

9 minutes ago, wrldcoupe4 said:

Wow it’s so stark. Weren’t the old colors closer to original?

From what I have heard, these are the true colors to the original but this is hearsay. I will do a tour soon and report back.

Apparently, the previous beautiful colors were done in the 70s/80s.

The good thing is that they stripped paint a lot of paint so if they decide to paint it (again) in the near future it can be done easily. 

 

Quote

FROM 2015 article:

 Other than the loss of the original color scheme, the public areas are much as they were when the building first opened.

This is from the article of 2015 that is referring to the previous (colored) interior paintjob. 

https://rocketwerks.tumblr.com/post/151275255448/old-city-hall-1001-east-broad-street-built-1886

Edited September 8, 2023 by ancientcarpenter

[eandslee]

1 hour ago, ancientcarpenter said:

Just thought I'd share some beautiful pics of Old City Hall renovated now. I miss the old colors but these new colors are also nice in their own way - lots of paint stripping to expose the wood. Looks great in person... but again I am a fan of the wild colors of before

 

 

This edifice is gorgeous inside and out!  Love the new color scheme - it's more streamlined and less chaotic.  It's wonderful to have such a gem in the City!

[Brent114]

Haven’t seen the new paint in person, it may be more gorgeous than ever but man that moorish colour scheme seemed dead on for the architecture.   I always assumed it was historically accurate.  

[wrldcoupe4]

Yeah, I feel like the original intent of the design was to be over the top with the interior colors. Not an expert though.

[I miss RVA]

4 hours ago, ancientcarpenter said:

Just thought I'd share some beautiful pics of Old City Hall renovated now. I miss the old colors but these new colors are also nice in their own way - lots of paint stripping to expose the wood. Looks great in person... but again I am a fan of the wild colors of before

 

 

I've been scouring all the stuff I've downloaded over the last few years from the Times-Dispatch archives - this is the only picture of the interior of Old City Hall that I can find - and even though it's a black-and-white photo, it most definitely lines up with the just-completed renovation. Notice that much of the trim work was white and the railings look to be a single color. The current color scheme does, however, seem to omit a darker trim color around the edges of the ceiling and just under the railings of upper floors.

SOMEWHERE I think there's another black-and-white Times-Dispatch photo showing a big crowd gathered, waiting to enter City Council chambers prior to a big vote on something (I can't recall what it is) - I'll keep digging and see if I can find it.

Either way - this is as close in terms of pre-1970 photographic evidence as I can find offhand. It's clear that the color scheme at least 60-plus years ago was NOT the very colorful, middle-eastern mosaic of more recent vintage.

Photo from 1959 - courtesy of the Richmond Times-Dispatch

Edited September 8, 2023 by I miss RVA

[rjp212]

Could plans finally be in place for the old Power Station on the Canal Walk?    A ZCLR was filed for an "indoor-outdoor racquet sports with food/beverage".

[eandslee]

56 minutes ago, rjp212 said:

Could plans finally be in place for the old Power Station on the Canal Walk?    A ZCLR was filed for an "indoor-outdoor racquet sports with food/beverage".

This should be interesting!  Glad to hear that this area/building will finally get a new life!  It’s only taken about 20 years!

[upzoningisgood]

1 hour ago, rjp212 said:

Could plans finally be in place for the old Power Station on the Canal Walk?    A ZCLR was filed for an "indoor-outdoor racquet sports with food/beverage".

So, pickleball. Fun

[jbjust]

If there is anybody on here with contacts at the city -- can we PLEASE get the jersey walls around the old VEPCO building moved out of the lanes of traffic!?!!  It causes a huge backup every afternoon and there is literally no reason for them not to at least be moved back onto the sidewalks and out of the street.

[I miss RVA]

On 9/25/2023 at 8:17 PM, upzoningisgood said:

So, pickleball. Fun

The arguing and kvetching about the merits/demerits of pickleball over on the RBS commentary section is absolutely hilarious!

[Brent114]

For realz.  Richmonders are some cranky sourpusses. 

[wrldcoupe4]

It’s just like most any comment section on a news site.  

[Rooster]

A great view from the RVA chamber of commerce on the 17th floor of the Truist building on main...

[wrldcoupe4]

Love the different architectural style packed into that image. 

[ancientcarpenter]

8 hours ago, Rooster said:

A great view from the RVA chamber of commerce on the 17th floor of the Truist building on main...

 

Fun fact: The Pocahontas building (most bottom left in your pic) is scheduled for demo! Curious to see what will come in its place! The most outer left part of that building is a hotel and is not going to be demo'd. 

[I miss RVA]

1 hour ago, ancientcarpenter said:

 

Fun fact: The Pocahontas building (most bottom left in your pic) is scheduled for demo! Curious to see what will come in its place! The most outer left part of that building is a hotel and is not going to be demo'd. 

New courthouse building.

Here's the rendering that we have on file.

 

Edited October 18, 2023 by I miss RVA

[I miss RVA]

11 hours ago, Rooster said:

A great view from the RVA chamber of commerce on the 17th floor of the Truist building on main...

Great photo, @Rooster! You've just earned yourself yet another piece of prestigious RVA/UP silver hardware. Well done, sir!

Edited October 18, 2023 by I miss RVA

[Shakman]

Oh man.  I was hoping for something a bit more modern and definitely taller, but I do like the density this will create.

[ancientcarpenter]

4 hours ago, I miss RVA said:

New courthouse building.

Here's the rendering that we have on file.

 

I cannot believe I'm seeing this for the first time. Thank you.

 

Axios article: https://www.axios.com/local/richmond/2023/01/24/capitol-square-new-courts-building

[wrldcoupe4]

Ed Slipek review of the grand new General Assembly Bldg. 
https://richmondbizsense.com/2023/11/03/architecture-review-handsome-new-general-assembly-building-opens-on-historic-turf/

Edited November 3, 2023 by wrldcoupe4