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Chesterfield On Point

Posted on: August 24, 2022

Board of Supervisors approves performance grant agreement with Lake Adventures LLC

The Lake mixed-use development

The Lake mixed-use developmentLake Adventures LLC is planning to construct a mixed-use development on 105 acres at the intersection of Genito Road and Route 288. 

The Chesterfield Board of Supervisors voted Wednesday to approve a performance grant agreement with Lake Adventures LLC, the developer behind a unique 105-acre mixed-use project planned at the intersection of Genito Road and Route 288.

“To me, this [development] is a difference-maker for the area,” said Chris Winslow, the board’s chairman, who called it “a special place” because of Chesterfield’s 2016 purchase of the nearby River City Sportsplex. “Sports tourism is an increasingly large piece of our economy. When you look at it broadly, this project is complementary to the uses at the sportsplex because it offers [lodging], places for people to have breakfast, lunch and dinner, and things to do that will keep them here.”  

The Lake project, which represents an estimated $323 million capital investment, is strategically important to Chesterfield as an economic development asset. Anchored by a surf park and lake for other water recreation activities, it will attract visitors to the county from across the Richmond region and beyond. It also will create opportunities for much-needed commercial development, entertainment and public gathering spaces for various community events on Genito Road.

The 115-acre River City Sportsplex already brings thousands of athletes, coaches and family members to Chesterfield annually for sports tournaments, but a certain percentage of those visitors leave the county after exiting the facility because of a lack of lodging, eating, shopping and entertainment options. Offering a more customer-friendly experience, and in turn keeping more of those sports tourism dollars in Chesterfield, will benefit individual businesses, bolster the local economy overall and drive additional tax revenue.

That aligns with Chesterfield’s long-term vision for the Genito Road/Route 288 area, as outlined in the draft recommendations of a special focus area plan presented to the community last month.

It’s also important to note that the performance grant agreement provides no up-front financial assistance to Lake Adventures LLC. Instead, contingent on performance by the developer, it provides for a partial rebate of the incremental increase in local taxes collected from The Lake’s commercial, entertainment and mixed-use elements over a 20-year period.

For the first 10 years, the developer will receive an annual grant from the Chesterfield Economic Development Authority equal to 80% of the increase in real estate, sales and occupancy taxes paid on the commercial and entertainment portions of its property.

The tax rebate threshold falls to 60% for years 11 through 20.

Over the full life of the agreement, the rebate is 40% for two 300-unit mixed-use buildings that will have commercial space on the ground floor and multifamily housing on the floors above.

There is no rebate of taxes assessed to residential-only buildings.

The board’s vote was 3-2, with Vice Chair Jim Holland (Dale) and Supervisor Tara Carroll (Midlothian) joining Winslow in support.

Supervisors Kevin Carroll (Matoaca) and Jim Ingle (Bermuda) voted no, both saying they hope the development is ultimately successful but citing concerns with the structure of the performance agreement.

The grant is designed to defray part of the additional expense the developer will incur from building structured parking (i.e., parking decks) rather than utilizing surface parking lots at The Lake.

While structured parking costs significantly more to construct, it has a far smaller footprint than surface parking; space that otherwise would have been allocated to asphalt can instead to be used to bring in additional restaurants, retail and entertainment options, thereby increasing the project’s economic impact and tax revenue generation.

“Structured parking will allow us to maximize the value of the dirt at this strategic location,” said Matt Harris, deputy county administrator for finance and administration. “We don’t have an endless supply of real estate and we need to maximize it from a revenue perspective.”

Parking structures presently are scarce in Chesterfield, but likely will become a more common element of future projects as real estate values continue to rise, incentivizing developers to seek the highest and best use of sprawling, underutilized surface parking lots. 

The undeveloped parcels that are zoned for The Lake currently generate about $400,000 per year in local tax revenue. Even after the rebates, that’s expected to increase to $1.6 million annually over the duration of the 20-year grant period.

Once the agreement expires, Chesterfield is projected to collect about three times that much in real estate, sales and occupancy tax revenue going forward – another step in county administration’s ongoing effort to diversify the local tax base and reduce the county’s reliance on residential property assessments to fund government operations.

 




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