Windsor Castle LLC amends lease to five year term

Published 1:06 pm Wednesday, January 18, 2017

By Ryan Kushner

Staff writer

Historic Windsor Castle Restoration, LLC announced at its Jan. 11 committee meeting that its 30-year lease of 46 acres of Windsor Castle Park, approved by Smithfield Town Council two weeks ago, would be reduced to five years, following “unwarranted concern” expressed regarding the original length of the lease, according to attorney for the town and LLC, Bill Riddick.

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The LLC, formed by Smithfield Foods and Windsor Castle Park Foundation, entered into the lease agreement with the town in order to manage the rehabilitation of the Windsor Castle manor house and outbuildings and be eligible to receive historic tax credits from the state when the renovations are completed. The lease agreement, proposed at a Nov. 1 public hearing, was signed by LLC managing member Sue Ivy and subsequently approved by Town Council on Tuesday, Jan. 3.

As “Landlord” on the lease, the town will continue to manage and maintain complete ownership of the public property, Riddick said. {mprestriction ids=”1,2,3,4,5,6″}

The change in the length of the lease was a mutual agreement between the town and the LLC, according to Riddick.

Riddick said the original 30-year term of the commercial lease was based on the advice of outside tax counsel consulted by the town as the lease between the two entities was being formed.

After finding that people were “so upset” about the 30-year term, Riddick said he went back to the tax counsel, Pender and Coward, who reexamined the regulations and determined that five years, roughly the amount of time the restoration work and the time needed to use related tax credits is expected to take, would be an acceptable time frame for the lease agreement. There will be an option to renew the lease for five one-year terms should the project take longer, Riddick said at the LLC’s meeting.

The 30-year term was based in part on the presumption that the LLC would simply dissolve after the rehabilitation work on the property was completed, according to Riddick, which it still fully intends to do, according to LLC, Foundation and Town Council member Dr. Milton Cook.

Riddick said after the meeting that he continues to be flabbergasted as to why a 30-year term on the lease agreement would be a cause any concern amongst townspeople or the press, as the town will maintain total control over the park and its facilities.

Riddick and members of the LLC, which includes representatives of the town, Foundation and Smithfield Foods appointed by Ivy, have stressed that the sole purpose of the Historic Windsor Castle Restoration, LLC is to manage the DHR-approved rehabilitation of the historic property so that it can be eligible to receive historic tax credits from the state.

The entire project, which is being conducted in three phases, is expected to cost $8 million. So far, the first phase is completely funded. Smithfield Foods has donated $1 million, plus architectural fees, to the rehabilitation, and the town of Smithfield has pledged $2 million in tax money. The Foundation is in the midst of a $4 million campaign to raise more funds for the endeavor.

The remainder of the meeting was spent discussing work on the manor house and caretaker’s house and Smithfield VA Events’ offer to build two storage barns, as well as criticizing The Smithfield Times for its coverage of the LLC and its lease with the town and plans for the manor house. Two areas of the lease agreement about which the newspaper asked questions — its 30-year duration and the initial lack of any statement specifying the town’s continued management of the property — were ultimately changed by the town and the LLC.  {/mprestriction}