What gets built first, and other Grange questions, answered

Published 4:56 pm Monday, August 28, 2023

Editor’s note: This story was updated on Aug. 31 at 2:21 p.m. with additional comments from Luter.

The first of 53 single-family homes slated for the Grange at 10Main could be occupied by the end of 2024, though its commercial component that would include the farmers market building that’s to anchor the development, isn’t expected to break ground until September of that year.

That’s according to an updated fiscal impact study Grange developer Joseph Luter IV provided to Smithfield’s Planning Commission in June ahead of the body’s vote to recommend approval of Luter’s request for mixed-use zoning for the former Pierceville property. The Town Council is set to vote Sept. 5 on the zoning application and related conditional use permits.

Subscribe to our free email newsletter

Get the latest news sent to your inbox

Mayor Steve Bowman, in an Aug. 8 email to council members, asked them to email Town Manager Michael Stallings any lingering questions regarding the proposed development by Aug. 14 in preparation for an Aug. 31 work session with Luter and his design team. Among those submitted was one asking about a possible change to the order in which the Grange’s components would be built.

The Grange, as proposed, would consist of a building that would house the town’s farmers market, a restaurant and a retailer; detached commercial space; a hotel; and 304 homes, including 212 units in three- and four-story apartment buildings.


What gets built first?

Luter, during January meetings at Main Street Baptist Church with the project’s neighbors, estimated that if the Grange was approved this year, construction of the indoor/outdoor farmers market building could begin “immediately” in 2024, and would likely take around nine months to complete.

Luter’s Aug. 18 response to council members’ submitted questions asserts the June fiscal impact study’s timeline isn’t actually a change. A phasing plan, he notes, had always intended the first phase of construction to include the market and a portion of the residences.

According to a phasing plan dated April 19, Phase 1 would encompass the market and 41 homes, 28 of which would be duplex units. The remaining single-family and duplex homes, and a detached commercial building located behind the Schoolhouse Museum, are listed as Phase 1A. The hotel and apartments are in Phase 2.

Luter, in an Aug. 30 letter to council members, asserted there is “no possible scenario in which houses are finished before the construction of the market starts.”

“The market is the anchor and focal point of this project,” he writes. “Infrastructure starts there and must be run to the back of the property for housing to begin.”

Luter’s Aug. 18 responses to the council’s questions had stated infrastructure, including roadways, offsite turn lanes and water and sewer, “all need to be developed around the market.”

“Our goal is to bring this online in Phase 1, as quickly as possible,” Luter had written on Aug. 18.

To offset the cost of realigning Grace Street as one of the development’s entrances, build the offsite turn lanes, extend water and sewer service and comply with state stormwater regulations, “the first phase of housing is necessary,” his Aug. 18 response had stated.


Will the infrastructure require cost-sharing?

Among the submitted questions was whether taxpayer reimbursement for infrastructure is “essential to completing the development.”

Luter responded that “we reserve the right” to ask the council and Isle of Wight County supervisors for “support of public costs.”

“Our request would be limited to only expenses for items that benefit the public,” Luter wrote. “We would limit the payment for these public expenses to be made only from the increased tax revenue derived from the project and not from existing taxpayers.”

In October, the town and county each committed up to $1.4 million toward the market building, which an earlier draft of the fiscal impact study estimated could cost $7.8 million, not counting the land Luter’s father, former Smithfield Foods Chairman Joseph Luter III, has proposed to donate. The Luters in 2022 offered land plus $1 million toward construction costs conditioned on the town and county putting up roughly $2.8 million combined.

A Jan. 9 email from Venture Realty to the town estimated Smithfield and Isle of Wight could collectively owe the Luters more than $7 million, or 75% of the annual tax revenue generated by the Grange, as their share of a possible cost-sharing agreement.

Luter IV told The Smithfield Times in May he expects the publicly-funded portion won’t be anywhere near that high, but he hasn’t provided an updated figure. 

Luter IV acknowledged having estimates at a May 24 Planning Commission meeting, but stated in his Aug. 18 response to the council’s questions that “final design and costs are still unknown.”

The 21-page June 3 fiscal impact study, significantly smaller than the 110-page version from March, now makes far fewer references to a proposed “public-private partnership” and states the report is “confined to a fiscal impact analysis prior to and independent of” any such agreement.

The June 3 version projects a 2.27-to-1 benefit-to-cost ratio for the county and a 4.34-to-1 benefit-to-cost ratio for the town, not factoring in any reimbursement payment from Smithfield or Isle of Wight to the Luters.

Luter, in his Aug. 30 letter to the council, said he “might ask for consideration of some reimbursement once final costs are known” but that any such request and agreement was far from definite.

“This reimbursement would only come from the incremental tax proceeds of the Grange project and not from existing taxpayers,” Luter writes.


Who will own the Grange?

Luter, responding to a related question on ownership of the Grange, said a separate developer – Weldenfield & Rowe – would develop the single-family houses and duplexes.

Luter said his father currently owns 100% of the roughly 57-acre property at Route 10 and Main Street. The elder Luter is “under contract” with Weldenfield & Rowe, Luter IV said, to sell roughly 36 acres.

“Proceeds from that sale will help fund some of the infrastructure costs,” Luter IV wrote.

The Luter family, he said, will have 51% ownership in the apartment buildings, with Venture Realty Group owning 49%. An ownership agreement will be finalized “post rezoning” Luter IV’s response stated.

For the hotel, “it is my father’s intent to have VRG and me find a hotel partner/operator with an ownership interest,” Luter IV wrote.

Luter III, his son has said at past meetings, plans to donate his share of the profits back to the town.


What changes are the Luters willing to make?

Luter IV, in his response, said he plans to create a project website, if the Grange is approved, to keep the public informed on the development’s progress.

“Minor tweaks” are possible, but “we aren’t willing to make significant changes to the variety and number of housing options,” Luter IV wrote.