Council holds first reading of $500K payment to New Hill for BEACON kitchen

Tonight, Council will have the second reading of a proposal to give half a million to a nonprofit organization outside of the budget cycle for an economic development project. 

“This is BEACON, which stands for Black Entrepreneurial Advancement and Community Opportunity Network,”  said Yolunda Harrell, the CEO of the New Hill Development Corporation. “What we are seeking to develop is a shared-use commercial kitchen and incubator in Charlottesville.” 

New Hill was formed in 2018 with the goal of strengthening the Black community in Charlottesville.  Council agreed on a 4 to 1 in late 2018 to allocate $500,000 from a Council reserve fund for New Hill to create a small area plan for the Starr Hill neighborhood. The project was later converted to a vision plan which was endorsed by Council in April 2021.

The idea for the Beacon commercial kitchen came out of the plan and a new strategic plan for New Hill puts a greater emphasis on increasing economic opportunities. 

“Essentially what we are saying is what if we could reduce financial barriers?” Harrell asked. “What if we could create at least 94 new jobs? What if we could add more diversity to the local food economy? And what if we could help stabilize existing businesses and support up to 70 businesses in one location?” 

Members would be able to rent the space hourly or monthly, and would not have to purchase their own equipment. The kitchen would also help with packing of food products as well. Harrell said this can save entrepreneurs thousands. 

“This project pays for itself,” Harrell said. “The investment that we’re asking you to make you’ll certainly get that back.”

The ask for the city is $500,000 and the original idea was that half of that would come from contingency funding from the American Rescue Plan Act. The other half comes from the city’s strategic investment. The project has already received some funding. 

In late December, Governor Glenn Youngkin announced a $50,000 grant from the Agriculture and Foresty Industries Development program for the project. New Hill also received an $189,000 grant last summer from the state’s Growing Opportunities fund from the Virginia Department of Housing and Community Development. 

“It has gotten some grants already but it is in need of some additional funding to get it off the ground,” said Chris Engel, the city’s economic development director.  

The project would be located in Kathy’s Shopping Center in a warehouse that was formerly where Cavalier Produce was located. The space had been rented to Champion Brewing, who subleased a portion of it to Decades Arcade. That entity is moving to the Downtown Mall. Harrell said there would be space for 16 different businesses to work at the same time. 

Harrell said the entire project will take a total investment of $2.3 million. The Community Investment Collaborative has agreed to a $500,000 loan and the rest comes from grants. 

“Right now our funding gap is about $1.2 million,” Harrell said. “We want to make sure that this project is up and operational before the year is out because our community can’t afford to wait.”

York Properties would continue to own the property. The lease will last for up to 20 years according to Harrell. 

Vice Mayor Juandiego Wade said he had heard the presentation before and the funding had his support.

“When we talk about, you know, how to amend for some of the past practices of the city and this country, it’s programs like this that we should support but this is something that’s going to be a big benefit for the city,” Wade said. 

Councilor Michael Payne said he also supported the project but was concerned about spending down American Rescue Plan Act funding that still remains. 

“You know we saw [at the] last budget presentation that we’ve got almost no money so every time we’re wheeling away at our existing ARP money we’re reducing the flexibility we have and that’s my only concern,” Payne said. 

For instance, Payne said Council may need to contribute to help the School Board purchase the county’s share of the Charlottesville-Albemarle Technical Education Center or supporting a new homeless shelter. Payne suggested using all of the funding from the strategic investment fund, which has already been augmented by $1 million from a previous ARP allocation. 

Engel said there is a timeline to use the American Rescue Plan Act fund so a decision had been made to pull from that account.  He said if Council wanted, he could do what Payne wanted. 

Charlottesville Mayor Lloyd Snook said the investment was appropriate for Council to make as a remedy. 

“It helps get at some of the particular injustice that’s associated with Vinegar Hill from 60 years ago,” Snook said. “What Vinegar Hill did was to destroy a community that included a number of small businesses including a number of the kind of businesses that would benefit from this kind of a project.” 

Second reading is tonight. It is not on the consent agenda due to some of the changes requested. 

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