Supervisors ratify Project Julius to support Home Depot’s development of Fashion Square Mall

In recent years, Albemarle County has used its Economic Development Authority to help broker various negotiations to obtain various grants and incentive packages. For instance, Project Leopard helped the firm Bonumose obtain a state grant to incentivize the creation of dozens of jobs. Project Bee Friend helped Siller Pollinator secure another grant from the Virginia Department of Agriculture and Consumer Services.

On August 21, the Board of Supervisors took an official action on Project Julius, a $750,000 tax incentive package intended to help a major retailer as they begin redevelopment of Fashion Square Mall. 

“I think as a community member, you think of the Fashion Square Mall property as one contiguous property,” said Emily Kilroy, Albemarle’s interim director of economic development. “It is actually several different parcels that comprise that area.” 

Home Depot purchased the former Sears building in September 2022 as well all of the retail space inside the mall. Belk owns their store, and developer Richard Hewitt owns the former J.C. Penney and leases part of that space to Albemarle County for a public safety fleet operations center. 

“The former Sears at Fashion Square Mall is the location for that new Home Depot,” Kilroy said. “A few years ago, the county adopted the Rio / 29 Small Area Plan and a form-based code overlay district. The plan identifies the Rio / 29 intersection as the heart of urban Albemarle County and it designates the four quadrants as critical for the commercial corridor’s future.” (view the plan)

That plan was adopted two and a half years after the signalized intersection at Rio Road and U.S. 29 was converted to an underpass and there were many catalyst projects envisioned to help guide public investments. Kilroy said the plan calls for partnerships to implement some of the infrastructure and return people to the area for commercial purposes. 

 “Redevelopment of this parcel will correct what has been a stark decline in property values for this area,” Kilroy said. “I share this context because we have an opportunity to support the Home Depot as a first catalyst project for the redevelopment of what could be a majority of this quadrant.” 

That project is a realignment of Hillsdale Drive to travel across the property with the first phase upgrading a roadway through Fashion Square Mall’s parking lot to public road standards. County officials approached Home Depot about the possibility of a multi-faceted partnership and company officials described what they needed. 

“They learned of increased costs associated with this particular site and those costs were estimated to be anywhere between $850,000 to a million dollars and It was primarily associated with the demolition of the former Sears and the Sears Auto Center, which had a requirement for asbestos abatement as well as brownfield remediation,” said J.T. Newberry, deputy director of the Albemarle Office of Economic Development. 

Newberry said those higher costs may have been a barrier to Home Depot proceeding. The county and its Economic Development Authority negotiated terms for a tax increment financing agreement under the codename Project Julius to grant up to $750,000 in real property tax  rebates over 10 years. 

“The company would agree to really accelerate their investment in this site,” Newberry said. “They would complete the retail store and garden center by Christmas Eve of next year. They would reserve and dedicate up to 50 feet of right of way for the Hillsdale Drive realignment.”   

As part of the deal, Home Depot will also actively seek to find a tenant for the Red Lobster restaurant that has recently closed. 

The connection between the public and private in this partnership is related to the increase in property value that would be generated under the new development.

“As investment into the site would happen, the value of the site would increase and as the company paid those increases in taxes, we would rebate them back to the company to support the additional investment there and help cover those increases in costs,” Newberry said. 

Newberry said Home Depot will invest $26 million in building out their new store. He said in addition to property taxes to be generated from the site, Albemarle expects the new store to produce between $400,000 and $500,000 a year in local sales taxes. He said the store is expected to create 100 jobs.     

The idea had the unanimous support of the six members of the Board of Supervisors.   

“This to me is a good example of locking in a business to get it put in place, get them committed to a timeline to get it up and running, and a low risk investment for us and we’ll see a return on it in a very short time,” said Rio District Supervisor Ned Gallaway. 

Scottsville District Supervisor Michael Pruitt said he was excited about the project because it will bring about redevelopment. However, he also expressed frustration.

“While I recognize the proposal that we are voting in favor of is the best decision based on the position we are in, it is still a frustrating position that we are put in because we are in a situation where you basically have patient capital operating at a scale that they can afford to have losses by [not] developing their own property which they can then use that ability to be patient to extract certain concessions from us as the community,” Pruitt said. 

Supervisors unanimously adopted the support agreement. 

Other investments in the area have not had a public component. Earlier this year, the Carter Machinery Company purchased a 4.67-acre property to the east of the Northside Library for $3.53 million. It has since opened a rental store for construction and lawn equipment, eliminating parking spaces that had been rented for library patrons. 

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