Charlottesville seeks action from Dewberry Capital on stalled hotel project

Construction of what used to be known as the Landmark Hotel on the Downtown Mall stalled in 2009 leaving a concrete skeleton. The finances of the former owner fell apart and the property and structure at 201 East Water Street were sold at auction.

Dewberry Capital made the high bid of $6.25 million in June 2012 and developer John Dewberry indicated he would move forward with completion after another project in Charleston, South Carolina, was completed.

Today the City of Charlottesville announced that City Attorney John Maddux sent a letter on August 19 to Dewberry requesting a plan be delivered to the city within 60 days.

“The Dewberry Charleston opened in 2016,” Maddux wrote. “Ten years have passed since then. The building on Water Street remains a concrete and steel frame, without windows, elevators, or basic building services, in the center of Charlottesville’s Downtown Mall.”

The letter goes through a history of Dewberry’s ownership of the property such as a notification from the city in 2013 that the project met the statutory definition of blight but no mitigation plan was submitted.

“In 2017, City staff worked with you on an incentive package intended to get the project moving, and when the agreement came before Council in December of that year it was not approved,” Maddux continued. “Nothing has been submitted to the city for this property since.”

In 2022, the Friends of Downtown Cville wrapped a vinyl covering around the building to improve the aesthetics but Maddux wrote that this is now beginning to deteriorate. He also said the city has lost its patience.

“The City’s posture toward this property is changing, and you should not plan on the coming years resembling the last fourteen,” Maddux wrote. “The condition of 201 East Water Street is a matter of legitimate concern, and the City intends to treat it as one.”

Maddux asked for Dewberry to return with a written plan that addresses at least four points:

• The city wants to know what Dewberry plans to do with the property. Sale, construction, removal of the skeleton?
• The city wants a schedule of upcoming milestones for any action to redevelop.
• The city wants to know what Dewberry plans to do about the deteriorating wrap.
• The city wants to know who will serve as a contact person for interaction.

Maddux said the city intends to conduct a structural evaluation and inspection of the property as the most recent one is from 2017. He also said the city is willing to help facilitate a sale.

“Tell us that a sale is your objective, give us a realistic timetable, and my office and the Office of Economic Development will make staff available to any serious purchaser to talk through permitting, site plan review, and process,” Maddux said.

In an information release sent out at 8:41 a.m. this morning, City Manager Sam Sanders called the unfinished project a “scar on downtown.”

“The City continues to believe the best outcome would be for the owner to sell the property to someone ready, willing, and able either to finish the building or remove the existing shell and start over,” Sanders said. “What we are no longer willing to accept is an indefinite continuation of the status quo.”

According to the city’s GIS, the 0.27 acre property zoned Downtown Mixed Use is assessed at $9.215 million with $2.3 million of that being the underlying land.

Afton Schneider, the city’s director of Communications and Public Engagement, said no response had been made as of August 25.

More on this story as it develops.

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