City Market Lofts

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In their heyday, the three historic buildings in the Lower Main Street area of Lynchburg, Virginia, bustled with activity, but before the 1990s had ended, they were vacant. The last tenant had left after a sprinkler system malfunctioned one weekend and flooded five floors of inventory. So as the new century opened the buildings stood closed, empty reminders of downtown Lynchburg’s more prosperous past.

By then, city officials and business leaders had already focused their attention on turning things around. They were signs of success in the city center, and hopes were high for continued revival. The developers knew that a strong residential base was key to a continued downtown renewal, and the historic buildings at 1225-1307 Main St. were ripe with possibility. The challenge was to make the financials work.

Because of the poor condition of rental stock in Lynchburg, market rates were too low to support the rehabilitation envisioned. It took a triple layer deal including tax credits, public funds and a long-term lease, to make the numbers work. Even then, the developer took a large deferred fee, convinced that the successful project would lift rates in the rental market and be a catalyst for other deals.

Public support was essential, and it took time for the developer to convince some elected officials that market-rate lofts—not high-end condos—was the best approach. It took more than three years, with multiple players and multiple interests, to seal the deal. But in the end, supported by the city manager, the developer’s vision prevailed.

In addition to perseverance and vision, keys to making the project possible were the city’s willingness to contribute to the financing package; the opportunity for a long-term lease to meet Central Virginia Criminal Justice Academy’s need for year-round dormitory space; and Landmark’s ability to persuade a lender to be the first to use New Market Tax Credits.


City Market Lofts was financed through a combination of public and private sources: BB&T provided $2.175 million first mortgage and $2.5 million second mortgage through an EDGE (Economic Development and Growth Enhancement) loan through the Atlanta Federal Home Loan Bank; the sale of New Market Tax Credits and state and federal Historic Property Tax Credits through Wachovia using an A-B leveraged loan structure provided $6.06 million in equity; and local governments provided $1.4 million in support through a $950,000 no-interest city loan, $365,000 for the property and $120,000 for a long-term lease with the Central Virginia Criminal Justice Academy.


Totaling about 155,000 square feet, the three buildings comprising City Market Lofts are situated on 1.8 acres amid quaint shops, restaurants, entertainment venues and a few blocks from Riverfront Festival Park, a restored public area on the historic James River.

The James T. Davis building at 1225 Main St. was designated for ground-floor retail and upstairs apartments. The 44,100-square-foot building also houses the property manager’s office. The interior design took into account preliminary plans that city officials have for publicly funded improvements to the adjacent open-air market from which the development takes its name. The building houses Groovy Furniture, a company owned, ironically enough, by the family that owned the office supply company that had been flooded out years earlier, and the Junior League.

Guiding the design for the old Bowman & Moore Leaf Tobacco Factory at 1301 Main St. was the goal of creating inviting, loft-style apartments above ground-floor commercial space. As with other adaptive reuse projects, this effort required the creation of multiple residential floor plans to accommodate the nooks and crannies that give the building its historic character.

The third building, at 1307 Main St., was originally a Piggly Wiggly store, and it was Lynchburg’s first self-service grocery when it opened in the 1950s. This building shares a common wall with the middle building, and together they account for more than 111,000 square feet. Designing the new interior space for the Piggly Wiggly building allowed for additional creative expression beyond the carving out of loft apartments. The wide open, split-level space off the main entrance that spans the building is now under discussion to become a salon. The open stairway to the basement level remains. The sub-basement was designed as year-round dormitory space for law enforcement officers who attend in-service training at the adjacent Central Virginia Criminal Justice Academy. The top floor features penthouse lofts, and on the rooftop are hot tubs for residents and spectacular views of downtown and its surroundings.

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