In the context of the punishing consequences of the Covid-19 pandemic on business development activity worldwide, three of the large mixed use projects now in development in Falls Church are requesting potential revisions in their agreements with the City to take into account prospects for pulling back.
The first addressed by the Falls Church City Council last week involved the Falls Church Gateway Partner’s plans to develop 9.5 acres in the City’s west end, involving an adjusted payment schedule and reported in last week’s edition.
Two more came before the City Council in its work session this Tuesday that will be voted on at its next business meeting this coming Monday.
In one case, the City will be asked to OK a change in its agreement with the Mill Creek developers of the 4.3-acre Founder’s Row project, well on its way to completion at the intersection of W. Broad and N. West Streets. In that one, Mill Creek is coming with the unhappy news that the Studio Movie Grill, which had signed a lease to bring an eight-screen theatre as a centerpiece of its project, has had to file for bankruptcy and shut down all their theatres across the U.S.
In the other case, the City will be asked to agree to slightly modified language in its deal with the Insight Group developers of the 2.3-acre Broad and Washington project that has promised to be centered around a 55,000-square foot Whole Foods market at the City’s central intersection of Broad and Washington.
That project is slated for its final vote of approval from the Council this Monday, but with the uncertain economic times, the developers want to modify their promise of bringing the Whole Foods with a phrase that promises something comparable in the event Whole Foods backs out or undergoes a major change that could include a name change.
CORRECTION: This story incorrectly states that the Insight Group, developers of the Broad and Washington project, is seeking a modification to its promise to bring Whole Foods to the site. Instead, the City Council is requesting more specific language related to what happens if Whole Foods didn’t open in the project.
Neither request was met with enthusiasm by the City Council at its work session this Tuesday, as Mayor David Tarter pointed out two cases where the City was promised major retailers in connection with a large scale project that failed to materialize, both in association with the Great Recession of the previous decade.
In particular, Tarter said he was looking forward to the movie theater as something the City needs, that reminded him of his youth here when he could walk from his home to a local theater.
But Joe Muffler, the Mill Creek point person for Falls Church who has marshalled the Founders Row project for years here and is also a spokesman for Mill Creek’s ambitions to develop the Rite Aid site across W. Broad from Founder’s Row, insisted that his company remains committed to putting a movie theatre at that site. He said his company, which is the sole owner of the site, has already sunk about $5 million into the foundation for the theater complex.
He said he is currently in negotiations with a number of national firms who have expressed interest, knowing the wider success of his mixed use projects relies on something like a movie theater presence there.
As Councilman Phil Duncan pointed out, the cause of the current woes is the pandemic, and it is something that will fade with vaccines now being rushed to the public, making the market for something like a theater project even more desirable than before.
“We will get out of this. We will get back to our glory days,” he said. Mayor Tarter agreed that “there is a pent up demand for entertainment and socialization.”
“We’re aware of that pent up demand,” Muffler said. “We will turn over every stone to find a viable substitute.”
On the Whole Foods prospect at the Insight Group’s Broad and Washington project, the certainty of a final OK Monday remains in the air because of the uncertainty of Whole Foods, even though there are no indicators that Amazon, which owns Whole Foods, has any intent to change the terms they’ve already inked for the project. “We believe Whole Foods will come onto this site. They have no history of pulling out,” Insight’s Scott Adams contended.
In fact, Insight’s Scott Adams took strong issue with comments by Council member David Snyder who suggested that changes to allow, for example, more affordable housing in the project are crafted to optimize the developer’s profits over commitments to a fair deal with the City.
“Our goal is not to maximize profit,” he stressed, “But to create something of benefit to Falls Church.” He said Insight’s “hard work to resolve all the issues surrounding the project over the years” should be evidence of that.
In addition to providing a home for the Creative Cauldron local theatre performance and education non-profit, the latest willingness of the developer to accommodate a plan that could make up to 10 percent of the residential units of the project “affordable” is another major indicator.
The Council is mulling an option that the developers have agreed to that nine of the residential units will be studio apartments offered at 40 percent of the area median income and that another nine will be two bedroom units offered at 60 percent of the area median income.
Based on this plan, the developer is willing to add to the total amount of affordable units. “I’d love to hit 33 units,” Councilman Duncan said.
But Councilman Snyder said that the offer of more affordable units is not something the developer, but the City would have to pay for.