CBJ: What does the future hold on the Old Trail?

Four years ago, Albemarle County gave the green light for one of Central Virginia’s most ambitious planned developments - the Old Trail Village just outside Crozet.

Designed using the county’s Neighborhood Model to focus on a pedestrian-friendly plan that includes single-family homes, townhouses, apartments, retail space and a golf course, Old Trail won praise as the kind of growth-area project county leaders favor. But it also drew opposition from some Crozet residents who said development was outstripping infrastructure and who worried that Old Trail’s retail component, the Village Center, would hurt downtown Crozet merchants.

Early reports predicted a seven-year buildout in a project that ultimately would have 500 single-family homes, 350 townhouses and 800 apartments. Since then, a housing-based recession has gripped the nation, and stopped some local developments in their tracks.

So what’s the story at Old Trail, where recent rumors suggested the project was for sale?

Gaylon Beights, managing partner of March Mountain Properties and Old Trail’s development manager, recently discussed the project’s present and future with The Daily Progress. An edited transcript follows:

Q. In July 2005, you told The Daily Progress that you hoped Old Trail would be “a village that people come to visit, to be part of, to live in.“ Where does that vision stand now?

A. We’re making great progress. We have approximately 160 families living here now. Our first phase of the Village Center has just become a reality. We’ll be finished with construction within 30 days. The golf course is mature and has 152 regular members, plus we are a public facility. Two to three miles of our trail system, which will ultimately be about six miles, is in place. Our community swimming pool is in the ground. It will be open the end of May for Memorial Day. I would say our vision for Old Trail is consistent, is on track.

Q. An early estimate was for the development to take seven years to build out. We’ve had a recession since then, so where do things stand now?

A. It is my perspective that seven to 10 years is a reasonable time frame. But to take longer would mean only we’re affected by the market or we’re trying to do something better. The way we achieve speed in development is by having multiple price points. One of the exciting things about the Village Center is it provides us with market-rate apartments, so from apartments - and some day, to affordable condos - to affordable towns to expensive towns and then houses from the $300s all the way up to a million, too. If I can keep products in all price points, then we will be able to develop faster.

Q. Early projections referenced development of 500 single family homes, 350 townhomes and up to 800 apartment units. Is that still your target?

A. We just revisited all of that, looking at the future. One of the interesting things about the zoning the county helped us achieve, guided me to, is that in each of these blocks (referencing a map of the development that shows individual lots or blocks) I can do up to 18 units per acre. What I do in those blocks is the question. For me to tell you exactly what the final product will look like, I don’t know. But we have to make assumptions. So we assumed recently that we would have about 785 single families, 490 townhouses and ... the remainder [of 2,200 total units] would be in apartments and condominiums in two or three price points.

Q. What other changes have occurred since the founding?

A. We’re about to announce a new senior community here. It will be assisted, independent and memory care. It’ll be called Piedmont Senior Living. It will be 126 units. They will be directly behind the Village Center. The residents can literally walk across the parking lot and use the Village Center facilities. We had to get it rezoned. And with Ann Mallek, our supervisor’s, help and all the supervisors supporting us as they have from the beginning, less than 60 days from the application we were zoned and the developer buying that made his application for HUD financing, which he achieved last week.

Q. Is that development a reaction to the changing market or just evidence of the flexibility from the beginning and just something you decided to do?

A. It is both. The underlying issue is we have that kind of flexibility. It is also the changing market. What I have to do in my role for my partnership is to be creative and come up with product types in tough markets and good markets that meet the public demand, to guide us away from products that aren’t wanted or are too expensive. Old Trail has a market perception of high end, which is an irony to me when my whole goal is to have a place where everybody can live.

Back to senior living, when we began the project we did a little market study and we were not ready for that product. When David Hilliard came to me - a developer from Maryland and Vermont - and wanted to do it, we had him hire a new market study. We worked in concert with [the Jefferson Area Board for Aging] ... and got their support and determined that we will fill these 120 units within a 15-mile radius, which doesn’t even take us into the city of Charlottesville. Before we attracted the senior living component, we had already attracted Augusta Medical Center. And Augusta Medical is coming over the mountain to get in this western Albemarle market. [AMC plans a practice specializing in internal medicine.] The combination of the senior center and Augusta Medical is a perfect match. When I began this place five years ago I never imagined that Augusta Medical would come over. I never imagined I would have a senior center. So every year we wake up and say, ‘This year is the first year of our project because we have new issues, new markets, new ideas.’ And it’s really great when people like Augusta Medical, ACAC, or when David Hilliard, a developer from out of state, comes in with an idea that is fresh and one that I haven’t had before. ... He hopes to start construction in late August.

Q. What is the status of the Village Center, which has retail on the bottom floors and apartments above?

A. The Village Center is substantially complete. I would say probably 95 percent of the apartments are completely finished. In the apartment business it is very hard to lease an apartment until the mud is gone, the elevator works, the halls are clean. So we expect to kick into that true leasing activity next month through the summer. In the commercial portion we have leases for all except for 1,100 square feet. And we have signed a letter of intent for that space [April 19] to do a gourmet food/ice cream use. If that letter of intent turns into a complete lease we’ll be fully leased.

Q. Are you having any trouble with the timetable of delivering or renting the apartments?

A. We’re 30 days late. We have a detailed timeline. Dominion Power took 30 extra days to bring the power from U.S. 250 to us. That delayed the elevator bank, on and on. So we’re 30 days late. We haven’t even tried to push apartments. The surprise is that we have leased the commercial.

Q. Is Old Trail for sale?

A. It has always been for sale. My job is to sell Old Trail. I sell quarter-acre lots. I sell half-acre lots. I sell one-acre lots. I sold two commercial pad sites for businesses. I sold a three-and-a-half acre site to the senior living. I sell golf tee times. And so that’s the setup. Yes, it’s for sale. We have great momentum. And I was visiting with Steve Lehr, who is managing director of CB Richard Ellis out of Minneapolis. He says, ‘Gaylon, you don’t know how good things are at Old Trail. You ought to look at the rest of the world.’ I went to him because when you look up at the market and say, ‘My builders can’t get financing. I’ve enjoyed success. We’ve sold our inventory. We sold another, weekend before last, our fourth house of this year. I closed two lots since January. I have put seven more lots under contract since January. I’m now talking to three people to buy my 18-lot West End Square. I have momentum.’ But when I look beyond that momentum, I don’t know where I’m going to find the next big push. So with Steve Lehr and, locally, Rob Stockhausen’s coaching I said let’s put a piece of Old Trail for sale to see if ... maybe there’s a greater wisdom out there. What they have coached me into doing is saying Old Trail’s pieces are available because I will generate greater interest. There will be a menu. If you want to buy one acre, if you want to buy 50 acres, if you want to buy the next phase of the Village Center, I’m trying to keep the momentum going.

Q. Is there a wider marketing of the property? Is that what the big piece is?

A. Right now, Real Estate III markets our residential. CB Richard Ellis leases our commercial and has our pad sites. We’re simply putting it to the broader market. Steve Lehr tells me that all the funds - the hedge funds, the investment funds - cannot put their money in mattresses like people think. So what they’re doing aggressively is they’re looking to put their money in real estate. They have 1,500 funds that are their clients. And so we’re putting out information on our success to those 1,500 funds. The idea is I’ve got to create momentum. There may be one [fund] that’s interested in the second phase of the Village Center and buying it. ... So it’s not for sale in the sense that we’re rolling up our tents and moving down the road. It’s for sale because it’s always been for sale.

Q. Old Trail’s rezoning four years ago was controversial in the community, where people worried about the effect of the retail segment on the businesses in downtown Crozet.

A. In the very beginning, I wasn’t as concerned as they. I believe economics drive the world. I have to get $18 to $22 per square foot. That is a retail user that is different from someone who can pay the $10 rate in Crozet. So from my background, I know that by me achieving the higher rents here ... we drive a retail market that then supports, I call it, historic Crozet. ... So if anything, I think that simply adding rooftops will add viability to Crozet.

Q. What’s next for Old Trail?

A. We’re planning a [residential] phase that has 56 apartments, 76 townhouses and 56 small, single families. Our goal is to bring these single families on between $300,000 and $350,000. That fits the need. With the school district and the Village Center, et cetera, I think we will meet the market need and put real people in Old Trail.