The former American National Bank Building at 201 W. Brookland Park Blvd. is back in the hands of the RRHA. (Jonathan Spiers photos)
By Jonathan Spiers
(RBiz) – Eight years after it was sold for a redevelopment project that never materialized, the former American National Bank Building on Brookland Park Boulevard is back in the hands of the Richmond Redevelopment and Housing Authority – though what the future holds for it remains unclear.
The nearly century-old building at 201 W. Brookland Park Blvd. quietly transferred to RRHA ownership last fall, the day before it was scheduled to go to a delinquent tax auction because of unpaid real estate taxes owed by previous owner Dixon/Lee Development Group dating to 2019.
The RRHA paid the roughly $7,800 in back taxes, legal fees and interest to prevent the property from going to auction. The property was then sold to the RRHA for $1, according to a deed recorded with the city.
The Oct. 11 transfer came three years after the city sued Dixon/Lee, after finding it in default of the terms of a development agreement Dixon/Lee had signed to rehab the building as part of an effort to spur revitalization along the Brookland Park corridor.
The development agreement included a clause that, in the event of a developer default, the property would revert to the RRHA, which had sold the building to Dixon/Lee for $20,000 as part of the 2015 deal with the city.
A default judgment against Dixon/Lee in 2020 technically allowed the RRHA to take back title on the building, but a reversion never took place. An authority spokesperson said at the time it was waiting for the city’s legal claims against Dixon/Lee to be resolved.
In January 2022, the city attorney’s office filed a complaint against 201 West Brookland Park LLC, the entity through which Dixon/Lee owned the building, to enforce a lien that had been placed on the property for the unpaid taxes.
When that filing was made, the LLC had become inactive with the State Corporation Commission and the complaint was unable to be served, according to the complaint. That initiated the delinquent tax sale process, which saw a “for sale by auction” sign posted on the property ahead of the Oct. 12 sale.
The city attorney’s office received the RRHA’s payments the day before, allowing the property to be sold ahead of the auction – a process allowed by state law and commonly seen with delinquent tax sales.
Asked why the RRHA needed to pay the delinquent taxes when the property was supposed to revert to it anyway, spokeswoman Angela Fountain said the taxes were owed and it was willing to pay them to forego the auction.
Acknowledging that the unpaid taxes were the previous owner’s responsibility, Fountain said in an email: “It was decided not to pursue the previous owner to try and recover the taxes and just pay them.”
As for what the RRHA will now do with the property, which it previously owned off and on since 1999, Fountain said that would be determined by CEO Steven Nesmith, who signed off on the transaction just days after starting with the agency.
$200,000 remains uncollected
The property’s ownership change effectively bookends a seven-year saga that started with the city entering into its agreement with Dixon/Lee, which initially proposed a mixed-use development with apartments above commercial space. That plan was later changed to use the entire building as an incubator for small businesses and first-time entrepreneurs, with involvement from Virginia Union University.
To incentivize the project, the city’s economic and community development department awarded Dixon/Lee $200,000 in grant funds, which were tied to a performance agreement with certain benchmarks. Among those benchmarks, Dixon/Lee was required to begin construction in 2016, complete work a year later and create 30 jobs.
In 2019, two years after the project was due and amid heightened public scrutiny, the city determined that none of those benchmarks had been met and declared Dixon/Lee in default. It also demanded the $200,000 back, filing a lawsuit claiming breach of contract and seeking a default judgment to recoup the funds. VUU also bowed out of the project.
A default judgment was granted in mid-2020, awarding the $200,000 as damages to the city and its economic development authority, which had provided the funds through a pair of grants.
Three years later, however, the $200,000 remains unrecovered by the city. Leonard Sledge, the city’s economic development director since mid-2019, confirmed that the funds remained outstanding as of last month.
‘We did do the project – at a different location’
LaMar Dixon, the Dixon/Lee principal and local real estate agent who is working to open his business incubator concept in a storefront on West Broad Street, said he ultimately attributes the fate of the Brookland Park project to turnover and leadership changes at City Hall and the RRHA over the years.
He said he made multiple offers to the city and the RRHA to sell the Brookland Park property to a third party in an effort to satisfy the $200,000 debt. He’s previously said the $200,000 was spent on planning and architectural design work and was used to leverage financing for projected construction costs.
While he’s maintained that he’s capable of paying the incentive money back, Dixon last month said he’d been trying to work out a deal that would remove the reversion clause so he could sell the property to another developer, having lined up at least two prospective buyers since the city’s default notice.
Copies of emails that Dixon shared with BizSense show the RRHA, under prior leadership, had been amenable to the offer and that city officials had been considering it but decided last summer not to go forward with a deal.
Dixon said that in the days leading up to the October auction, he and the latest developer he’d lined up to buy the property had offered to pay the delinquent taxes and transfer the property, but that offer wasn’t taken.
Dixon said he wasn’t looking to profit from the deal, but rather maintain equity in the property while repaying the city.
“It’s about repaying the city back with the value that I’ve put into the property,” Dixon said. “I’ve maintained the property, paid the taxes, built equity in the area by bringing a concept over.”
Dixon said he stopped paying taxes on the property in 2019 in light of the default declaration and pending reversion.
“If you’re going to ask me to revert this back or sign it over, why would I pay taxes on it?” he said.
With the property no longer in his hands, Dixon said he still intends to satisfy the debt, which he said is keeping him from being able to sell other properties because of liens tied to the default judgment.
“It’s tying me up financially to be tied to this project. I don’t know what the purpose was of not allowing me to make the city whole, but I had every incentive to make the city whole,” Dixon said.
Meanwhile, Dixon said he is awaiting a certificate of occupancy from the city to open his business incubator at 1322 W. Broad St. He applied for the certificate in mid-March, and city records show the application is on hold and awaiting more information on a fire suppression system.
Dixon said the incubator, called Capital Station, proves he’s capable of bringing the idea he had intended for Brookland Park to fruition, albeit elsewhere in the city.
“We did do the project; we just didn’t do it in partnership with the city,” he said. “That’s very important to me that people know: We did continue to do everything that we outlined, we just did it at a different location.”
