Land Revitalization Spring '08 Newsletter – Roanoke’s Industrial Core Gets Economic Transplant As Biotechnology Hub
The underused industrial core of Roanoke, the South Jefferson Redevelopment Area (SJRA), is in the process of being redeveloped into an extension of downtown that will create 2,000 jobs and a hub connecting downtown, residential neighborhoods, Carilion Clinic’s regional hospital complex and the Roanoke River.
The South Jefferson area is located at the crossroads of several rail lines adjacent to the Roanoke River. With good transportation access and a ready water supply, the area became the center of local industry in the early 20th century. This included a Virginian Railroad locomotive mechanical facility, lumber mills, a grain mill, oil and coal distributors, warehouses, a bridge and iron works, and scrap yards. The Virginian facility was closed in the early 1960s after its merger with Norfolk &Western railway, and the mixture of other industries began a slow slide into decline. Scattered businesses remain, among vacant and underused parcels, a story told in industrial cities across the country.
To turn the tide of this decline, Roanoke identified several strategic initiatives to target selected industrial sectors, encourage new development in technology industries and to build on the strong character of the neighborhoods and downtown. In 2000, the City of Roanoke and the Roanoke Redevelopment and Housing Authority (RRHA) began to reinvent its industrial core by formally creating the 110-acre South Jefferson Redevelopment Area. Their purpose is to convert blighted property into new biotechnology, medical and other mixed uses. This effort would remediate potentially contaminated properties, create an estimated 2,500 new jobs and leverage substantial private sector investment ($175,000,000 estimated in 2001). The original partners in the project included the City, RRHA, Carilion, Virginia Tech and the University of Virginia.
An additional challenge to the project is the location of the corridor in the flood plain of the Roanoke River. The design guidelines for new construction in the district require that the first floor be raised above the 100-year flood level and/or that the first floor be reserved for non-occupied uses (e.g., parking). While adding to the development costs in the corridor, these measures also serve as an engineering control that limits exposure to contaminants and offsets cleanup costs, potentially reducing overall development costs.
Redevelopment efforts began in earnest in 2004 with work on the Riverside Center for Research and Technology (RCRT), 25 acres of land at the southwest end of the corridor that will become a focus for biotechnology and healthcare-related businesses. The RCRT was the site of the Virginian Railway mechanical facility along with a warehouse and oil distributor through the early 1960s and later included other office space, building supply facilities and a ready-mix concrete plant. The RRHA is acquiring and assembling the land and initiated environmental assessment activities through the Virginia Department of Environmental Quality’s (DEQ’s) Voluntary Remediation Program (VRP).
The primary environmental condition encountered on these properties was a layer of cinder fill material associated with the rail yard that contained various metals along with some petroleum constituents. Fortunately, these issues were addressed through institutional controls (land use restrictions based on the commercial nature of the development). Human health was further protected by the site development processes including the placement of six feet of fill and first floor parking to address flooding issues.
An initial investment by the City of $20,000,000 through the RRHA to establish and administer the redevelopment area, create the redevelopment plans, acquire and assemble property, and perform environmental assessments has leveraged nearly $200,000,000 in private investment in the RCRT including:
- Carilion Biomedical Institute (incubator for biomedical technology companies)
- Carilion Clinic (consolidated medical facility)
- Parking deck
- Cambria Suites hotel
- Carilion/Virginia Tech medical school
With work in the RCRT underway, the City and RRHA are moving their attention farther along the corridor to the adjacent Virginia Scrap Iron & Metal Company, Inc. (Virginia Scrap) property. This property is strategically located along Jefferson Street, which connects the RCRT to the main thoroughfare to downtown and to the remainder of the SJRA.
This property was originally developed in 1906 as the Adams, Payne and Gleaves Lumber Co. By the 1920s the company provided a wide range of building materials for the rapidly growing city. However, during the depression the building supply business downsized and many of the structures were leased to other enterprises. In 1942, the Virginia Scrap Iron and Metal Co. purchased the yard and began what would become a 66-year occupancy.
The redeveloped site will contain a mix of uses including institutional, commercial, and potentially residential development based on the redevelopment plan for the SJRA and the City’s Strategic Housing Plan.
The City and RRHA have used EPA brownfield assessment grant funds to perform Phase I and Phase II ESAs prior to acquisition of the property. These assessments identified significant contamination issues with metals (e.g., lead) related to the former scrap yard operations as well as petroleum impacts. Executing a full cleanup to meet DEQ VRP program default standards for residential development could cost as much as $4 million.
However, by tailoring remediation to the proposed development of the property the level of cleanup can be significantly reduced. As new construction will include several feet of fill and unoccupied first floor space to address flood issues, the actual cost of the cleanup can be reduced to approximately $1.3 million. The anticipated cost to raise the elevation of the property to address flooding issues is estimated at $900,000. The reduced cost of cleanup in conjunction with flood-proofing, is much less than the cost of full cleanup.
A unique issue faced by the RRHA early in the redevelopment process is the presence of four steam locomotives at the site. As a railroad town, preservation of these locomotives is important to many residents. One unit has already been removed from the site and will become part of a railroad themed restaurant in Ohio. The Virginia Museum of Transportation is also involved with a fund-raising campaign to relocate and restore additional locomotives that were constructed in Roanoke’s locomotive shops.
The cost to complete environmental assessment, develop a formal remediation plan and initiate cleanup are still high and are well in excess of the current property value. Given these circumstances, the City and RRHA will use a subgrant from DEQ to complete the site assessment, risk assessment, and remedial action work plan through the VRP. An EPA brownfield cleanup grant will then be used to initiate cleanup activities. The City is working with prospective developers to use a brownfield revolving loan fund grant to assist with financing the remainder of the cleanup. Upon completion, approximately $300,000 of City funds, and up to $1.1 million in state and federal grants and loans can leverage as much as $70 million in private sector investment on the site.
The RCRT and Virginia Scrap projects create a model for public/private partnership that can be used as a model for the City to pursue similar projects.
Article contributed by
Ian D. Shaw, PE, AICP
Senior Planner, City of Roanoke