New digs: CFA Inst. taking over old Martha Jeff
The old campus of Martha Jefferson Hospital is getting a new owner that plans to turn the hospital into a job-producing machine– and in the process make the place the first local example of another machine, one that skewers sewer bills and processes waste nearly naturally.
An international financial organization already headquartered in the greater Charlottesville area, the lead tenant is the CFA Institute, a non-profit company that oversees America's financial professionals. And that has state and city governments joyously handing out incentives. If it all works, everyone gets richer (except perhaps Albemarle County, which is the current home to the company).
City officials, especially, are relieved the soon-to-be-vacant hospital– Martha Jeff moves this August– won't become another empty and derelict structure like DeJarnette Sanitorium in Staunton. There's talk of high-paying jobs.
Indeed, as the 2009 tax return (the most recent available) shows, the CFA Institute had 15 positions paying above $300,000, with the top job paying a cool $1.3 million.
The company, which has roots in Charlottesville dating back to the early 1960s, has 105,000 financial professional members worldwide. It's paying $24.5 million to current owner Octagon Partners to redevelop the main buildings into an operations center for its 350 current and 45 arriving local employees.
"We looked at sites across the globe," says Tim McLaughlin, CFA's CFO, in a phone conversation from his current office at Fontaine Research Park. The Martha Jefferson property made the most sense financially, says McLaughlin, (though he also stresses the "good corporate citizenship" of keeping it from going vacant).
Governor Bob McDonnell has heralded the deal for its promise of 45 new positions in a job-hungry climate and threw in a $200,000 grant from the Governor's Opportunity Fund.
Back in February, the City voted to use the same incentive it used to entice WorldStrides to move to the now under-construction Waterhouse, something called "tax increment" financing.
That means the new owner gets a 10-year, 50-percent discount on the increase in property taxes attributed to the new construction. In return, the developer has to build and bring in jobs, says Aubrey Watts, Charlottesville economic development director. In CFA's case, that will be nearly 400 jobs– even if most of them already exist just over that border known as the city limits.
"It has to be a significant investment in the city," says Watts. "We don't lose any money on this. And we'll get at least 50 percent of the new value created."
One other taxpayer-funded incentive likely part of this deal is historic tax credits. Octagon Partners, which bought the eight-acre parcel last September for $6.5 million, has quite an affinity for such gifts from the taxpayers, having used them to help fund the renovation of Charlottesville's Hardware Store and Staunton's Gypsy Hill Place.
How exactly that might work at Martha Jeff where only the 1929 Patterson Wing appears to carry much historic patina could not be learned, as Octagon did not respond to an interview request. However, Watts seems to think that even the mid-Twentieth Century additions– bland brick boxes that appear ready for total overhaul– might help qualify for the tax credits, which as the Hook's Dave McNair found in recent cover story, are largely used for enriching the owners of upscale houses.
According to the CFA's McLaughlin, the main building gets a new skin and LEED certification. Elevators will be moved to a seven-story atrium, and the main hospital buildings will be transformed into 136,000 square feet of Class A office space.
"It won't be a lavish building– we're frugal by nature– but it will be a nice Class A building," says McLaughlin. "We intend to strip the hospital down, leaving concrete slabs."
He mentions one other innovative feature: a Living Machine. An organic system, the Living Machine processes wastewater on-site and thereby avoids the double-digit annual increases that have been imposed locally for sewage treatment by the RWSA, the Rivanna Water and Sewer Authority. Former Daily Progress publisher Tom Worrell owns the company that makes the systems.
As reported in the Hook, the Living Machine is basically a man-made, turbo-charged tidal wetland. Waste water is pumped, filtered, and monitored by microcomputers, through a series of cells that use plants in porous gravel to cultivate natural microorganisms that eat up the waste. The cells continuously fill and drain, mimicking the tidal action of estuaries.
The system is so well regarded that the U.S. government has installed one at a Mexican border-control facility. And, earlier this year, the San Francisco Public Utilities Commission (the RWSA of the City by the Bay) announced that it would be featuring a Living Machine system in its new 13-story headquarters.
With CFA as the site's anchor, two other buildings remain to be developed, the Rucker Building and the Cardwell Center, which are on the circle drive that's currently the hospital's entrance off Locust Avenue. A dream addition for the Institute would be a hotel in those properties to house the hundreds of financial professionals who flood the town every summer to grade the essay portion of the Chartered Financial Analyst exam.
The program and its coveted CFA certification are the "gold standard" for investment analysts, says McLaughlin, who stresses the organization's emphasis on ethics and education, particularly in light of the recent world financial crisis.
The Martha Jefferson neighborhood can say goodbye to screaming sirens 24-7. Instead, the facility will house a bunch of quiet eight-to-fivers, says McLaughlin.
Once the CFA Institute arrives in spring 2013, the city anticipates increased sales, meals, and personal property taxes. And despite the tax-increment financing, it'll actually throw off more property taxes– since it was paying zero previously.
"It's going to put more residents to work and create well-paying jobs," says Mayor Dave Norris. "CFA is the anchor tenant we've been hoping for. It means that site won't sit vacant, and it will be the catalyst for further development."– with additional reporting by Dave McNairAttached Documents: