Liberty officials: Plaza plans nixed

By Alicia Petska

Published: June 5, 2008

The tentative sale of The Plaza has officially been called off, according to Liberty University officials.

Financing obstacles were cited as the cause of the deal’s collapse. LU is moving on and working to secure new tenants for the midtown shopping center, Chancellor Jerry Falwell Jr. said Wednesday.

“The good news has always been this renewed interest we’ve been seeing from tenants,” Falwell said. “It’s the tenants coming in and renovating the property and bringing in customers that’s good for the city. Whether or not we sell it is just a financial decision that doesn’t really impact anybody else.”

LU remains interested in selling, but not in the near future, he added. By holding onto the development and increasing its occupancy, the school expects it could as much as double its value.

The Plaza, a former hub of Lynchburg shopping, was gifted to LU last fall by its owner. A short time later, Falwell announced they were “leaning” toward selling the property to a private commercial developer, although he cautioned that nothing was set in stone.

The deal fell through a month or so ago after the buyer was unable to secure a favorable loan agreement, officials said.

“The lending climate has gone so sour some banks weren’t lending, period,” said Chris Doyle, vice president of retail services for CB Richard Ellis in Richmond and LU’s commercial broker. “Whenever paranoia sets in, people tend to do nothing, and that’s what the banks were doing.”

The institutions that were willing to lend demanded down payments twice as large as expected, Doyle added, putting an end to the negotiations.

“That is the sole reason this deal did not transpire,” he said.

The interested buyer was Burr Ault of Ault Real Estate Group, a Washington, D.C.-based developer who owns the Wards Corner shopping center near Target.

His identity was previously concealed in keeping with a confidentiality clause in the purchase contract. On Wednesday, he said he continued to believe in Lynchburg and spoke highly of the city’s potential.

“I really am very bullish on Lynchburg and everything the city’s been doing from a master planning standpoint,” he said.

Ault’s pursuit of The Plaza sparked hope in the community that the fading shopping center would be restored to its former status as a vital commercial asset. He declined to comment on what led to the deal’s demise, citing concern about the aforementioned confidentiality agreement.

Falwell said he expected it might be a year or more before Liberty puts the property on the market, although inquiries are already coming in.

Courtship of new tenants never stopped throughout the sale negotiations, he noted, and new leases are close to being signed.

The school is focused on landing anchor tenants capable of jumpstarting and sustaining activity in the smaller storefronts. A mix of uses has been pursued, including a grocery store and an office.

Officials envision the top level of the center will be made up of retail and restaurants, while the lower level will concentrate on offices whose employees will, hopefully, take advantage of the nearby stores.

LU is also exploring the idea of moving in some of its own programs, such as its aviation classes, and has identified a possible spot for a bigger and better bus transfer station.

Announcements concerning new tenants are expected to start rolling out sometime this summer. Current tenants have long-term leases and are expected to stay, Doyle said.

“We’re hoping that, by creating a complementary mix of businesses, we’re really going to have a place that’s beneficial for everyone,” he said.

“Hopefully in 12 to 15 months, we’ll have a place where people can work and shop and eat and have a variety of choices.”