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BizSense Beat: Nov. 17, 2023

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BizSense Beat is a weekly collaboration between VPM News and Richmond BizSense that brings you the top business stories during NPR's Morning Edition on Fridays.

Here’s a recap of the top stories for the week of Nov. 17, 2023:

JLARC OKs VCU Health review in light of failed downtown project
Reported by Richmond Bizsense’s Jonathan Spiers

VCU Health’s costly exit from an ill-fated downtown development project is set to get a closer look from officials on both the state and federal level.

On Monday, the Joint Legislative Audit & Review Commission, the oversight agency of the Virginia General Assembly, included the health system among topics it approved for in-depth study in the coming year.

The study will focus primarily on VCU Health’s governance structure in light of the aborted redevelopmentof Richmond’s old Public Safety Building that required the health system to pay $73 million to exit, along with ongoing costs that continue to add up.

The $100M question: Why was doomed VCU Health development’s loan amount so high?
Reported by Richmond Bizsense’s Jonathan Spiers

The disclosure this spring that VCU Health System had to pay $73 million to back out of a costly downtown development project revealed another financial detail that has kept some observers scratching their heads.

When the health system released, in response to Freedom of Information Act requests from Richmond BizSense, its so-called defeasance agreement with the project’s capital providers that wound down the development and stipulated the payment, it also revealed an additional, previously unknown and eye-catching number: $425 million.

That was the amount of the loan that was secured to finance the redevelopment of the city’s old Public Safety Building, even though the proposed multi-building high-rise office complex that VCU Health was to anchor had been budgeted to cost no more than $325 million.

That $100 million difference has drawn scrutiny from some real estate professionals who have experience with such deals.

Kinsale looks to transform corner of Staples Mill and Broad with massive development
Reported by Richmond Bizsense’s Mike Platania

It turns out that Kinsale Capital Group is planning more than just an office renovation on the land it owns near Willow Lawn.

The publicly traded specialty insurance company led by CEO Michael Kehoe, with the help of Marchetti Development, is planning a $450 million redevelopment of the former Anthem Inc. campus at the northeast corner of West Broad Street and Staples Mill Road.

According to documents filed in Henrico County, they’re looking to build nearly a million square feet of new construction on the 29-acre plot, with plans for 692 apartments, a 147-room hotel, more than 350,000 square feet of new office space and over 32,000 square feet of street-level retail.

Kinsale and Marchetti Development, a local firm led by father-son duo Joe Marchetti Jr. and Joe Marchetti III, are seeking a provisional-use permit to green-light the project. Their request was heard at the Henrico Planning Commission meeting Thursday night, where the commission unanimously recommended approval.

Castleburg Brewery tapping out after nearly 8 years in business
Reported by Richmond Bizsense’s Mike Platania

Another Richmond brewery is closing its doors.

Castleburg Brewery and Taproom is preparing to cease operations next month at 1626 Ownby Lane after nearly eight years in business.

Owner Karl Homburg said rising costs, namely rent, led him to the decision to close. He said he was set to renew Castleburg’s lease at the end of the year when he got a notice that his rent would be going up 80 percent.

Castlesburg is one of the region’s smaller breweries, operating in about 4,200 square feet in a strip center down the road from Hardywood Park Craft Brewery’s original location.

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