38°Clear

Tetra Building to Cost $2.65M, RA Board Says

by Karen Goff February 10, 2015 at 3:00 pm 16 Comments

Tetra Building in Reston/Courtesy of Tetra Reston Association’s Board of Directors estimates that purchasing the former Reston Visitors Center will cost $2.65 million.

The board announced late last month it is looking into purchasing the building, which currently houses Tetra commercial real estate.

The 3,200-square-foot building, which was the Reston Visitors Center from 1982 to 2003, sits on 3.47 acres near Lake Newport and several RA recreational spaces.

Ultimately, the decision to purchase the building will depend on results of a community referendum. Public hearings on the subject Feb. 26 and March 26, RA said. The referendum would take place in April. If it passes, RA would like to close the deal in July.

At a special meeting on Monday, the RA Board discussed some of the details of the transaction, including revenue estimates, mortgage terms, potential uses and the exact wording of the referendum question.

The referendum question will read:

Should the Reston Association, acting through the Board of Directors, be authorized to:

  1. Purchase the Tetra property, inclusive of land and improvements, located at 11450 Baron Cameron Avenue, Reston, VA 20190 in the North Point District as an addition to Common Area pursuant to Article IV, Section IV.10 of the Reston Deed; and,
  2. Borrow up to $2.65 million on behalf of the association to make the purchase and repurpose the property for future community and recreation uses?

Some other key points to be included on a fact sheet on the issue:

Money — The association will borrow $2.65 million, based on a recent appraisal. RA Chief Financial Officer David Harris said preliminary financial terms include a zero interest down payment and financing of the entire purchase price at 3.45 percent. The term would be a 20-year amortization schedule, but the loan matures at 10 years and would need to be refinanced at that time. Harris said that is standard in commercial deals. There would be $16,000 in loan costs at settlement.

RA will get $650,000 from developer proffers that will cover repurposing costs. RA CEO Cate Fulkerson said she could not name the developer or the project yet, but that the association is close to an agreement. If the referendum passes, RA hopes to close the deal in July.

RA’s Parks and Recreation Department projects $123,000 annually from facility rentals and net income.

Property taxes are $19,500, but once the space is converted to RA common area in 2016 it would no longer be subject to property or real estate tax. Insurance would be about $1,500 annually. Cleaning costs would be $10,000 a year. Estimated repair and maintenance costs are $5,000. Utilities about $15,000 a year. Trash collection, $2,000 a year. Harris estimates those costs would rise by about 3 percent annually.

Tetra will lease back from RA through end of 2015. The company would also pay cleaning and utility costs during that time.

Capital improvements will take place first six months of 2016.

Annual cash flow figures show a positive flow the first four years. In 2019, there would be a negative flow that would result in an impact of just under $3 per member assessment, said Harris. The following year it would be just under $4 per member.

However, assumptions are being made using current association members, including the soon-to-open apartments at The Harrison. There will be hundreds more members coming into the association when Crescent, Reston Heights and other new housing is completed, said Fulkerson.

Potential Uses — RA will solicit member input to determine best recreational and commercial uses of property. Some of the suggested uses, Fulkerson said, could include holiday and break camps, after school programs, event and meeting rentals, extended child care for camps, art and fitness programming.

Fulkerson said the building would not be used for RA staff offices.

“This is for community and recreational space,” she said.

Master Plan Designation — The building is in the current Reston Master Plan as a convenience center, which means it could be used for a variety of purposes, including retail and restaurant.

The original plans for the building approved years ago include a second story addition that could make a 6,930-square-foot restaurant, RA officials said. The restaurant would also be allowed to construct up to 50 feet into Lake Newport.

RA is working to remove the convenience center plan under the ongoing Reston Master Plan Phase 2 draft. RA attorneys are recommending the plan designation be changed to limited office and community use whether RA purchases the property or not.

  • Tetra Packed

    What would be the purpose for RA to acquire this building? I’d much rather see the 2.65 million go towards maintaining and renovating current RA properties (pools).

  • RestonRed

    To purchase the building without a specific plan seems risky at best and wasteful at worst. For that building to truly serve the recreation or fitness needs of the community, it must be much larger (more than adding another story). Parking and access are also problems with that site. I think it will end up being more RA office space, as Reston increases population with the Lake Anne redevelopment just across the street, and increased town center and Reston Heights developments. Or it will be a half utilized space for activities similar to the space at Lake Anne.

  • LTRestonRes

    That appraisal seems awfully high. That building is very old and needs a lot of work to bring it up to contemporary standards. I find it hard to believe that the current depreciated value of the building is more than $400,000. That would make the underlying land close to $1,000,000 per acre. As a retail development piece this property is far from ideal. I would think that the highest, best and most probable use would be residential…. I think that the appraisal needs to be examined more closely and perhaps compared to one or two other appraisals before RA signs off on that value.

  • Robert Mowbray

    I hope that before we spend money on a referendum, someone will explain why RA should purchase this building. The description of what the buliding will be used for is very hazy. Sounds like the Board has decided it wants to purchase the building and is now looking for something to do with it.

    • FULL TIME BOJANGLER

      Yes, the article says Cate is close to an agreement with an undisclosed developer on a secret project. Why should we be suspicious? What is their hurry to slam this deal together>

      • Guest

        Yes, of course, it’s part of RA’s vaunted “TRANSPARENCY”: Tell them NOTHING!

      • Karen Goff

        It’s not a secret project. It is a current project, she just could not say which one. Likely money from Comstock for Reston Station. But good question about why the hurry. I think the rush has to do with the master plan process. If they don’t lock this deal down while that his happening, the space will also still be designated a convenience center. They fear someone coming in and opening a 7,000 SF restaurant.

        • FULL TIME BOJANGLER

          They seem to have financing in place and future operating costs and revenue projections already completed. They have a plan and they should tell us what it is. Why are they spending time and money (Fulkerson’s time is quite expensive) putting this all together way before any public comment or referendum takes place? I’ll tell you why. They will do what they want no matter what the membership thinks.

      • guest

        You do realize that it’s not possible to negotiate deals in public right?

  • Tennis anyone?

    Maybe it would serve as a pro shop and cafe for all the courts there. I can’t see what else it would be useful for. Residential? not really.

    • Karen Goff

      It is not designated residential. RA sees it has community and recreational use ie, meeting rooms, fitness classes, rentals for parties, etc. But ultimately they say they will ask the community what it wants to see.

  • east297

    What a joke…RA needs more bureaucracy space! VOTE NO on this proposal!

  • CG

    I am so excited that RA is purchasing the Tetra property. I walk around Lake Newport in the summer time and walk by this property all the time. It is beautiful; it overlooks the lake with a beautiful view of the lake. It is a wonderful place to host events and will generate revenue for RA by renting out the space for parties. The parking lot next to it is always empty. In the summer time, the Reston Camps can use the facility as an extension to Brown’s Chapel when they need an indoor place for the kids. They could have an art gallery just like the Lake Anne facility but in a beautiful setting. I remember when it was the Visitor’s Center and never understood why RA gave it up to Tetra.

  • LT

    It’s better than an office building.

  • Cluster Tycoon

    sell low buy high, at the top of the second housing boom wow someone attended my class and actually paid attention.

  • Lake Anne Zorro

    Why is it that no one seems interested other than the RA folks spending other peoples’ money? At one time, the Tetra owner floated the idea of a nice restaurant on the site–there was such blowback from that intensely NIMBY neighborhood that he dropped the idea. That neighborhood has a long history of defeating all manner of projects–schools, community centers, a modest indoor tennis facility. Nothing other than office such as is there now, or perhaps a little professional building (plastic surgeons might do well in this neighborhood) will ever be built on that site.
    Why not let the market decide–instead of RA tripping over itself to enrich the developer who has no other use or buyer for it, why not let it sit and see if other serious interest surfaces at what price? $2.65 million is certainly no deal for such a limited use site.
    Anyway, if RA needs land, why not use that lovely 1.2 acres strip gutter property across Baron Cameron from Tetra that RA got in the famous land swap recently. Valued at just under $2.6 million by the same RA-contracted estimator, right? There, problem solved!

×

Subscribe to our mailing list