Well, citizens of Danville and Pittsylvania County, we are about to wrap up our interior demolition and clean up work at the White Mill such that we will have a clean shell to market for upfit.  This interior work should be completed by the early part of August 2010, and we will be posting photographs of the results on this blog within the next few days.  Additionally, we have begun our roof repair work to insure that the building stays dry, and we are replacing broken panes of glass in the existing windows and installing polyethylene plastic sheeting on the inside of the windows to reduce moisture infiltration into the building.  With resepct to the roof repairs, that work will be completed by mid September 2010 and is being done by A & C Contracting out of Moneta, VA.

Interior photos to follow on a seperate posting … just click the tab at the top of the blog page entitle “Interior Photos” to view the interior of the White Mill as it is today.

As of today, we are nearing the completion of our interior and exterior demolition and clean up.  We have had a very strong focus on the interior work including asbestos and lead based paint remediation and encapsulation.  While we have run into several bumps in the road and related delays due to safety issues that needed to be correct, by and large we are on schedule to complete this initial phase of our project.  We have complete all currently schedule work on the 4th floor of the White Mill building and should complete all currently schedule work on the 3rd floor within the next week.  We have lead based paint remediation and encapsulation being done on the 2nd floor, demoltion and clean up being done on the 1st floor and in the basement and storm water piping and sump pump work being done in the basement.  Once all of that work is completed, we will come back in to have all of the concrete floors vacuumed to remove the residual dust and we will complete the exterior clean up and install exterior fencing.  Our target is to have everything complete for this phase of our project, with the exception of roof repair, by the end of July 2010 which will be the one year anniversary of our acquistion of the White Mill. 

With respect to roof repairs to make the building more weather tight, we published a roof repair RFP in April with bids having been received back earlier in June.  We have now narrowed the field down to 2 bidders based on pricing and scope of work and we are now in the final phase of a negotiation to have the roof repaired, which is a process that should take about 8 weeks to complete.

With respect to potential tenants, we have ongoing dialogue with a number of potential clients on the state and national level with several site visits having been completed over the past 2 months.  We feel that once we have a clean shell building, we will be able to jump start our marketing effort in earnest.  We do have several important site visits schedule in the early to middle part of July.

White Mill Development, LLC went into this transaction with the YMCA with high hopes and a willingness to work together with the YMCA and the Danville Regional Foundation to accomplish the goal of bringing the YMCA to the heart of the downtown Danville area, as a significant benefit to current and future members of the YMCA and the citizens of Danville and Pittsylvania County, and as one of the major components of economic development and growth in the downtown Danville area. We believe statistics will show that a vibrant YMCA in an easily accessible downtown area draws current and future members to the YMCA who in turn make maximum use of the facility and the programs offered at the facility, and is essential for development and revitalization in a downtown area. In fact, we had visions of a buzz of activity at the new downtown YMCA from early morning until the late evening, which would lead to a need for new commercial, retail and housing being developed around the White Mill and YMCA projects.

When we were approached by the YMCA site selection committee back in June 2009, we were not actively trying to market or sell any of the White Mill property. However, the idea of having the YMCA on the 4 acre White Mill site was intriguing and was a win/win/win/win situation for the YMCA itself, current and future members of the YMCA, all the citizens of Danville and Pittsylvania County and White Mill Development, LLC. As such, we entered into good faith negotiations with the YMCA for the 4 acre White Mill site, and we signed a binding purchase and sale contract in late November 2009 with a refundable deposit from the YMCA that also included a 120 day due diligence period. Thereafter, we were in attendance at the announcement of the new YMCA site in early December 2009. As information, the 120 day due diligence period was structured in such a way to allow the YMCA to jump start its fund raising effort based on a very desirable site having been selected. At that time, there was significant momentum associated with the YMCA project and a very high degree of excitement because we believe most everyone understood how much of a benefit it was for all parties involved to have the YMCA on this site, for maximum utilization of the facility and programs offered by the YMCA to current and future members of the YMCA, and as a catalyst for development and the revitalization of the downtown Danville area. We believe it is the perfect site for the YMCA and the perfect site for the City of Danville and Pittsylvania County. As previously mentioned, we were not actively marketing the 4 acre White Mill site, but we quickly realized that as a location for the new YMCA, a better site could not be found for the YMCA, itself, for current and future members of the YMCA, and for the City of Danville and Pittsylvania County. The 4 acre White Mill site sits on the latest extension of the River Walk Trail, providing access to a major recreational gem to the citizens of the area, but more importantly, the 4 acre White Mill site sits at the end of the MLK Bridge, right at the gateway and entrance to the downtown district of the City of Danville. We realized that the YMCA locating on a portion of the White Mill property would be a major catalyst to development in downtown Danville by drawing people to the area (current and future members of the YMCA), who would then need to eat and shop downtown, much like what has happened in Greenville, SC, Austin, TX and other cities and towns where downtown economic development and revitalization has really taken root. While downtown economic development and revitalization in the City of Danville is not an obligation of the YMCA nor a direct benefit to White Mill Development, LLC, we as a corporate citizen of the City of Danville and Pittsylvania County realized the tremendous opportunity for the City of Danville and Pittsylvania County, and we worked diligently to help make that a reality for the YMCA and for current and future members of the YMCA, as well as all of the citizens of Danville and Pittsylvania County.

Unfortunately for all of us, and unbeknownst to most of us including our White Mill Development team, there were several members of the YMCA board that were not in favor of this transaction to build a new and updated YMCA on the 4 acre White Mill site, despite the tremendous public support that was demonstrated leading up to the December 2009 announcement, and afterwards. Since the December 2009 announcement, to my knowledge, the YMCA has continued its fund raising efforts to build the new YMCA on the 4 acre White Mill site, but has found it slow going due to the current economic conditions. Despite the current economic conditions, though, we understand that there have been several significant pledges made to this project, and we hope that the 4 acre White Mill site, being the site that had been selected, helped in that fund raising effort. Since the announcement in December 2009, it is also my understanding that the naysayers on the YMCA board have continued their nay saying. In late March 2010, prior to the expiration of the 120 day due diligence period, we received word from the YMCA board that they were having a difficult time raising the necessary funds for the land acquisition of the 4 acre White Mill site under the terms and conditions of our purchase and sale contract, but the Danville Regional Foundation was willing to work with the YMCA board to enable the process to continue to move forward, provided an interim fund raising goal would be met by the YMCA (we believe the interim fund raising goal was $2.7 million, of which $2.0 million has been pledged to date), at which point sufficient funds would be advanced to the YMCA by the Danville Regional Foundation to acquire the 4 acre White Mill site, with fund raising by the YMCA to continue. At this point, we need to be sure to clarify that the purchase price for the 4 acre White Mill site is not $2.7 million. Rather this was the interim fundraising goal that the Danville Regional Foundation had set for the YMCA, that would need to be achieved in terms of pledges, before funds would be advanced to purchase the 4 acre White Mill site. Accordingly, we agreed to amend our purchase and sale contract with the YMCA to extend the due diligence period for an additional 60 days through June 1, 2010, provided the YMCA board was willing to have their refundable deposit become non-refundable over that 60 day extended time period such that on June 1, 2010, the deposit would be fully non-refundable. We felt that it was important at this late stage in the process that the YMCA demonstrate a financial commitment to this project, so there was some “skin in the game” so to speak, especially given the fact that $2.0 million in pledges had already been received against the $2.7 million interim goal set by the Danville Regional Foundation. The YMCA board agreed to this stipulation related to its deposit, and an amendment to our purchase and sale contract was drafted and executed by all parties that still allowed the YMCA to terminate the purchase and sale contract and receive a full refund of its deposit prior to the close of business on April 9, 2010. After April 9, 2010, the deposit would begin to become non-refundable on an incremental basis.

On April 9, 2010, we received a termination notice from Hunter Byrnes with the Danville law firm of Clement & Wheatley (President of the YMCA board) on behalf of Sarah Folmar (CEO of the YMCA) notifying us that the YMCA had decided not to purchase the 4 acre White Mill site and to terminate the purchase and sale contract due to “unresolved issues”. Other than that notice of termination, and a brief conversation that I had with Mr. Byrnes after the fact, we have had only very limited discussions with respect to this project as to what happened, why it happened or how we can work together with the YMCA and the Danville Regional Foundation to try to get this transaction back on track and bring it to fruition. Yet, at the same time, while we have been inundated with inquires, I have had absolutely no negotiations of any sort, with anyone involved with the process, much to my chagrin. Subsequent to the termination notice, we have learned through third parties that the naysayers on the YMCA board had succeeded in convincing a majority of the YMCA board to terminate the purchase and sale contract, under the pretext of the YMCA board exercising its fiduciary responsibility and doing what the YMCA board perceived to be in the best interest of its members, because there was an aversion to having any of the deposit put at risk. It is my understanding that there was also disagreement on some of the terms and conditions that the Danville Regional Foundation put on the funds that would be advanced for the purchase of the 4 acre White Mill site, in the event the fund raising effort was not ultimately successful in the long run. In other words, it appears that the YMCA board, under the pretext of exercising its fiduciary responsibility and doing what the YMCA board perceived to be in the best interest of its members, did not want to take any financial risk on this project and decided to terminate the transaction, rather than risk any of the deposit that was in place when the purchase and sale contract was executed, or face any financial consequences in the future if the fund raising effort was not ultimately successful. This position leads us to think that now, the focus of a majority of the YMCA board is more of avoiding the consequences if the fund raising process is not successful, rather than focusing on what has to be done to insure that the fund raising process is successful; approaching the issue from a negative perspective rather than from a positive perspective. In fact, it is our understanding that several alternate locations are now being reconsidered in lieu of the 4 acre White Mill site, including the Langston site and a portion of the Long Mill site, neither of which will put the YMCA in the strategic center of the downtown Danville area, but both of which can provide an opportunity and a location for a new YMCA. Additionally, we have heard many rumors and innuendoes regarding some of the parties to this transaction, none of which we believe are accurate or helpful to the process, but that do call in to question the character, integrity and business ethics of some of the parties involved, which is a travesty to all, in our opinion. We don’t believe any progress can be made by the YMCA for the benefit of its current and future members, without risks being taken, when stones are being thrown, when there are egos involved or when personal agendas get in the way of progress for the benefit of all. Up until today, we had held out hope that this project could be brought back on track, that cooler heads would prevail. Unfortunately, as of today, it is our understanding that this project has died on the vine, a slow death.

From our perspective, we are very disappointed as to the outcome of this process, having gone into the transaction in good faith, only to have the transaction terminated at the 11th hour because of an aversion on the part of the YMCA board to taking a financial risk, and I think a vast number of current and future YMCA members and other citizens of Danville and Pittsylvania County should, and will, be equally disappointed. It appears that the naysayers finally found an opportunity to stop the process and had been reconsidering alternate sites prior to the termination of the purchase and sale agreement, despite the validity of the purchase and sale agreement that was in place prior to its termination, and despite the fact that these alternate sites were previously considered prior to the purchase and sale agreement having been negotiated and executed. We don’t agree with this course of action on the part of the YMCA board, for obvious reasons, but then again, we are not part of the YMCA site selection decision making process, although we did feel that we were part of the YMCA team at the onset of this process.

To be sure, no progress is ever made without financial risks being taken by the parties involved, and I don’t think this transaction will be any different. An example of this is when the City of Danville took the risk and a leap of faith to install the Mid Atlantic Broadband Fiber Optic service through the center of Danville. The City of Danville made the commitment and spent the money, and there were no known customers of this service at that time. Now, the Mid Atlantic Broadband Fiber Optic service is a catalyst for development in the downtown Danville area. It is the primary reason for the White Mill project. Despite these recent actions on the part of the YMCA board, we will continue as a good corporate citizen in Danville.

As most of you can see when driving along Memorial Drive, we continue to make significant progress on the White Mill project.  To date, we have completed …

• phase I of the outside grounds clean up
• removal of the out parcel structures and associated grading along Memorial Drive
• removal of the structures at the back of the building (clean up of this area in process)
• installation of temporary power in the building for basic lighting
• removal of flooring and concrete from most of the top 2 floors

Work that is now ongoing includes …

• phase II of the outside grounds clean up (removing trees and related growth from the berm behind the building along the Dan River to improve visibility – scheduled to be completed by mid February 2010)
• continued interior demolition and clean up including removal of all asbestos, PCBs, and related hazardous materials (we will retain all historic architectual features and interior office areas - scheduled to be completed by end of May 2010)
• continued exterior demoltion and clean up (scheduled to be completed by end of March 2010)

Currently planned work that remains includes …

• lead based coatings remediation and encapsulation (projected completion date in mid July 2010)
• repairs and improvements to the basement drain and sump pump system to eliminate water in the basement area during periods of heavy rain

In addition to the above, we have completed some basic marketing material for the site including a video of what we hope the site will look like when completed, and we are still actively working with the Danville YMCA on the 4 acre property sale as the location for the new downtown YMCA.  With respect to the YMCA, we had hoped that the transaction would include a small parcel of property that is owned by a third party, and that was not a part of our original acquisition, but would work well with our overall plans, with that parcel to be included in the YMCA transaction in a manner that would lower the actual out of pocket cash component to the YMCA.  At this point, it is looking less and less likely that we will be able to incorporate that small parcel into the YMCA transaction due to some reluctance on the part of third party property owner, although we hold out hope that the third party property owner will come around to participate in a win-win-win situation for all concerned.  Fortunately, we have a contingency in our agreement with the YMCA to allow the 4 acre transaction to proceed without the small parcel, although at a higher cash component, which puts added pressure on the YMCA fund raising effort.

All in all, we are pleased with the progress that has been made to date, and we have some significant milestones that need to be met through the first half of the year.  Thereafter, we hope to be in a position to begin outreach to potential tenants in need of technology space. 

Please post your questions and comments to I can provide responses.

White Mill Development, LLC has completed the purchase of the final outparcel property along Memorial Drive from MC Martin Properties, LLC. The parcel, located at 330 Memorial Drive, was the former home of a tattoo parlor and a beauty salon.

As of our 09/11/09 bid deadline for the initial 5 work projects related to the White Mill revitalization, a total of 11 contractors made bids on one or more of the individual projects.  Those 11 contractors are as follows, in no particular order …

1. A.L. Yeatts General Contractors, Inc. – Keeling, VA
2. Sellers Brothers, Inc. – Danville, VA
3. M.R. Dishman & Sons, Inc. – Danville, VA
4. Sneads Land Maintenance – Danville, VA
5. CLC, Inc. – Lynchburg, VA
6. D.H. Griffin Wrecking Co., Inc. – Greensboro, NC
7. S.B. Cox, Inc. – Richmond, VA
8. White’s Construction Company – Sutherlin, VA
9. Kirkland, Inc. – High Point, NC
10. J.W. Demolition, LLC – Charlotte, NC
11. Improvements Unlimited, LLC – Lerona, WV

After careful review of the individual bids, on 09/18/09, White Mill Development, LLC elected to combine all of the demolition work into one contract which was awarded to J.W. Demolition, LLC out of Charlotte, NC with the outside grounds clean up contract being awarded to CLC, Inc. out of Lynchburg, VA.

The bid package for our next major work project is currently being drafted and should be available for bidding by mid October 2009. This next project will include the following major tasks …

1. Remediate and remove all remaining lead based paint
2. Remediate and remove all remaining asbestos asbestos containing materials including floor tiles in office areas
3. Remediate and remove all remaining hazardous and controlled materials including PCB containing transformers, if any
4. Remove 4th floor penthouse area currently housing filtration equipment and low ceiling height storage – existing windows to remain
5. Install stairs from 4^th floor to the roof for access to the roof
6. Remove all built in office areas on all floors
7. Fill all machinery pits to slab level on 1st floor
8. Remove all lavatory fixtures in bathrooms and capping of  drains and water lines in all bathrooms for future reuse
9. Remove of all ceiling fixtures, fans, filtration equipment, machine parts, ductwork, etc. leaving the ceiling areas clear
10. Remove all inter-floor air plenums formerly used for HVAC and lint filtration and install safety guard rails and kick plates for future reuse
11. Remove all fire protection and sprinkler piping
12. Remove all  remaining conduits, wiring, transformers and power distribution equipment including those transformers containing PCB’s (subject to partial reuse as described in item 14 below)
13. Remove exiting substation at the rear of the White Mill building
14. Installation or reuse of some wiring, conduits, switches, etc. and high pressure sodium lighting on all floors for basis lighting and low voltage receptacles tied in to new pad mounted transformer to be installed in the back of the White Mill by the City of Danville, VA with all lighting and elevators to be wired back to a distribution panel on the first floor

As of September 9, 2009, White Mill Development, LLC is pleased to announce that it has successfully completed the purchase of the Allen Shoe Shop property located at 326 and 328 Memorial Drive, the WGJ, LLC property located at 320 Memorial Drive, the Placemakers, Inc. property located at 318 Memorial Drive and a vacant lot on Memorial Drive owned by Nannie G. Armstrong. Additionally, a closing on the MC Martin Properties, LLC property at 330 Memorial Drive is pending.

We had very successful pre-bid meetings for local and regional contractors interested in placing bids on the initial 4 projects related to the White Mill. Bids are due by 09/11/09 at 5:00 PM and encompass clean up and ongoing maintenance of the outside grounds, demolition of structures on Memorial Drive, demolition of structures external to the White Mill building and removal of the wood floor inside the White Mill. We had somewhere between 20 and 30 contractors in attendance.

Additional information related to these projects including a survey of the White Mill property, lead based paint assessment and floor plans for the White Mill building are available from the owner. To obtain this additional information, please send a request to …

John Gieser at White Mill Development, LLC
E-mail: jgieser@gibbsinternational.com
Phone: 864-439-8752