The Industrial Development Authority plans to buy the White Mill property — including the building — for $3 million.
Danville City Council will hold a first reading on whether to appropriate $1.5 million from its general fund for the IDA to purchase the property during council’s upcoming meeting Tuesday night.
The IDA board voted to purchase the property during its meeting Tuesday.
The purchase agreement calls for a first payment this year and a second $1.5 million to be paid in 2017-18. The IDA would buy eight parcels totaling slightly more than 20 acres, City Manager Ken Larking said Wednesday.
One parcel totals about 18 acres and the remaining pieces are small properties, Larking said.
In addition to the $3 million, $50,000 will pay for due diligence — property analysis — that must be complete by May 15, Larking said. Closing is expected by June 15, he said.
The IDA will cover the cost of due diligence, Larking said.
Officials believe a planned Riverfront Park would help attract businesses and industry to the property. The park would be built on four acres between the White Mill and the King Memorial Bridge across from the YMCA.
“Development potential along the river is of great importance to the city and our economic development office has identified that [control of the site] as a key step toward developing a world-class riverfront development in our city,” Larking said Wednesday.
The IDA and the city see those parcels along the river as critical for future economic growth of the area, said Neal Morris, IDA board chairman.
With the park planned in the area along the King Memorial Bridge, purchase of the White Mill property will give the city and the IDA all the property between the Union Street and MLK bridges, Morris said. “That’s really a nice piece of property through there,” Morris said.
The White Mill building is 650,000 square feet. It was constructed in 1920 and was part of Dan River Inc.
White Mill Development LLC, a subsidiary of Spartanburg, South Carolina-based Gibbs International, bought the property in 2009 and announced it was bringing 400 high-tech jobs to the city.
The total purchase price of the eight parcels was $2.4 million plus closing costs, according to the city of Danville. In addition, Gibbs spent $1.5 million to abate asbestos and lead paint in the White Mill itself and other structures that were eventually demolished. In total, Gibbs spent more than $4 million for the purchase, cleanup, demolition, legal fees and closing costs, according to the city.
The company promised to bring the jobs and $400 million in capital investment to the project over five years, but the plans never materialized.
If the purchase goes through and the city appropriates money for it, city staff will oversee a master plan process for the site. It would include public input on how to redevelop the properties, Larking said.
The city would market the site aggressively to developers for possible development of the White Mill and adjacent property, Larking said.
City officials will seek funding from a variety of sources to pay for the purchase, he said.
“However, until those funding sources are confirmed, it is recommended that general fund balance be used to pay for purchase,” Larking wrote in a council packet letter to council members.
The IDA is tasked with supporting economic development goals and objectives for Danville. The authority buys and develops industrial land and downtown properties, and acts as a conduit for incentives for projects. The IDA has led downtown redevelopment by acting on recommendations from the 2011 River District Development Plan and acquiring and redeveloping projects in the River District.
Larking said people have inquired about the property but there are no solid prospects for the site.
Linwood Wright, consultant for the city’s economic development office, said of the plan to purchase the site, “It is a very positive move for the city and gets control of major property along the river, which is probably one of the greatest assets the city has.”