Columbia developer in another tussle over historic building development

As Columbia developer Tom Prioreschi ends a long legal battle with the city of Columbia over a historic renovation project, he is fighting a similar battle with the city of Norfolk, Va.

Virginia officials have grown weary of delays in Prioreschi’s plan to convert the leaning, 109-year-old Granby building that sits, covered in scaffolding and netting, in a dominant site in Norfolk. He has a $4.8 million plan to construct apartments that downtown workers can afford and add retail businesses at the street level.

After pressing Prioreschi earlier this year on when renovation would begin and whether he is assuming liability should the building topple, Norfolk leaders have ratcheted up the pressure.

This month, Prioreschi’s development company for the project, formerly U.S. Development and now Savoy Apartments LLC, was accused of a dozen misdemeanor criminal violations that primarily claim the developer is doing too little to keep parts of the exterior from falling from the eight-story building to the streets. The citations also assert the developer has failed to properly maintain the foundation, the roof and the interior.

Prioreschi told The State newspaper late last week that he remains hopeful the aging building will be restored as planned, but possibly under new ownership.

“The Savoy is now for sale,” he said, adding he has a less than 25 percent stake in the ownership of the building along with Virginia owners he declined to name. “There has been interest but no offers.”

Selling the structure is “one of multiple solutions we’re pursuing,” Prioreschi said of the tensions with Norfolk officials. The Granby building went on the market during the week of Aug. 9, he said.

“I’ve never seen a project, ever, that’s gone perfectly,” the veteran developer said. “There is always a hair in it. We’ll solve this.”

In Columbia, the dispute was more than a hair.

A protracted legal tussle with the Columbia Development Corp. over refurbishing of the fire station that once was headquarters of the city fire department has ended with Prioreschi selling the historic building for $2.4 million to Wheeler Real Estate, based in Virginia.

The Columbia corporation, a quasi public organization that helps guide and promote development in the Vista and the city center, had been seeking to foreclose on the fire station that Prioreschi bought in 2008. Prioreschi planned to convert the building into office, residential and retail space. Columbia Development Corp. bought the building in 2011 to forestall a BB&T bank foreclosure on the initial loan. The corporation said Prioreschi failed to make a single mortgage payment after Columbia Development stepped in.

The Virginia company has not detailed its plans for the Senate Street fire station. But a spokeswoman last week said that offices, restaurants and retail are possibilities for the historic building in the Vista.

Norfolk takes tougher stance

Meanwhile, Prioreschi is appealing the misdemeanor citations filed by Norfolk officials. He is facing fines totaling $30,000, and a court hearing is set for Sept. 25. The citations stem from 25 building code violations the city filed but the repairs were not made in time, according to the Virginian-Pilot newspaper of Norfolk, which has covered the dispute. The city elected to turn 12 of those code violations into criminal summons. Norfolk officials still can choose to proceed on the remaining code violations, a city spokeswoman said.

Prioreschi said he was shocked by the city’s decision to take him to court over 12 alleged safety violations.

“There are 150 things that need to be fixed, not 12,” Prioreschi said of the building. “We were kind of amazed because it’s an empty, old building that we’re trying to renovate. I’m confused as to why they took that approach ... maybe to try to goose us.”

The building – known locally as the “Leaning Tower of Granby” and The Savoy – was sealed and public access stopped in December 2011. The previous owner, who bought it in 2004 with plans to build condos, collected a series of code violations before he sold it to Prioreschi, according to news accounts.

Prioreschi’s group bought The Savoy for $1.65 million in April 2013 from a developer who had similar problems.

Norfolk’s planning director, George Homewood, told city council in February that the building poses a public safety hazard. “This means pieces can fall off the building,” Homewood said as Prioreschi listened.

Under questioning by Councilman Andy Protogyrou, Prioreschi said that start and completion dates depend on completing the financing, which includes development tax credits and construction loans. He did not say at the time when the money would be available because he had to resubmit applications.

Protogyrou pressed the developer. “We need you to finish this building and get it done,” the councilman said. The council meeting followed a statement by Mayor Paul Fraim to the Virginian-Pilot that he had lost faith in U.S. Development’s ability to handle the renovation.

Hopes for a settlement

Prioreschi told The State newspaper he hopes an agreement will be reached before next month’s court date in Norfolk. “These are not unsolvable things,” he said.

In his appeal of the 12 citations, Prioreschi contends the city has misread its own codes, made increasing demands and is ignoring the “fortune” he has spent upgrading the structure, which has leaned 2 to 3 degrees since its construction in 1906.

Prioreschi, who has not spoken to the Virginian Pilot, repeated to The State much of what he spelled out to the city in a July 22 letter.

“We are of the very strong opinion that we have been grossly wronged by the position taken in this most recent correspondence from Norfolk,” Prioreschi wrote. “We also believe that due to the efforts we have exerted that the building is not ‘unsafe’ to the public, and in fact is in the safest position that it has been in very likely more than 15 or 20 years.”

Prioreschi said that shortly after closing on the renovation plans, the city presented him an engineering report, done April 9, 2015, that listed a series of repairs that needed immediate attention. He contends the city “negligently withheld” the report until after the closing.

The Norfolk city attorney handling the dispute was out of the office all of last week and is the only staffer authorized to discuss the case with the media, a Norfolk spokeswoman said.

Prioreschi said in the letter that the developers have spent some $560,000 seeking to meet the city’s requests.

This story was originally published August 22, 2015 at 7:39 PM.