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ZeroPak in the Winchester Star

Historic tax credits approved for ZeroPak apartments

WINCHESTER — A project to transform the North End's long-vacant ZeroPak apple processing and storage facility into an affordable apartment complex has cleared a major hurdle.

Winchester developer John Willingham, a former City Council president who is spearheading the conversion, said on Friday the Virginia Department of Historic Resources and U.S. Department of the Interior's National Park Service have approved design plans for the ZeroPak renovation project, making it eligible to receive the state and federal historic tax credits needed to make the apartments financially viable.

"That's a pretty monumental step for us," Willingham said on Friday. "We were kind of held up making sure that what we were proposing could be designed [in a way to make the project eligible for the tax credits]. Otherwise, we would be starting from scratch." The tax credits are critical to the ZeroPak project, Willingham said, because they can be sold at a discount — for example, 85 cents for $1 worth of credits — to investors who apply the credits to their own tax bills. Selling the tax credits and pursuing government grants, along with securing bonds and investments, is how the $30 million to $40 million ZeroPak renovation will be financed.

"There is absolutely no way this project could be completed without tax credits," Willingham said.

The plans approved by state and federal authorities call for 124 one-, two- and three-bedroom apartments to be built in the ZeroPak building at 536-580 N. Cameron St. Those dwellings would be classified as affordable housing and rented exclusively to individuals and families who earn 50% to 60% of the area's average median income, which Old Dominion University reports is $76,583 per household in the Winchester Metropolitan Statistical Area comprised of Winchester, Frederick County and Hampshire County, West Virginia.

In Winchester, more than 1,000 houses and apartments expected to be built locally within the next four to five years. The vast majority of those dwellings are intended to be offered at market rates, and those rates increase as more people express interest in moving to the region. As a result, many area residents say they cannot afford the current average purchase price of $349,900 for a single-family home or the average monthly rent of $1,500 for a two-bedroom apartment.

"Our price points are going to be significantly different, and we're targeting a big piece of the community that's been underserved for a long time," Willingham said. "Our goal is to have a lot of the same types of amenities [in the affordable ZeroPak apartments]. We won't be able to offer everything that a market rate apartment does, but it will be a great space to live." The 288,500-square-foot ZeroPak building is located on a 3.74-acre tract of land that Willingham bought in March for $875,000. He has said he eventually would like to buy another 3 acres of property across the street to build a community center for the North End, and he is also planning new construction on the ZeroPak property to accommodate 50 to 60 age-restricted apartments for people 55 and older with low incomes, but for now, Willingham's focus is squarely on renovations.

"Getting the exterior window designs, getting the interior layouts, that's really what we've been going back and forth on since November when we originally submitted our application to the state and federal historic tax credit authorities," Willingham said.

The 120-year-old ZeroPak building has been mostly vacant since the apple processing and storage business that operated it closed in 1997. Today, the heavily damaged brick facility that was charred by a major fire in 2014 is filled with debris, broken glass, graffiti and trash, and there are indications that people have been staying there illegally.

Fortunately, Willingham said, the structure still has good bones and most of its concrete and masonry are in excellent shape.

"Now that we have the designs approved, we can move forward with the rest of the construction documentation, all the stuff the architects need to do, structural engineering, sound testing. We've got an extremely large amount of environmental remediation to do," Willingham said. "Our goal is late summer, early fall to start doing things inside the building,"

If all goes well, Willingham said the first apartments could be available for rent by mid-2024.

"We're so excited," Willingham said. "This is an underserved portion of the community and we're happy to be able to provide some great renovated units and show people that affordable housing can be something to be proud of."

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