Uptown real estate market is hotter than ever |
Uptown Martinsville is undergoing a metamorphosis with properties changing hands at rate unprecedented in recent memory, and new people with new ideas are leading the transformation.
The three largest property owners of the uptown area are the Martin, King and Pearson families. As a matter of full disclosure, the Martinsville Bulletin rents the building at 19 E. Church St. from the Martins.
While the Pearsons operate the Shindig Uptown Bistro at 37 E. Church Street uptown, and the Martins continue to market and rent their buildings, The Kings have begun divesting themselves of their real estate holdings.
“We need to retire again,” said Dr. Mervyn King. “We enjoy traveling, and my wife is recovering from a coronary artery bypass, so we decided to get rid of some property. It’s less maintenance.”
Over the past year, the Kings have sold buildings to Natalie Hodge’s Elevated Milestones LLC, Jeff Sadler’s Burch Building LLC and Herb Atwell and Peggy Donovan’s Renewable LLC, and they have entered into an agreement with Derrick Ziglar, who has Ziglar Properties LLC, for the purchase of a portion of the Jefferson Plaza.
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Ziglar, who is on the board of Uptown Partnership, is a 2011 Martinsville High School graduate and 2015 Virginia Military Institute graduate. He has lived in Staunton and Dallas, Texas, before returning to Martinsville, and on August 31, 2021, he announced on Facebook: “Today I officially own Jefferson Plaza, and the Setback Building” (property adjoining the Jefferson Plaza).
Ziglar is marketing and managing the property, but he is not yet officially the owner.
“We are working on the back end of the agreement,” said Ziglar by telephone earlier this week. “It will all be settled soon.”
Said King: “He [Ziglar] will get everything but the first floor and Hugo’s. That I’m going to keep.”
Hugo’s Restaurant and Sports Bar is a popular restaurant uptown and has been owned and managed by Aman Sarwary since 2006.
Ziglar, who is 29 years old, says he first developed an interest in real estate when he saw a friend developing a townhouse.
“I asked questions, got more interested and learned about the power of investing and the ability to have wealth,” Ziglar said. “I didn’t have money, and I wanted to change my financial trajectory, so I saw this as a way for me to help my mom and family out even though I had a pretty good job.”
Ziglar said he started learning everything about real estate that he could and “connecting with people who have the financial resources.”
He has created two limited liability corporations (LLC). “In real estate, when you do it correctly, like an LLC and you don’t commingle funds it offers you a layer of protection,” said Ziglar. “If you get sued by a tenant, it doesn’t go against your personal things.”
Another benefit of forming an LLC is the ability to add and divest investors as part owners of a property, he said.
“I found people that have money, but don’t have time,” said Ziglar.
With plenty of time but very little money, Ziglar said, he did the work putting together projects and developing them and, in turn, was paid in “sweat equity,” an investment term that applies to someone who becomes a stakeholder in a company as compensation for the giving of their labor and time, rather than money.
Property records confirm that Ziglar has owned three properties either in his own name or as Ziglar Properties LLC.
Staunton County records show that Ziglar bought a townhouse in May 2018 for $140,000 with an FHA loan for $134,284.
Dallas County, Texas, records show that Ziglar bought a house in January 2020 for $175,532 with a Federal Housing Administration (FHA) loan for $173,794.
FHA loans are backed by mortgage insurance. A traditional bank loan typically requires a 20 percent deposit for residential real estate loans and 25 percent for rental and investment property loans, while the FHA will insure riskier loans for primary residences with down payments as low as 3.5 percent.
Ziglar Properties LLC in Martinsville purchased a house at 800 Princeton Street for $30,000 on June 25, 2020, with a $34,400 loan from American National Bank, according to a deed of trust on file with the City of Martinsville.
Records with the City show the property was sold for $53,000 on December 20, 2021.
Ziglar told the Bulletin he is also an investor in “a couple of properties in D.C. and North Carolina,” but he declined to divulge the details.’
The Jefferson Plaza has a tax-assessed value of $589,600.
In a December article in the Henry County Enterprise, Ziglar said he planned to give the Jefferson Plaza a $5 million renovation, which would require La Plazita to move out, but Hugo’s Restaurant and Sports Bar would remain.
“We’re really working from the top floors down with a mix of businesses,” Ziglar told the Bulletin. “We are still working through the feasibility and analysis, but I want to create a gathering space where people can enjoy a variety of food and drinks that’s not currently offered here. This will bring more people uptown and complement the other businesses and entrepreneurs.”
Jeff Sadler came to Martinsville from Richmond in the summer of 2019 as the new Martinsville-Henry County Economic Development Corporation Housing and Revitalization Coordinator, a role created and funded by The Harvest Foundation.
“I’m a consultant with a background with the state’s revitalization office,” Sadler said.
Involved with the Five Points housing project in Martinsville, Sadler said, he now spends most of his time “advising people on doing very difficult historic rehab projects from financing,” primarily with historic tax credits.
Now Sadler has one of his own.
Burch Building LLC, which lists Sadler and Christopher W. Francoise, purchased the former McCollum-Ferrell building at 18 East Church St. for $175,000 in June 2021 from the Kings. That building has a tax-assessed value of $107,800.
A deed of trust on file with the City of Martinsville, dated June 29, 2021, shows that the Kings are financing $140,000 of the purchase price through interest-only payments through May 15, 2024. The balance of $140,000 will be due on June 15, 2024.
“I showed this property to a whole bunch of people,” said Sadler. “It’s too big of a project just for somebody to do right because it’s expensive. So I brought in a couple of partners and with a good tax attorney and the use of historic tax credits, we can make this work.”
Other properties uptown that have successfully been renovated using historic tax credits include the former Henry Hotel and the Chief Tassel Building. In addition, the old A&P building on Fayette Street is being renovated and converted to apartments and retail space using a similar financing formula.
Sadler said plans are in the works for seven apartments in the old McCollum-Ferrell building with mixed use providing for office, retail and storage space. Asbestos removal has just begun and, Sadler said, they hope to be open within a year.
“I think more significant is people like Derrick [Ziglar], Lee Prillaman [who bought the Holt Building from the Kings in 2016 for $250,000] and Natalie [Hodge] who have moved back to the area and are making investments,” said Sadler. “They have come home.”
The Kings had been renting to Natalie Hodge the property at 30 W. Main St., but on May 9, they sold it to Hodge’s Elevated Milestones LLC for $160,000. The building has an assessed value of $61,400, City records show.
A deed of trust dated May 9 shows owner financing of $128,000. The mortgage note is to be paid in full by May 2025.
“It’s an ideal location for a business, and it has a deluxe apartment,” said King.
Hodge is the recent local first-place winner of The Gauntlet business competition, with local participation sponsored by Uptown Partnership, an organization of which Hodge is a founder and officer.
Hodge has announced plans to use her $20,000 cash winnings along with $9,000 in in-kind services to expand her business with the property she now owns.
“The lower level will be RGM [Rudy’s Girl Media] Studios as we transform this into a media production space,” said Hodge. “When this is done it will be something that any member of the community can use.”
Through her media company, Hodge has produced programs including the short films “Sell” and “Crowns” and the web series “Hometown Hustle.”
The greatest amount of money changing hands in the list of recent property transfers uptown was between the Kings and Herb Atwell and Peggy Donovan, who own and operate Mountain Valley Brewing in Axton.
On March 4, the Kings sold 32-34 Franklin St., on the old courthouse square, to Renewal Partners LLC for $200,000.
Atwell told the Bulletin on Thursday that they “were not ready to talk about plans for the building yet,” but they did have specific plans for it and would talk about it at a later date.
But Atwell already had spilled the beans at an April 27 Uptown Partnership business plan group presentation when he announced: “After five successful years in the business in Mountain Valley with pretty much impressive growth, we decided to take the plunge and open up a brewery in uptown Martinsville. This uptown brewery will serve as an engine for economic development and a catalyst for the City of Martinsville, Virginia, and surrounding areas.”
At the Gauntlet awards ceremony Wednesday Atwell and Donovan received $12,000 in grant funds to help start their new business and $2,525 in in-kind services.
Other properties that have either traded hands or are in the works include buildings of great consequence, such as the former BB&T building at One Ellsworth owned by the City, to the building at 6 E. Main Street that was sold by the Kings to Bourland-McPheeters Building LLC for $150,000 on Nov. 12. Its assessed value is $85,300.
Martinsville Attorney Bill Bourland died in 2017, and the law offices in the building are currently occupied by practicing attorney Michael McPheeters.
Tim Martin of the Martin family just announced on Thursday that he had inked a lease with Community Storehouse in Ridgeway to occupy the lower level of the old Leggett building at 128 E. Church St. beginning July 1.
“The biggest problem you have are property owners who don’t want to sell, but don’t want to fix it up,” said King. “When you have nothing for sale and the owners won’t restore their properties, you’ve got a problem.”
The Martinsville Uptown Partnership became active with the hiring of Kathy Deacon as its executive director just over a year ago. The Harvest Foundation committed $350,200 over a three-year period to fund the initiative.
A visioning concept for the uptown area by the Partnership garnered mixed reviews. Then there were three community meetings that have been uncomfortable at times and even resulted in Martin telling Deacon he resented a comment she made and walking out of one of those meetings.
At this year’s budget presentation, City Manager Leon Towarnicki recommended Council contribute an unprecedented $4.5 million to Uptown Partnership, leaving some to consider the City’s commitment to other possible competing organizations like the local Chamber of Commerce and its economic arm, C-PEG.
“I think the Uptown Partnership is a wonderful thing,” said King. “It’s difficult to make people sell if they don’t have a reason to sell, but as for the properties I’ve sold, we now have a brewery coming in here, there’s going to be a new sandwich shop on Jones Street, Jeff Sadler has a lot of potential with McCollum-Ferrell’s and Derrick Ziglar is going to turn the Jefferson Plaza into something really nice.”
Bill Wyatt is a reporter for the Martinsville Bulletin. He can be reached at 276-638-8801, Ext. 2360. Follow him @billdwyatt.