by Ryan Culicerto –
Quality Stone Concepts
113A S. Witchduck Road,
Virginia Beach, VA 23462
In the last month alone, the City of Virginia Beach hasn’t received a lot of good press. In the VA Pilot alone, there have been allegations of an unfair bid process for the Cavalier Hotel project, Mayoral and City Council investigations, budget shortfalls and one of my business neighbors is even accusing the City of not making good on the promises to help him relocate as a result of the city’s Witchduck expansion project. If you were to also include the polarizing topics of the light rail and the city’s most recent stadium proposal, it’s never been a tougher time to say “I work for the city of Virginia Beach.”
This blog post is not meant to accuse anyone or state my political viewpoint. We at Quality Stone Concepts, understand that there are always two sides to every story, which I why we’ve decided to share our story as it unfolds.
As you may or may not be aware, on July 17th, 2015, the city acquired the approximate 4.2 acre parcel located at 71-129 known as Witchduck Exchange. Quality Stone Concepts was a tenant on the Property and was using approximately 11,935 square feet and 70 parking spaces to display our granite inventory. The City acquired this property under eminent domain laws, which stipulate that governments have the right to take public property for public use in exchange for just compensation.
We were legally notified on May 28th, 2015 by our Landlord that the “City of Virginia Beach” is planning on acquiring all of the land and improvements known as Witchduck Exchange under threat of condemnation. The letter served as a Notice of Termination, effective July 6th, 2015, and according to the letter, we were to “remove any and all personal items, broom-clean the facility and remove all trash.” As you could imagine, prior to the termination letter there were plenty of whispers and gossip about how and when this was going to go down, but nothing concrete by any city officials. Since you generally don’t pick up and move 30 tons of granite inventory on a rumor, our decision was to keep our head down and continue to work hard, obtain more concrete information, service our customers and grow our company. However, on May 28th, we were now confronted with the very real possibility that our business would be “homeless” in less than 36 days.
If you’ve never had the opportunity to buy me a beer, or had the unfortunate experience of asking me, “how’d you get in the granite business” you may not know the story of QSC. Since you didn’t buy that beer, I’ll do my best to summarize it for you. In April of 2007, my business partners, Tony Pirrone, Terry McClaskey (both locals and Cox high school graduates) and I scraped together $11,000 each, signed legal documentation and wrote a sales and marketing plan from our kitchen tables. With our initial investment we procured inventory, bought our first saw off an eBay auction for $200, and signed our first lease. The lease was for 600 sf of empty warehouse space (with no lights) on Boland Parkway in VB. Our first year, while working out of my house, we installed over 50 kitchens with only hand tools. Most of this work was performed in our customer’s front yards, and thankfully it provided us with the revenue needed to grow into a “real warehouse” and buy a real bridge saw. As any growing company will attest, we were starving for liquidity, but because we had no tangible assets, other than cash in a bank, the banks were no help at all. Even though in 2006, we started to see the beginnings of the real estate crash, we decided to self-fund our own growth. Through supplier financing, credit cards and prudent cash flow management, we never missed a payroll or failed to pay a supplier and quickly grew to a $1 million company. As builders were going out of business left and right, or decision to stay small and lean and work with only re modelers proved to be a stroke of good luck as we continued to grow while our competitors were struggling with their massive overhead. Our decision to become the first local “granite” company to offer a complete bundled solution (countertops/cabinets/sinks/faucets) also proved to be trendsetting, and helped us grow into a larger space on Quality Court.
In 2011, we decided to take the plunge. We were busting at the seams on Quality Court, and our cabinet business wasn’t reaching its full potential because of space restrictions. Plus we needed more outdoor space than Quality Court was willing to provide. In June of 2012, we decided to open up the city’s first retail granite and cabinet company at 113A – S. Witchduck Road.
For the first year, we were focusing on getting settled and adjust to the new economics of our space. We built out and expanded our granite and cabinet shop while slowly building our showroom through cash flow and barter arrangements. In time, our showroom became the largest in Virginia Beach and currently has 9 kitchens, custom made stone displays and became the competitive advantage we currently enjoy. At the end of 2014, we were proud to report that in 7 short years, we had grown a local start-up company from $11,000 in seed money to a company that had generated over $10 million in revenue. In the meantime, the whispers and rumors of the city’s plans with the property began to pick up steam.
After months of rumors, we were invited to a city planning meeting at the Renaissance Academy for the city’s plans for expansion of Witchduck Road. At that meeting we were shown a map that indicated which business in the area that were going to be affected by the project. We were told that bids were going to be let by October 2014 and construction to start “afterwards”. However, in the City plans that were provided, 113 A. South Witchduck, as well as our our existing warehouses were to be left alone, and the only encumbrance to our property would be an easement into our parking lot during the expansion and the turning lane in front of our building would be closed. We were annoyed that access to our parking lot was going to be even more restricted, but at the same time relieved that the buildings we had just leased and improved were going to be left alone.
The public information from the City did not satisfy many of the tenants in Witchduck Exchange buildings, as many people felt “the writing was on the wall” and that it was just a matter of time before the project would grow in scope and effect all businesses on the corridor. Rumors among tenants persisted and grew in volume. There wasn’t much we could do about this news, and we again made the decision to stay put and wait for more concrete information.
Even though we did pick up and move, to say that we were ignoring these rumors would be incorrect as well. We reached out to our landlord on numerous occasions and were made aware that “something was happening” but again hard details were tough to come by, as he had a vested interest in keeping his space rented. On separate occasions we reached out to two different Virginia Beach City Councilmen. Their concern was genuine, and helpful in easing our nerves, as the information that was obtained from those requests included packets of information and drawings that reiterated our findings at the Renaissance meetings and excluded 113A. S. Witchduck Road from the major inconveniences and condemnation that were pending. The rumors persisted and now we started noticing that other tenants were starting to leave.
At that point we started the process of speaking to a local law firm who specialized in eminent domain cases to see what our rights were. Even the law firm wasn’t completely clear as to what the city was going do and how many business were going to be affected, they had become aware of the situation because many local brokers were aware that something was going to happen but details weren’t made public.
There are probably 10-15 more instances where I could detail the general confusion surrounding this situation, but I’m getting bored just typing them. Let’s just say that we were left in limbo, and that everyone else knew something that we weren’t privy to until the official word came in on May 28th, 2015.
On July 27th we received a letter from our Right of Way Agent from the City of Virginia Beach stating that the City of Virginia Beach is buying the right of way for the Witchduck Road, Phase II Project, and that the property I am occupying will be affected by the construction. We were assured we would be eligible for relocation benefits as specified by law.
Even though it took approximately 1 year to move into the buildings and our business effectively doubled in size, the city stated that they wanted to give us “adequate time to relocate.” The City assured us that we would have 90 days from the receipt of the letter to vacate the premises. On October 27th 2015, Quality Stone would officially be eminent domained (is that even a word).
So now that you know who we are and how we got here? This blog moving forward will focus on the promises made in the last sentence in my eviction letter:
“With your cooperation, it is the City of Virginia Beach’s goal to assist your business in relocation to minimize any inconveniences caused by the move and answer any questions you may have.”
Over the next 30 days we plan on documenting and letting the citizens of Virginia Beach know how this process really works. Eminent domain is a tremendously boring process of legal notices, bureaucratic reimbursements and constant navigation of red tape. We do believe that eminent domain, while unfortunate, is a necessary evil in terms of a city meeting it progress goals. I’m not here to complain about “being in the wrong place at the wrong time” however I am here to document this process and hopefully help future business owners through this cloudy process. We have been well educated by our Right of Way agent (who have been very helpful) and there have been plenty of verbal and written offers of “assistance by the city.” However, as you can imagine there is a lot of murky legalese in the documents provided and not to mention the ever-present term “at the City’s discretion” which always seem to find its way into the explanation of the term “reimbursement.”
As I’m writing this as of 11/17/15, I currently have 37 days until my existing lease with the city expires. My hope is that by December 31th (my new move out date), the reader can decide by the details provided here in my blog, that the City of Virginia Beach has been in fact, been the partner that they have promised. As a true local success story that was born and grew through this latest recession, we want to ensure that when the book is written on Quality Stone, we are not just another small business that just happened to be in the way of public progress.
Interesting read. Sorry fir your bad luck. I wouldn’t put too much faith in the city doing the “right” thing, but you never know. Just protect your business interests and hope the city plays ball. I will follow this blog – interested in the outcome.
Best Wishes! JIM