Penrose presents update on 90 Virginian; market study, parking plan create multimillion-dollar financing gap

Penrose, the developer selected to build housing at 90 Virginia Lane, told the Jackson Town Council and county commission this month that a market study and rising construction costs have created a potential financing gap for the 90 Virginian development and asked local officials for guidance on whether to build a costly structured parking garage or use a surface-parking approach.

The presentation to the joint body outlined project progress since Penrose’s RFP response in February 2024, summarized results of a December market study by Novogradic and more recent construction-cost benchmarking, and asked the council and commission for direction on two immediate questions: whether to keep a structured parking garage (estimated at roughly $10 million) or move to surface parking, and whether the public partners are willing to cost-share $500,000 toward schematic design so the team can get firm bid-level estimates.

The market study found strong demand for housing but warned that achievable rents for the workforce band targeted at 120–160% of area median income (AMI) are lower than Penrose had originally underwritten. Penrose said lowering achievable rents for many units in that band would reduce projected annual revenue and would materially reduce the project’s ability to leverage debt. Penrose reported that the combined effect of lower revenue assumptions and updated construction-price benchmarks could create a potential capital gap of about $31.5 million. The developer said removing the two- to three-level structured garage and using distributed surface parking could cut roughly $10 million from the project cost and reduce the gap.

"We are here to really provide you with a 1 year update, where we are today, the accomplishments, that we've made, in the past year," Shannon Fox Baker, regional vice president for Penrose, told the council and commission during the April briefing.

Penrose’s architect, Andy Rockmore of SAR Architects, reviewed the site scheme and project metrics: the design currently assumes 226 units, 324 bedrooms and about 304 required parking spaces under present code assumptions; Penrose plans 243 bike parking spaces on site. Rockmore cited the cost difference between structured and surface parking: "The difference of a structured parking space to a surface parking space is quite significant. $45,000 per structured parking space. It's $8,000 per surface parking space." He said the structured garage would be roughly a $10 million element of the project.

Tom Anderson, senior vice president for development at Penrose, and others emphasized that both pieces of analysis—the market study and the construction-cost benchmarking—are point-in-time assessments. Anderson said Penrose plans to update the market study before formal financing rounds and that lenders and investors will also weigh in on achievable rents. "We won't know if the ... market study is right or not until basically we start leasing the product," Anderson said.

Penrose outlined next steps if the partners choose schematic design: hire engineers and technical consultants, advance to a percent-schematic set Shaw (general contractor) can bid, and pursue additional subsidy sources. The developer asked the council and commission to consider tools that could supply private or quasi-public capital—most prominently rights-of-first-rental or first-purchase commitments from local employers and nonprofits—and to pursue federal, state or local subsidy programs (Penrose specifically cited Greenhouse Gas Reduction Fund opportunities it is tracking).

Public comment at the meeting included a suggestion to design any surface parking so it can be consolidated or redeveloped later. "If we go to the surface parking route, we'll consider arranging it in such a way to allow for easy redevelopment in the future," said Daniel Ragsdale, who spoke during the public-comment period.

No formal vote or binding decision was taken. Council members and commissioners asked for more time and additional materials—several said they wanted the Penrose team’s full pro forma, a side-by-side comparison of land use (building footprint, paved surface, and open space) for the garage and surface scenarios, and a parking-specification table (spaces per unit and per bedroom). Penrose and staff said they would provide the presentation files, circulate updated data, and return to a joint meeting in early May (staff suggested May 1 or May 8) to seek clear direction on parking and on whether public partners will cost-share schematic design.

Penrose gave a target schedule that assumes schematic design and final sourcing proceed: submit development-option plan review by late summer, break ground in 2026 and target a grand opening in 2028. Project proponents repeatedly cautioned those dates are contingent on completing schematic design, filling the financing gap and finalizing development agreements.

The meeting transcript records detailed discussion about how to manage cost and schedule risk—options included phasing, decoupling horizontal infrastructure (a "phase zero" focused on roads/utilities) from vertical construction to reduce financing carrying costs, pursuing property-tax abatements or insurance reductions to lower operating costs, and searching for other public or philanthropic gap financing. Council and commission members made clear they view the schematic-design effort and the parking decision as threshold issues that must be answered before the partners commit to the full development agreement.

Penrose and town/county staff will provide additional materials requested by the elected bodies, including the presentation slides and pro forma assumptions, and will follow up with a proposed special joint meeting date in early May to seek formal guidance and any authorization needed to proceed with cost-sharing the schematic-design work.