The city of Staunton is about to take out an eight-figure loan to pay for valuable land along Interstate 81. It's part of a complex deal with the state that should plant the seeds for hundreds of acres of development.
When Virginia announced several years ago that it would build a new Western State Hospital, Staunton quickly began eyeing the property the state would leave behind. The questions have long been how will Staunton pay for the land, and when must it write the check?
Staunton will pay $15 million for the so-called Gateway property, a nearly 300-acre tract along Route 250 and Interstate 81.
Thursday night, city council agreed to borrow all of the money in a pair of bank loans, with an interest rate of only about 2.5 percent. Council had saved up about $5 million, but decided not to put that toward the state payment.
Staunton Economic Development Director Bill Hamilton said, "The interest rate is so low, it really made sense to borrow the funds and to hold these funds in-house. They can be used in the future for infrastructure improvements to further the development of the property."
Hamilton predicts development of the Gateway project will start in the middle of next year, right on the heels of Western State Hospital moving to its new campus nearby.
Hamilton says the property is suited for a mix of commercial, offices and medical, and residential. And he says that at least some of the existing hospital buildings could be reused.
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