Economics has always been at the core of the issues delaying the Herndon Downtown Redevelopment Project (2019) between the Town of Herndon and Comstock Herndon Venture LC, according to Bill Ashton, the town’s manager. He said this during a phone interview on Friday, Nov. 17.
The downtown redevelopment project is under a public-private partnership agreement between the parties. It involves nearly five acres of land in the center of the historic downtown district in the Town of Herndon. Comstock plans a mixed-use development featuring 273 apartments, approximately 17,000 square feet of retail space, a 16,265-square-foot arts center shell, and a 726-space parking garage. As of Nov. 17, 2023, a section of the parcel remains as it has since the pandemic began: fenced off, overgrown with weeds, and a sun-faded banner tacked to the fence announcing, “Excitement is Building; Take a Look."
During the Herndon Town Council Meeting on Tuesday, Nov. 14, Ashton reported that the building permit review was underway for the long-awaited project and “the permit review process should be completed by the holiday. … It’ll be ready to rock and roll,” Ashton said. Is the project about to commence?
On Friday, Ashton said that Comstock and the town are attempting to ensure all permit processes are completed so they won’t have to wait for the permits “if the conditions become right." According to Ashton, Comstock resubmitted its building permits because the original Herndon Downtown Redevelopment Project was planned under an earlier revision of the Virginia Uniform Statewide Building Code. The codes are updated on a three-year cycle as part of the code development process.
“Now we have a new  Virginia Uniform Statewide Building Code, and Comstock has to update its permits. It’s a matter of course we’d do with any project,” Ashton said.
Those earlier permits were valid until Comstock pressed the pause button. By the fall of 2020, during the first year of the COVID pandemic, on Nov. 17, the Town Council unanimously approved a resolution that amended the comprehensive agreement with Comstock. It adjusts the outside satisfaction date by which Comstock must have the project under construction to Dec. 31, 2021. The staff report cited recent construction delays for the project as related to significant problems created by conditions in the Metropolitan construction market. COVID-19 caused substantial increases in material costs. Production facilities reduced output or shut down due to COVID-19 workforce restrictions. That caused supply to constrict; at the same time, demand held steady.
A year and a half later, in April 2022, Comstock exercised its right in the amended comprehensive agreement to pause construction commencement for up to 24 months due to market conditions or other matters, including delays due to the COVID-19 pandemic.
The deadline for the two-year pause Comstock took in April of 2022 is right around the calendar corner for 2024. Is April 2024 a line in the sand, or could the deadline be extended?
"I really don’t know," Ashton said. "At times, people look at me funny when I say that. It’s the conditions on the ground. There’s no way I can make up the past five years of inflation-driven growth. It’s been a very challenging period.”
Comstock did not immediately respond to a request for comment.
Economy Watches: U.S. and Greater Washington
The Town of Herndon’s redevelopment project forecast could be viewed through analyses of the United States and Greater Washington’s regional economies.
“The hard part of the inflation fight now looks over,” writes David Mericle of Goldman Sachs & Co. LLC on Nov. 12, 2023, in the US Economics Analyst 2024 US Economic Outlook Final Descent (Mericle) report. “It was fair to wonder last year whether labor market overheating and, at times, unsettling high inflation mindset could be reversed painlessly. But these problems now look largely solved; the conditions for inflation to return to target are in place, and the heaviest blows from monetary and fiscal tightening are well behind us. As a result, we now see only a historically average 15 percent probability of recession over the next 12 months.”
In the Greater Washington, D.C., area, "as has been the case nationally, the region’s economy has held up against higher rates far better than anticipated,” stated the current report of the Washington Economy Watch for October 2023. "A local recession appears less likely. However, the region’s economy will likely slow throughout next year, with a few consecutive months of job losses likely."