Former Sycamore Grove developer reacts to Petersburg pulling contract: 'City simply walked away'
The group contracted to develop the Sycamore Grove mixed-use community in Petersburg has pushed back against the city's claims that it was they who forced the contracts to be rescinded.
In a lengthy statement June 10 to The Progress-Index, the Virginia Development Consortium said it was Petersburg who dropped the ball on Sycamore Grove and its affiliated Adams North project in Old Towne. The group said it repeatedly nudged the city administration to move the process forward, but those nudges were not successful.
'These were shovel-ready projects,' Harold Johnson, VDC's managing partner, said in the statement. 'We had agreements in place, a grocery partner secured, and the Governor and Mayor publicly celebrating the groundbreaking. Then, after months of shifting excuses, the city simply walked away.'
VDC and the city were going to turn the now-vacant former Southside Regional Medical Center site off South Sycamore Street into a mix of retail, office and residential space. The project, a cog of Gov. Glenn Youngkin's 'Partnership for Petersburg' initiative, was supposed to bring a long-awaited grocery store to central Petersburg and ease the 'food desert' status of the city.
On May 20, City Council voted to rescind its agreement with VDC, saying that the developer had not met deadlines or responded to any inquiries about development. At a ceremony with Youngkin in Petersburg June 3, Mayor Sam Parham said the project was still a go as Petersburg was looking for a new contractor, and blamed the contract revocation on a main water line beneath the property that he said VDC was unwilling to either work around or work with Petersburg on the $25 million cost to move it.
In its statement, VDC said the delay was all on Petersburg.
The group said Sycamore Grove and Adams North were structured 'under signed agreements' where Petersburg would transfer the property to VDC, negotiate contracts to sub-developers and issue a Virginia Industrial Revitalization Fund-backed loan of $3.5 million. It also noted that Petersburg City Council had passed binding resolutions acknowledging the project and the city's obligations.
'Despite repeated efforts by VDC to move the projects forward, the city took none of these actions,' the VDC statement read. Instead, VDC said it was forced to pay $2 million out of its own pocket relying on Petersburg's good faith.
'Every time our legal counsel pressed the City for action or clarity on why the projects weren't moving, the reason changed,' Johnson said in the statement. 'First it was a lack of legislative authority, then dissatisfaction with the grocery partner, then cost, and finally vague infrastructure concerns. None of it lined up with the agreements or the city's own public statements.
'The justifications were never consistent and did not withstand scrutiny.'
Of umbrage to VDC, the group said, were Petersburg's concerns over infrastructure, which came to the group as a surprise.
VDC said Petersburg never mentioned the water-line issue to the group in any of its conversations until Petersburg invited VDC to take part in a May 20 council closed-session via telephone to discuss progress – a move VDC said it now sees as 'bait-and-switch.'
'It was during this meeting that [City Attorney Tony Williams], for the first time, conveyed a $20 million price tag for the infrastructure challenge,' VDC claimed in the statement. 'The figure came as a surprise. Up to that point, infrastructure concerns had only been raised in vague and general terms.'
Despite promises on the phone call to send the materials, VDC said it received nothing and later learned that council voted during the open session of that May 20 meeting to rescind the contracts.
'Ironically, that vote stripped the very legislative authority the city had previously claimed it didn't have,' VDC said.
VDC also took issue with what it said were optics in Petersburg's satisfaction with the selection of West Virginia-based Grant's Supermarket as the grocery store to anchor Sycamore Grove.
'At the October 2024 groundbreaking ceremony, Mayor Sam Parham stood alongside the governor and proudly unveiled Grant's Supermarket as the anchor retail partner, touting its arrival as a major step toward addressing food insecurity in the area,' the statement read. 'The grocer was publicly celebrated as a solution to long standing access challenges and a key piece of the redevelopment vision. Yet that same partner later became one of the primary reasons the city cited for halting the projects. The contrast between the public celebration and the private blame is stark and difficult to reconcile.'
Ron Martin, co-owner of the Grant's chain, told The Progress-Index earlier that he was 'unaware' there were any issues with the contracts for Sycamore Grove. Since the grand opening, Martin said he had not heard from anyone associated with the city about the chain's presence.
VDC said the statement was not issued in order to regain the contract. Instead, it wanted to show commitment 'to public transparency' and to share its side of the story.
The group accused Petersburg of grandstanding on the projects just to curry favor. In the process of doing so, VDC said Petersburg's assessment of the fallout is 'grossly misleading.
'Despite the public ceremonies and political fanfare, the city never followed through. It signed agreements, held a closed-door meeting under the guise of cooperation, and then quietly killed the projects,' it read. 'While the city may have scored political points with a groundbreaking and a podium, there was little substance behind the show.'
It concluded with, 'What could have been a transformative investment for Petersburg is now a missed opportunity, and it is VDC and the city's residents who will unfortunately pay the price.'
Bill Atkinson (he/him/his) is an award-winning journalist who covers breaking news, government and politics. Reach him at batkinson@progress-index.com or on X (formerly known as Twitter) at @BAtkinson_PI.
This article originally appeared on The Progress-Index: Former developers react to end of Sycamore Grove contract
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