After three years of frustrating delays, hammers are swinging again on the River District Tower project.

At the former Dan River Research Building, crews are scraping multiple layers of peeling paint from the walls, carefully replacing rotten or missing sections of the original maple floors and ceilings and preparing to move the main entrance to the building from Main Street to a former loading dock on Bridge Street.

The former loading dock is where the building’s signature tower will be located — a modern glass structure that will be the main entrance and elevator location. The first floor will have a small museum of Dan River Inc.’s history and will showcase memorabilia found in the building, including a room full of patents, spools and parts of some looms left attached to ceilings.

Larry Hasson, of Dewberry — the company handling engineering and design of the project — said a modern touch will be added to the historic, brick building.

“The glass tower for elevators means we can keep the facade [facing Main Street] intact,” Hasson said.

All of the steps being taken now will lead up to the major construction, which will begin with replacing the roof.

Since this is a historic building, and federal and state historic tax credits are being used for some of the financing of the project, everything done to the existing building has to be approved by the Virginia Department of Historic Resources, Hasson said.

One corner of the building had a tree growing right into the brick. To remove the tree, they carefully removed bricks, which will be cleaned up and reused in the same space.

“We have to keep all existing materials, or match them exactly,” Hasson said.

Even replacing broken or rotting windows meant negotiating with DHR, proving certain windows are unfixable and getting permission to replace them with exactly the same windows made of exactly the same materials.

Hasson said simply replacing all of the windows would be easier and more cost effective, but DHR insists on repairing, rather than replacing, whenever possible, so some original windows will remain.

Originally plans called for some of the interior brick walls to be exposed, but since they have always been painted, DHR said they need to remain painted.

But there are no restrictions on what color the walls have to be, so Hasson intends to take advantage of that.

“We’re trying to make this building fun,” Hasson said.

The top two floors in the main part of the building will be the new home of Danville Orthopedic Clinic, currently on Executive Drive, as well as its offices for other offices on Memorial Drive that focus on pain solutions, rheumatology and arthritis treatment and spinal injuries.

There will be about 50 exam/treatment rooms and a large physical therapy area that will include a therapy pool and whirlpool.

A spacious conference room on the top floor — and many of the offices — have spectacular views of the Dan River, the River District and the White Mill.

Dr. Mark Hermann, an orthopedic surgeon and a principal member of River District Development LLC (the group of 11 investors involved in the project), said that while the wait for the project to get underway has been frustrating, his passion for the project has never wavered.

“We wanted to do something for the community, bring that building back to life,” Hermann said. “That building really charged me up; I saw its potential for the River District … I believed in what we were doing. I always believed it would come out good.”

The second floor of the building will house medical offices for Danville Regional Medical Center.

The main floor of the buildings that face Main and Bridge streets will be leasable spaces for other tenants and the museum.

The oldest building — the smaller building facing the Dan River that was the original home of Dan River Inc. — will be restaurant space, with all floors having outdoor dining options on patios and balconies.

Hermann said he expects the building to be fully tenanted by early 2017 and that there will be roughly 200 people working in the building — but patients, restaurant customers and people visiting the other businesses will bring a lot more people to the building.

“We’ll be seeing 500-1,000 people going through the building a day,” Hermann said.

A morass of rules and regulations involved in getting federal or historic tax credits to help finance the project is what caused the three-year delay in getting the project moving along.

In order to qualify for federal new market tax credits, a special nonprofit “community development entity” had to be created to handle it.

Danville did so and qualified for $20 million in federal new market tax credits — but that doesn’t mean the government handed a check for $20 million, explained Joe Foster, a certified public accountant and one of the investors in the River District Tower project.

Instead, Foster said, the $20 million refers to the amount of money needed to be raised for the project. The federal new market tax credit program can be used to back 39 percent of that project — in this case, $7.8 million — and is used to attract investors willing to buy into the project in exchange for federal tax deductions over the course of seven years. The IRS has to approve each of the investors interested in participating.

River District Development will have to pay the $7.8 million back to the IRS at the end of the seven-year period, when a revitalized building can be expected to be worth enough to make banks feel more secure about refinancing the project to cover the debt.

“We’re basically borrowing all of the money; it has to be paid back,” Foster said.

The development is also responsible for paying taxes on the money, which is considered income.

While the process for getting federal or state historic tax credits has its own sets of rules, the project also qualified for them, bringing roughly $5 million in for the project. The balance of the money needed for the project comes from individual investors in the development and bank loans.

“Not a lot of projects have used both kinds of tax credits,” Foster said. “We had to create about 10 different entities to pull it off.”

Hermann wryly said none of the investors are getting rich on the project, but hope that, in addition to making an important contribution to the community, they will see a return on their investment in their lifetimes.

“There are a lot better ways to make money than this,” Hermann said.

Any time a number or projection changed, the inch-thick financial model had to be updated, Foster said, adding that any time one number changed, a lot of other numbers changed as well.

“I’ve probably done 50 of these during this process,” Foster said, tapping the document.

Hermann said there were times it felt like the project was fated to be subjected to “Murphy’s Law.”

“If there was something that could impact this project, it did,” Hermann said, citing delays due to the federal government shutdown in 2013, delays in awarding tax credits and other obstacles over the past three years.

Hermann, Foster and Hasson all expressed relief that the long wait is finally over.

“Seven years ago I said, ‘Let’s create a space for our office,’” Hermann said, with a rueful smile. “I believed in what we were doing, but never dreamed it would take this long.”

The conversion of the former Acree’s Warehouse into an indoor parking lot is taking longer than expected, but a representative of the architecture firm handling the project said it will be completed by Christmas. 

The garage covers most of a River District block bounded by Craghead, Bridge, Loyal and Wilson streets, except for some commercial and residential space facing Craghead Street.

The Danville Family YMCA has been selected as one of the top 10 recreation facilities in the world by Athletic Business Magazine.

In June, the YMCA was featured in the magazine as one of the top 66. Those selections were then judged by a panel of architects who chose the top 10 facilities of merit, according to a news release issued Friday.