PORTSMOUTH
As other regional development projects have stalled recently for lack of financing, the rebirth of this city's premier piece of downtown waterfront property is poised to take a major step forward this week.
The non profit, city-run corporation that owns the downtown Holiday Inn site is expected to approve a development agreement Friday with Lincoln Property Company to build roughly 450 residential units, two parking garages and commercial stores on the riverfront site.
But the redevelopment won't come without cost.
Before work is complete, Portsmouth could be on the hook for more than $14 million in grants and infrastructure
improvements, according to documents presented in a closed meeting to City Council earlier this week.
"We are extremely excited about this project and what it's going to do for the city," said Kathy Warren, development director for the Portsmouth Redevelopment and Housing Authority. "And this development agreement really starts the ball rolling. This is really what triggers them making a very large investment in the city."
The plan, which could build a tower as high as 25 stories, gained the consensus of the City Council late Monday night. The council won't vote on the specific funding plan until a cooperation agreement is signed later this year.
According to documents from the closed meeting, Portsmouth would give Lincoln $5.65 million in the form of an economic development grant. The city would be responsible for paying off $1.1 million in debt that remains on the Holiday Inn and for nearly $8 million in necessary infrastructure repairs to the area.
Portsmouth officials say the seawall, storm water and sewer improvements also will address long-standing drainage problems that need to be fixed.
The city's investment comes at a time when Portsmouth is struggling to juggle its finances and several major projects. Earlier this week, council members raised the possibility of killing plans to build a new $45 million Circuit Court because of the cost.
Lincoln's presentation projects that if it is granted city funding and proceeds as planned, Portsmouth would make nearly $10 million in tax revenues within the first six years.
"We get a pretty quick return on our investment, and we get a good stream of tax revenue on the businesses that will be developed," Councilman Bill Moody Jr. said.
City Manager Ken Chandler was in Washington, D.C., on Wednesday meeting with Portsmouth's lobbyists, and said via e-mail that he would not be available for comment. Deputy City Manager John Rowe did not return a call Wednesday night.
Lincoln Property development director Chris Garland also didn't return several calls to his office Wednesday.
The development agreement marks the beginning of a revival for the property currently occupied by the Holiday Inn Olde Towne Portsmouth, a 42-year-old hotel that city officials have said isn't the best use for the prime waterfront location. The hotel, which is scheduled to lose its affiliation with Holiday Inn and close in November, was purchased by the city-run, non profit Greater Portsmouth Development Corporation in 2004.
Lincoln will demolish the hotel soon after it closes, Warren said.
The first phase of construction, which is slated to start next year, will use the land closest to Crawford Parkway. The phase's seven- or eight-story buildings will house 19,000 square feet of retail space, 12,000 square feet of office space, 240 apartments and a parking garage. It also could include a new freestanding hotel built on the site of the current city visitor's center.
City leaders had pushed for the hotel as a way to replace rooms lost from the Holiday Inn. They also had pushed for greater minority participation in the project.
To meet that goal, Lincoln has partnered with Norfolk developer William Fuller, whose company has built a shopping center in Berkeley and who is involved in several major hotel and office projects across the region. Fuller will make sure a diverse group of workers and subcontractors are involved in the project and will oversee a financing program that could allow local residents to individually invest a minimum of $50,000, Councilman Ray Smith said.
"It's providing the opportunity," he said. "I'm satisfied."
Although several other high-profile development projects in the region have failed because of the troubled economy, Warren said the city isn't worried about Lincoln obtaining financing.
The hope, she said, is to have the first apartments completed as the economy begins to improve. The second and third phases of the project call for 120,000 square feet of office space and 211 waterfront condominiums.
"The goal is to leave the most valuable property for last," Warren said. "That way, each phase just gets better."
Meghan Hoyer, (757) 446-2293, meghan.hoyer@pilotonline.com
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If
The city can't afford the financing for the new courthouse, how is it going to afford the financing on a condo project? Has anyone taken a ride around downtown Portsmouth recently, oh say at noon on a Saturday afternoon. It would be what I'd call dead. And then there's the issue of safety for its citizens, which everyone knows Portsmouth is lacking. Just one more of those things that make you go hmmm!
This is great news
This is exactly the kind of thing that is needed to make Portsmouth the vibrant and well-funded muncipality that it deserves to be. Yes, it seems counter-intuitive for the City to shell out ANYTHING at a time when a lot of folks already claim to be struggling with their current obligations. But this is an investment which will pay dividends for ALL. This will become an economic engine which will begin to fill City coffers in the very near-term. With the coffers filled, the city can begin to address the under-funded issues throughout. This kind of improvement begins to perpetuate itself. Other businesses then get attracted, other wealthy resident get attracted, other job-creating institituions get attracted. Pretty soon, the tax base begins to swell and it just keeps going. As counter-intuitive as it seems, it takes money to make money. If we can get Lincoln to pour hundreds of millions into our great City, it truly will ripple through the area to eventually improve even the smallest, most modest corners well on the other side of town. In this case, a rising tide truly lifts all boats.
"How about using the rental
"How about using the rental inspection money to fund this project. At $2500.00 a pop for non-conforming landlords ought to make it smooth sailing."
Good idea, that should end all "affordable" housing in Portsmouth. Once you get rid of the poor the place should really spruce up, aye?
Support Him
Steve Carroll For Portsmouth City Council.
devils advocate 2
zach knows whats up. the rest of you are just freaking out. all this will do is make portsmouth nicer. this is one of the most valuable if not the most valuable pieces of property in the city and it has a dumpy holiday inn on it. this is the right thing to do with it and they have the right people. it will bring in successful people who can afford to buy one of the condos to portsmouth, helping to improve the demographics of the area. while it doesn't directly address the poorer areas and some of the section 8 housing that needs to be torn down, it does bring in the type of people that portsmouth needs as well as new businesses that can help the cities economy. with the retail aspect, it will make this great property enjoyable to those who dont want to stay in the holiday inn. and i personally think it looks good.
and for those complaining. i dont like the city government very much either, so i understand your frustration. one of the problems they run into with high taxes though is that the city is very small as it is and a large amount of the land is used for non taxable purposes, thus in order to operate effectively, taxes will likely be higher here than somewhere li
What a conn deal.
Could Portsmouth be a better example of how NOT to run a city? Just look at the drawing of this project. Do you recall building houses out of cards when you were a kid? Now, look at the drawing again. Look familiar? That's one ugly building there. But then to top it all off, it's going to be built on waterfront property that would be better suited for a permanent building of what Waterside used to be. But then again, the citizens would actually get some use out of it then. That looks like just a cluster of junk piled up on the waterfront. Pity the one thing that that area of Portsmouth had going for them, was torn down years ago. Waterside used to be a nice place to go just about anytime of day and enjoy either a meal or a drink while watching the world go by. This project is going to be nothing but a big whole to pour taxpayers money down. I have to agree with the other posters, it's time to start investigating some of these people. Maybe start with that Warren lady. She seems to be anxious to take homeowners property away from them and give it to her friends in the development business.
Devil's Advocate
There are positives that exist in this situation. There may be a surplus of housing in this area. However, for retiring baby boomers from Hampton Roads or outside of the area, the new development could be an attractive place for them to live as they may not want to maintain a house in the suburbs. And, if developers attempt to market to baby boomers from the Northeast & Midwest looking to leave the cold winters behind, then this brings more spending to our regional economy. This is a positive for business owners(more sales). And, for those who aren't business owners, they need jobs. When a business is creating revenues, jobs can be created and exist. Small businesses are the backbone of our economy as they create future jobs for Americans. Locally, small businesses keep money circulated within the regional economy. It is possible that some of these retirees from outside of the area may even start some businesses as many people only become semi-retired. From a tax stand point, the only way to increase the number of taxpayers in Portsmouth is to build up as well as attract businesses and corporation to place a headquarters within city limits. An increase in taxpayers can p
Rental Inspections
How about using the rental inspection money to fund this project. At $2500.00 a pop for non-conforming landlords ought to make it smooth sailing.
What's a developer to do?
In this age of collapsing housing markets, with banks unwilling to hand out loans for housing people can obviously not afford, where else will profiteering property developer turn?
To taxpayers, and their gullible municipal leadership, naturally. Given the countless problems that Portsmouth is facing right now, a gigantic condominium tower is quite possibly the last thing it needs. Would it kill the city to invest in its poorer or more problematic areas?
By the city's estimates this project will bring in $29 million in tax revenues in its first ten years. That's about a 7% annual return on a $15 million investment - hardly worth the risks and tax burden. If the developers think the project is viable, let them finance it themselves.
Dear Portsmouth Officials..
..your whole city is a blight! A blight to look at, drive through and even to do business there. "You" who initiated this development have no remorse as to the "people" who live there! You have no "soul" but that of "making the almighty dollar". "YOU" are what is wrong with this country, and this region today! "You" are corrupt! What I would advocate Portsmouth residents to do, can not and would not, be fit to be printed here!
Downtown Portsmouth
Oh yes, raise my taxes again! They have already more than doubled in last 6 years. I am sick and tired of the waste and mismanagement of our city by those in charge. Now with the new marina, I wonder if our taxes will decrease. Fat chance!!
P-TOWN at its best
Does everyone remember all the promises of the council members that are new or were elected 2 years ago? Seems like they either lied to get elected or have been sucked into the void. Even when I worked on the 6th floor there were always things done behind closed doors that went contrary to what the people wanted. Those politicians that the people elect don't listen to the people they listen to themselves and how they can get their name(s) attached to projects for posterity. And what better way to do it - behind closed doors so the public doesn't know. NOTHING HAS CHANGED. Way to go Meghan! Keep the people informed and the council honest!
Its a parternship only fitting for P-Town.
First, completely Agree with the Corruption Comment. Second, let the project stand on its own merit. If it is such an attractive deal, Portsmouth residents should not have to foot the bill for the infastructure and shoudl gain from the selling of the property. Third, a "Diverse Group" of subcontractors and suppliers will be chossen by Fuller. Isnt that just another way of saying, hes going to get to choose his buddies to build the project. Just do an open hard bid and stop trying to BS the public. Fourth, a waterfront appartment in Portsmouth... $1,500/month to $3,000/month... who is going to pay for that. To break even, the developers are going to need to get at least that. Final, Fuller Development, who's only experience is a low income strip shopping mall developer in now building waterfront high rise condos and offices. Great selection Portsmouth. Its a parternship only fitting for P-Town.
Have any of the Portsmouth City Council read the paper?
Wake up!!! There is a surplus of housing in the area! The area's population is decreasing! The area's mean income is only $56K a year. There are too many high dollar, public subsidized development projects going on already in the area. That means these units will go un-sold and not leased and the taxpayers will eat the cost again. One great little blip from the article "Norfolk developer William Fuller, whose company has built a shopping center in Berkeley and who is involved in several major hotel and office projects across the region." Is this suppose to be a good thing? BERKELEY!? I don't think I highlight that in a portfolio. Maybe some investigations of the money trail to the city officials that are pushing this and other projects. Then there's "the non profit Greater Portsmouth Development Corporation", have you seen who it's made up and funded by? It's our tax dollars and all the members are city officials. Bit of a LARGE COMFLICT there isn't it. There just seems to be a lot of opportunity for corruption here. Take a look.
Name names...give real answers
Who are the members of Lincoln? Of course shares will be offered at $50k. That way only 1% of Portsmouth folks can participate in this champagne brunch. But I am sure that 1% will be the same 1% that always profits off of Portsmouth boondoggles. What has William Fuller ever built with his own money? Why is Portsmouth on the hook for anything to build on waterfront property? What makes anyone with a mind think that Portsmouth can accomplish in multi-use what Norfolk cannot? Can you get a Wal-Mart Lite on that site? The marina is missing in the rendering...what is it going to cost to get rid of that, Elizabeth? Where is Louise Lucas' cut? C'mon Kerry D, spend some investigative time on the other side of the river.
Portsmouth Board set to Approve Waterfront Development
Again our Portsmouth City Council meets behind closed doors to decide where best to spend our tax dollars and it is not to assist the homeowner or the everyday business owner who currently pays their taxes. It is not even to enable more of our non-taxpaying citizens to become productive members in society if one really contemplates who works for our construction companies, etc. No, Portsmouth is like all the other cities of Hampton Roads.
How many out-of-state developers do we need coming to Virginia with fancy floor plans and pictures of what they can build IF our city throws millions of taxpayer dollars at them. These developers promise to obtain financing, have amazing projects for income from the potential business and residential investments for others who will finance the deal, and the plans peter out somewhere during construction or in the salesmanship of the completed project. How many offices are still available for lease at One High Street and on the first floor of the parking garage at High Street and Crawford Parkway? Did the City of Portsmouth not finance a loan for a building it could not sell for over two years after it was built? I did not know that a munici