$60 million project proposed at Laskin near Oceanfront

VIRGINIA BEACH

The hotelier behind the public-private deal that birthed the 31st Street Hilton is back before the City Council, this time with a mixed-use complex that could stretch the resort area another block inland.

Still in the draft stage, the proposal calls for about 200 upscale apartments, retail shopping and outdoor cafes lined along a reworked and more pedestrian-friendly Laskin Road. Laskin Road becomes 31st Street near the Oceanfront.

The complex, with its own parking garage, would sit on roughly 3 acres bounded by Laskin Road, 32nd Street and Arctic and Pacific avenues. It could force the relocation of The Jewish Mother, The Heritage store and Waffles ’n’ Things, all Beach fixtures.

Bruce Thompson, chief executive officer of Gold Key/PHR Hotels & Resorts, estimated the development would cost nearly $60 million. To make it happen, Virginia Beach would kick in another $5 million to $7 million for streetscape improvements and utility work, said Steve Herbert, the Beach’s chief development officer.

No decisions on whether the city will pay – or how much – have been made, according to documents obtained through the Freedom of Information Act. The plan was shown to all council members for the first time in a closed-door session Tuesday.

Councilman John Uhrin said the public investment for streetscape improvements has long been part of the Beach’s vision for Laskin Road. He said spending that money in concert with a private development makes economic sense.

“The key to the resort area redeveloping itself is having folks living in the resort taking advantage of all the resort has to offer,” Uhrin said. “People who believe in that vision.”

The soon-to-be-released master plan for the Oceanfront will push the city to create pedestrian corridors at 19th and 31st streets, in part by attracting mixed-use development similar to what Thompson has proposed for Laskin Road.

“We think that it’ll be the Town Center of our resort area,” said Emily Morton, a spokeswoman for Gold Key. “That 31st Street, Laskin area, since the Hilton is kind of the anchor of that, we’re always excited to upgrade that area.”

Thompson doesn’t yet own the land, most notably home to The Jewish Mother, a restaurant and nightspot along Pacific Avenue, and The Heritage, a health food store. There also is a telephone utility station at the corner of 32nd and Arctic. The plan would work around that building, Herbert said.

City tax records show that all but the utility land is owned by the investors behind Sea Realty Corp. That company announced its own development plan in 2004, but scrapped the idea. Gordon Huey, a spokesman for the company , did not return calls.

Morton said Gold Key does not have options to buy the land. Scotty Miller, president of The Jewish Mother, said he understands Thompson has talked with Sea Realty.

Miller and others in the block would likely have to move to make room for Thompson’s project. The Jewish Mother has been at its current site for about 35 years, Miller said.

Mike Eason, a resort official for the city, said Beach leaders are interested in keeping the iconic nightclub at the Oceanfront. Eason and Herbert have brokered at least one meeting with a real estate agent to find The Jewish Mother a new home, according to internal city e-mails. A vacant restaurant at Laskin and Holly roads is one option.

“We’d love to stay there, but they haven’t talked to us,” Miller said. “I don’t see the development happening for at least five years. … We’re not going to commit out of that corner until they tell us we’ve got to go.”

If Thompson buys the land, he still has to get council approval for the project.

In a December letter to Herbert, Thompson outlined plans to build 196 apartments, 51,000 square feet of office space and 64,000 square feet of retail space, split between national and local merchants. The property also would include nearly 700 parking spaces.

The development could stretch the “31 Ocean” corridor, the slogan given to the 31st Street Hilton, the neighboring Neptune’s Park and a public garage and retail complex across Atlantic Avenue.

The cost of the public-private Hilton venture was $79 million, with the city putting in $31.5 million for the garage, park and land purchases.

“With the city’s cooperation,” Thompson wrote in his letter, “I’m confident that Gold Key/PHR can create another flagship development that will raise the bar for future endeavors throughout the resort area.”

Unlike the Hilton deal that drew a voter rebuke in 2000, the city’s tab in Thompson’s latest proposal includes no money to pay for parking. Public money instead would be used to move utility lines underground and redesign Laskin Road.

The road has five lanes at its intersection with Pacific Avenue. The plan would reduce that to three lanes and widen sidewalks on the north side of the road.

The idea fits with the city’s long-standing “Laskin Gateway” concept, which ultimately will push traffic to 30th and 32nd streets to encourage development along 31st Street.

“A pedestrian-friendly spot,” Uhrin said.

Thompson also has asked for a special tax district in the area. Herbert said the council could consider that in next year’s budget negotiations.

Herbert said there is enough money set aside in the fiscal 2009 budget to cover the project’s cost, but the funds could be spread over several years if Thompson’s project is delayed.

Gold Key’s current plan is a sliver of the broader version Thompson showed city officials last year. That proposal featured a series of mixed-use complexes on both sides of Laskin Road, running four blocks west of the Boardwalk.

It is unclear whether Thompson still plans to push that concept. Morton said more details on the corridor’s development could be released this summer.

“It’s really taking the resort strip from more of a lazy beach town to more of an upscale resort area,” Morton said. “Whenever you have city support or city partnerships going on, things obviously happen and get through faster.”

Herbert acknowledged that Thompson’s project is in its infancy, but he said the proposal shows the potential to extend the resort strip down Laskin Road.

“It is, for the first time, stretching across Pacific,” Herbert said. “Just as important, it is a fulfillment of the promise of the corridor. 31st Street is becoming what a few people thought it could be.”

Richard Quinn, (757) 222-5119, richard.quinn@pilotonline.com