Some Norfolk leaders want Waterside to be razed

NORFOLK

If some city leaders get their way, Waterside, the aging waterfront attraction that helped spark the revitalization of downtown, might be razed to make room for a luxury hotel, condos or perhaps an office tower.

What happens to the site, which features sweeping views of ships plying the Elizabeth River and of downtown Portsmouth, will be one of the most important decisions this council makes, Councilman Barclay C. Winn said.

"It's the most valuable piece of real estate in the city," said Councilman Paul R. Riddick, who supports tearing down the facility.

Waterside's future could be decided by the fall with help from the community and perhaps a consultant, city leaders said. The council likely will hold a special meeting this summer to discuss the issue.

Built in 1983 in place of abandoned warehouses and rubble-strewn parking lots, the marketplace helped transform downtown, and once was one of the area's most popular shopping and dining destinations. Today, with nearby MacArthur Center and dozens of eateries and nightspots on Granby Street, the facility has struggled.

When it opened on June 1, 1983, nearly 100,000 curious shoppers ventured inside to check out Phillips Waterside seafood restaurant, Crabtree & Evelyn, Hofheimer's Shoes 'N' Such, Scantastic and the Fudgery, where fudge was cooked and molded in the center of the food court.

Nearly all of the original tenants have left. Sales have fallen, and although the facility remains 97 percent leased, many spaces in the prominent food court are empty. Leases for many of the facility's largest tenants will end in 2010.

Waterside should be closed in 2010, Vice Mayor Anthony L. Burfoot said.

Burfoot said he sees outdoor shops on the site, similar to those in Atlantic City, with high-rise condominiums. Other council members have talked about a five-star hotel, a tall office building or a condominium project.

"I don't think we want a party place," Burfoot said.

City Manager Regina V.K. Williams said the site should continue to provide public access to the waterfront and that any future development should blend with its surroundings, which include the Sheraton Waterside Hotel and Town Point Park.

Over the years, Waterside has experienced its share of refurbishment.

It was expanded in 1990 to make way for more retail space. Nine years later, because of the opening of MacArthur Center, much of the new retail space became nightclubs. Waterside quickly became a magnet for young adults seeking to dance and drink.

But as more restaurants have opened along Granby Street and expanded the opportunities for nightlife, they have drawn customers from Waterside.

Burfoot said city leaders need to decide Waterside's future soon so the businesses there can relocate nearby. Besides Jillian's, Outback Steakhouse, Hooters and Joe's Crab Shack, among other chain restaurants, the marketplace also has retail businesses such as All About Virginia and More and The City Market.

"We want to keep business that's on the books in the city," he said.

City officials also are grappling with financial problems at Waterside. The city's housing authority purchased the marketplace in 1999 from a private owner. Norfolk leaders said they would eventually sell it to another private owner. That sale has never taken place.

City assessor Deborah Bunn said the land at Waterside is valued at nearly $8.5 million, which she said is likely close to its market value. The property currently nets the city more than $2 million in direct taxes a year, but sales have been declining, said Shurl Montgomery, executive director of the Norfolk Redevelopment and Housing Authority, which runs the facility.

This year, Waterside will need more than the $850,000 annual payment the city currently gives to the housing authority to operate the facility. The authority has asked the city for another $240,000 this fiscal year, which ends next month, and will need an additional $300,000 or more next fiscal year, which begins in July, he said.

However, Mayor Paul Fraim said the city will need to spend more than that. The facility needs a new paint job and expanded lighting just as a start, he said.

Waterside also has $5.7 million in debt from its expansion, which the city will have to pay off if it closes.

Fraim cautioned that no decision has been made to tear down the facility.

"It's still 97 percent leased," he said.

He said it's possible Waterside could be refurbished and its purpose redefined as it was nearly a decade ago.

"We need to keep all options on the table," he said. "And we need to keep the present tenants in mind."

Harry Minium, (757) 446-2371, harry.minium@pilotonline.com