PORTSMOUTH
Two major development projects, including a $158 million plan to reshape the city's waterfront with a mix of residential units and office space, have been granted extensions.
Another mixed-use project has been shelved and a fourth wants to scale back on building condominiums because of the recent economic downturn.
Securing financing for ventures such as condominiums and retail space has gotten more challenging for developers, said Kathy Warren,
director of development for the Portsmouth Redevelopment and Housing Authority, on Thursday.
Three years ago, lenders were lining up to provide financing for projects in the city, she said. Now, developers are asking the city for permission to scale back their projects or for more time to move forward.
So far, city leaders have been reluctant to approve any changes to development plans that they feel cheapen the quality.
"We want to make sure during this downturn in the market that we don't build projects of a lesser value," Warren said.
The projects include:
- Texas-based Lincoln Property Co.'s $158 million plan to redesign the former Holiday Inn site. On June 27, the city granted a six-month extension so the developers could perform "due diligence," including lining up lenders and developing designs.
Warren said such extensions are typical. The project is on track, and there have been no discussions to scale it back, she said.
- Portsmouth Town Center Associates and PRHA agreed in May not to build a $22 million, five-story development of condominiums, shops and offices, on the corner of Effingham and County streets. Warren said the developers initiated the conversation about the project.
The venture was being backed by several local investors, including attorney Eric Moody, the Rev. Melvin O. Marriner, engineer Kenneth Wright and developer Dan Aston.
"They could have built a scaled-down development project, but again, this is a very visible, important property on the downtown gateway," Warren said.
- Portsmouth Venture One, which is affiliated with Virginia Beach developer L.M. Sandler & Sons, has asked for permission to change the third phase of its construction at the city's largest new residential development, New Port.
The developer would now like to build 300 apartment units and 100,000 square feet of retail space, instead of 427 condominiums. The requests are scheduled to go before the Planning Commission Aug. 5.
Construction of residences in the earlier phases of the development is ongoing, Warren said.
- Sembler Co., a Florida-based developer, has gotten a six-month extension to line up tenants for a proposed shopping center at the intersection of Frederick Boulevard and Turnpike Road.
Councilwoman Elizabeth Psimas said the economy is affecting a lot of projects, but it's important that developers stick to their plans. "I don't want to compromise," she said.
Warren said the downturn also is affecting financing for other PRHA projects. Investors are much more selective about projects and offering less for tax credits, she said.
"It's not gloom and doom," Warren said. "We're just finding we need to find creative ways to fill some of the gaps."
However, other projects are on schedule, such as the new Tidewater Community College campus and Victory Village business park, she said.
Staff writer Deirdre Fernandes contributed to this report.
Jen McCaffery, (757) 446-2627, jen.mccaffery@pilotonline.com
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doom and gloom
I have lived in my present neighborhood for 27 years. In the past when a house came up for sale there was never a sign put up, it just sold by word of mouth. Today I can walk out on my front porch and count 4 For Sale signs in my line of sight and there will be another one added soon. Sure some people are downsizing, so what? This has always happened. What is different now is that these properties are staying on the market so long. Sure the housing market is down and everybody knows that. The other reasons houses are not selling locally is that people just don't want to live in the Portsmouth burbs. High real estate tax is most of the reason but along with that is the fear of higher taxes, fewer services (except social services) and crime. This will not change until the citizens come to the polls and vote to take their city back. All of Portsmouth needs to get involved and be a watch dog to what is going on in the building on the waterfront and I don't mean the jail.
Musical chairs!
Folks, esp Ethan, remember the old game of Musical Chairs in which one person got stuck holding the bag at the end of each round.
Well, Ethan, as people age, they downsize. We happen to be in a very bad housing market, but there will still be older people trying to downsize and . . . when the market recovers, there will still be older people looking to downsize. You will be there someday and so will I.
It doesn't help to hold the current crop of older people selling their homes responsible for the economics of the time they chose to do this. Yes, I am sure they will compromise with you, but if their house was valued at $500,000 two years ago and is valued at $300,000 now, don't think you'll be able to scoop it up for $100,000. In my humble opinion, most of you starting out in your 20's need to get a "starter" home anyway, and not think to buy from a person retiring out of the biggest house they ever owned. Just some thoughts. MGM
Old people eh?
So the "old" people did not provide "oversight" to the IT generation that thinks that get rich quick schemes are better than work. LOL...nice try Ethan. Adam is on the mark as far as adult "kiddies" in their 20s or 30s buying way more than they can afford because they gotta have it now. The housing bubble was just another scheme like the dotcoms were some time ago. Some got rich but a vast majority got left with the trash. Now, because of the adult "kiddies" that are walking away from their mortgage promises, the "old" people have to pick up the pieces of adolescent activity. Thanks Ethan.
uhm adamc
Adamc, I do not see myself as a soldier between young and old, I have older relatives that are loosing because of the speculative mania of the market. It's just a point to hopefully drive posts and debate. Some could call it a troll, but it is one of the many true aspects of the housing bubble. Housing has been seen as THE retirement centerpiece, instead of having true savings for retirement. With the insane appreciation of property it's easy to see how this happened. But as a nation, to have everyone looking at primary residence as the mega-investment for the retirement, versus the utility of shelter, is a fallacy. Over the past 100 years on average housing prices kept up with inflation, maybe appreciated at 3%, don't have my source handy (Prof. Robert Shiller, Irrational Exuberance). So yes, many young people were taken advantage of, and the old people who are put in the position to provide oversight did not do their job.
Lower taxes
Portsmouth should consider lowering real estate taxes. They have the highest tax rate in the area. Although the public services are not best in the area. (underpaid fire, police, teachers) It is hard to comprehend, but lowering taxes will bring in more money. Maybe take advantage of the people who commute from NC. As gas prices rise, the commuters will look for alternatives. Once people move in, business sprout up and tax dollars begin to roll in from the businesses.
added
I sure am glad that I won't be sitting on my front porch in New Port looking across the street @ apartment buildings when I was suppose to be looking @ condos or other homes that are priced in the same range as mine. Those buyers in New Port were told/sold on the concept of same size/quality of homes & now all they're going to be looking @ is section 8 apartments. And, you know what comes w/that. Need I say more, I didn't think so. (SH)City council better be prepared to get thrown out if they do the big switch-A-Roo on these home owners. They need to stick w/the original planning, that's the only right thing to do for the people whom have already bought into that neighborhood.
Ethan
I think most of what you write is fairly sensible, but this image you have of yourself as a soldier embattled in the conflict between old vs. young makes you sound like a 14 year old with a persecution complex.
The people I know who participated in the most egregious abuses of the housing bubble were not especially old - mostly people in their 30s. These were the ones viewing the housing market as a get rich scheme rather than a place to find affordable housing. I know of no one over 50 who had any interest in "flipping" houses.
All the legitimately old people I know had the good sense to keep their finances far away from this fiasco in the first place, and stayed in homes they’d owned for a decade or more.
But there is doom & gloom
But there is doom & gloom. The American consumer has overspent, and there is no where to go but down. Sorry old people, the young people can't fund your retirement by overpaying for your house no mo. The banks won't give them loans that the young people can't pay back, because the investors won't buy the mis-rated garbage loans. If your selling, remember, don't follow the market down -- cut and RUN. Lower the price NOW and sell NOW, or forever chase the market down. This correction / recession / depression is going to happen quicker because there are more sources of information now. In the 70s there was no internet.
"I don't want to compromise," she said.....
....DUH, City Council has already done that MS Councilperson!
Financial Woos!!!
Is it really surprising that the city has to do this. They have to because they could not afford it in the first place.
Portsmouth
Hampton Roads cities are well known to suffer identity problems... wouldn't it be nice if we could all have a sexy oceanfront, or a bustling downtown. But does Portsmouth really need to reshape it's waterfront? Builders like to build, and cities like to spend money, but how about a reality check... scaling back the construction of new condominiums sounds wise, especially considering the market. There are condos for sale on nearly every corner - and that's in downtown Norfolk!