The Virginian-Pilot
©
PORTSMOUTH
The developer of the city's premier piece of riverfront real estate is struggling to get financing, a city official said last week.
In February, Dallas-based Lincoln Property Co. reached an agreement with the city to build about 450 residential units, two parking garages, and commercial space on the site of the former Holiday Inn Olde Towne Portsmouth hotel. The developer requested an extension in June to line up financing and present designs for the $158 million project.
Lincoln is scheduled to report back to city leaders next month, but financing is still an obstacle, Kathy Warren, Portsmouth Redevelopment and Housing Authority's director of development, said.
City leaders committed more than $14 million in grants and infrastructure improvements to the development. It would bring in about $29 million in tax revenue over the first 10 years, Warren said.
"The economic markets have not changed, and Lincoln is still finding it challenging to put the financing together," she said.
The project is the latest high-profile development in South Hampton Roads to face roadblocks in obtaining financing for construction that includes residential, retail and office space. Nearly 14 months ago, work stopped on Granby Tower in downtown Norfolk after developer Buddy Gadams lost financing.
"These mixed-use projects are so complex," Warren said. "For any lender to invest in them right now, the money's just not there."
A call to Lincoln's Texas headquarters was referred to a Northern Virginia office. Multiple phone messages left there last week by The Virginian-Pilot were not returned.
Despite the economy, Portsmouth officials refuse to scale back the project and do not want to jeopardize quality.
"We have one opportunity to do this," Warren said. "This property is a jewel."
The site is probably the most desirable piece of waterfront land in the region, Vice Mayor Bill Moody Jr. said.
"I'd rather wait the economy out than go for a lesser project," he said.
In the meantime, city officials have been researching other ways to help finance the project, such as creating a community development authority in which building and residential owners living and renting there pay extra taxes to help cover basic amenities such as infrastructure.
The former Holiday Inn site has been owned by the non profit, city-run Greater Portsmouth Development Corp. since 2004.
The franchise agreement with the existing Holiday Inn on the property expired this month and the hotel has since closed. Hotel liquidators are selling its contents in a public sale. Demolition will begin early next year, Warren said.
The first phase of the development was to begin next year, according to an agreement Lincoln reached with the city in February.
At the time, Portsmouth committed more than $14 million in grants and infrastructure improvements to the project.
Jen McCaffery, (757) 446-2627, jen.mccaffery@pilotonline.com
Delicious
Digg
Reddit
Facebook
Twitter
Google
Yahoo
One word here...
TUNNELS
Portsmouth will forever be relegated to the back burner until you can get there much easier. I've lived in every city in this area. One place I will never live unless I'm working there is Portsmouth. Not because there is anything wrong with per say but, it is impossible to get into or out of during rush hour. Norfolk, Va Bch and everyone else knows this. You will never hear it said aloud nor even whispered behind closed doors but, you can bet they think it. Why would any of these cities really encourage the construction of tunnels that would make it easier for people to live and shop in Portsmouth? They wouldn't. It is a dirty little secret and Portsmouth needs to wake up! You don't help the competition.
Portsmouth project at Holiday Inn site held back
There may be proverbial silver lining to the dark cloud over the Portsmouth development project slated for the Holiday Inn site. Specifically, the delay buys developers and residents more time to examine the unintended consequences and second- and third-order effects the development of this area is sure to spawn.
Olde Towne, a gem of a neighborhood, seems to have a rather limited infrastructure. Crawford Parkway, while scenic, isn't up to the task of handling a lot of what goes on in Olde Towne, now. Trying to navigate Olde Towne during something as simple as a summer evening concert or Sunday marathon or bicycle race is like trying to transit the downtown tunnel during rush hour and an Elizabeth River bridge lift! (Not to mention the fact that one hefty high tide -- or even a moderate tide with a little bit of rain -- and Crawford Parkway becomes an alluvial plain!)
Looking at the state of some of the businesses already located in Olde Towne makes me wonder if the developers will really be able to attract tenable and durable businesses with the plan, as it stands.
Furthermore, the two Elizabeth River crossings from Norfolk to Portsmouth are such choke points that it i
stevenm
Well said!!!
Opportunity
Here is a perfect opportunity, and the timing could not have been better, for Lucas's investors to invest in Portsmouth. Help make Portsmouth the town that it can be and not invest in a project that would make 1 person, Lucas, so much money. I guess it is a time of soul searching, should I enrich Lucas and her family, or should I help out Portsmouth. You're the investors in the Lucas money making scheme. You need to decide. May the force be with you!
why don't they go after
the bonds that Auntie Louise is trying keep all for herself? Seems to me this is further along than her pipe dream & they have a proven track record of success. They fill their rooms w/paying customers & are very successful. Use those bonds for this worthy development & financing problems will be a thing in the past. People in P-Town need to wake up & see this is worthy & support should continue to be given by P-Town City Council.