East Beach developer gets 2 more years to finish

NORFOLK

City leaders in 2002 gave a developer 10 years to oversee the creation of East Beach, an expansive waterfront neighborhood along the Chesapeake Bay.

On Monday, Norfolk Redevelopment and Housing Authority officials gave the developer two more years, saying slow home sales and a slumping economy had made it impossible to keep to the original schedule.

"This housing crisis has caught up with us," said Jim Gehman, the authority's chief development officer, who pointed out that sales had been robust until the market slowed. "These documents reflect closing dates that are no longer realistic."

East Beach Co. LLC, which has built roads and infrastructure for the 94-acre neighborhood and sold lots to homebuilders, now has until July 31, 2014, to finish subdividing and selling the last of the property.

The company has planned nearly 400 single-family homes and almost 300 multi family units for the neighborhood, which sits east of Shore Drive. Of those, 382 are either completed or in production.

Most of the remaining units are part of a plan for denser development in the final phase, which hasn't begun because of slowed sales, officials said.

But they pointed to a recent sales uptick as a positive sign. Last month, East Beach Company sold six lots. That brought the quarter's total to 14 - a leap from previous quarters. From October until March, the company sold only eight lots.

"It's been a while since we've had six sales in a month," Board Chairman Sheppard Miller III said. "That's nice to see."

East Beach is the site of Homearama this fall, which housing authority officials said has helped renew interest in the neighborhood.

"The economy is looking like it's starting to bounce back," Executive Director Shurl Montgomery said.

East Beach has taken the place of once-blighted homes and apartments in Ocean View. In the 1990s, the city spent $55 million to buy and tear down 1,600 buildings and relocate hundreds of low-income residents from the property.

Last month, the housing authority restructured its remaining $1.4 million loan on the project, extending debt payments until 2014. Refinancing was needed because income from lot sales had also slowed. Now, all of the project's deadlines are the same, Montgomery said.

Meghan Hoyer, (757) 446-2293, meghan.hoyer@pilotonline.com