Developer, Norfolk abandon lease guarantee for office building

NORFOLK

Faced with certain defeat, developers withdrew their request to the City Council on Tuesday for additional incentives to construct a $32.7 million office tower in a low-income neighborhood.

The council had previously approved leasing 60,000 square feet in the Midtown Office Building for the city's Human Services Department. However, it balked when Tivest Development asked the city to guarantee taking over 65,000 additional square feet should a private social service organization not be able to pay its rent.

Mayor Paul Fraim, who backed the project, said the odds of that happening were minuscule, but council members said the public reacted sharply once word of the proposal broke Monday, showering City Hall with e-mails and telephone calls.

Sheriff Robert McCabe had signed up to speak against the project but didn't because it did not come to a vote.

Dwight Etheridge, who heads Tivest and grew up in a public housing project a few blocks from the office building site, said he hopes the council will reconsider. Etheridge said the media coverage of his proposal was unfair. He said the project would produce more than $300,000 in yearly tax revenue for the city.

"I want to take the next few weeks to talk to council members about how this project is good for the city," he said.

The Southeastern Tidewater Opportunity Project, a 46-year-old private social services organization funded largely with government money, would have leased 100,000 square feet. STOP would have consolidated all of its offices from other cities to the facility, bringing 150 jobs to Norfolk.

The council approved a deal with Etheridge last year, but he was unable to obtain financing. He said prospective lenders insisted that the city guarantee STOP's lease.

"I would love to see this project happen, but I can't support a guarantee for an organization that is out of my control," Councilman Andy Protogyrou said.

Councilman Paul R. Riddick said he wished the council "had looked at the intangibles" in the Tivest proposal. He said the six-story office building would have been located in one of the region's most impoverished communities, at the corner of Tidewater Drive and Virginia Beach Boulevard.

"The men and women who live in that area see drug deals daily," he said. "Instead, they would have seen a new office going up. This would have been a great project."

Fraim said that if Etheridge is able to obtain financing without additional city help, Norfolk will partner with him.

The council met behind closed doors for about 20 minutes to talk about a prospective lease for its Human Services Department. The city's lease on 60,000 square feet of a building just north of downtown on Monticello Avenue expires July 1.

Vice Mayor Anthony L. Burfoot said he urged the council to move Human Services temporarily to the second floor of Waterside, a move he said would save the city money.

"That way we won't be rushed into making a decision," he said.

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