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Advocates for a headquarters hotel at the Virginia Beach Convention Center are right that it's a worthwhile amenity, that it would boost the city's lucrative tourism industry, that it has potential to spur the revitalization of 19th Street.
And they're right that Virginia Beach has lost business to the cities it competes with for conventions - Savannah, Myrtle Beach, Charlotte, Richmond, Louisville, Baltimore, Raleigh and Nashville - because those cities built a hotel next to their convention center.
But it's not clear that a $109 million, four-star headquarters hotel would amount to a game-changer for Virginia Beach, enough to warrant investing tens of millions in tax money and taking on more long-term debt. And it's not clear, with the convention business stagnant, that the Beach isn't doubling down in a game of diminishing returns.
A consultant's projections - 900 new jobs in Virginia Beach, $4.3 million in additional tax revenue annually and 96,000 more hotel stays - bank on booking 59 new events, the equivalent of 20 Shriner conventions every year.
The state-of-the-art convention center is bringing little more than half the visits from conventions and trade shows that a 2000 study predicted. City officials say that's mostly because Virginia Beach lacks a top-quality hotel on site.
Even opponents of the current proposal agree that a hotel at the convention center is a necessity. They object to the level of public money being used.
The deal to get a 361-room Hyatt Regency across the street calls for a public investment of $34.7 million in additional conference and banquet space, $8 million for street-scaping and a bridge to the convention center, $19.1 million in loans to developer Armada Hoffler and a $4.8 million economic development grant.
That's too much from the taxpayer and too little from the developer. The city needs to find a better deal for the project.
The public's share would be paid from taxes on meals, admissions tickets and hotel stays - the majority of which are paid by tourists.
City officials argue that the proposal holds taxpayers harmless, that revenues from the project will exceed the costs of debt service and other annual payments.
But that is still not reason enough to spend $67 million in public money, especially when other opportunities for economic development make more financial sense and have greater potential to draw people and transform the resort area.
One in particular - development of the Dome site into an entertainment complex - is in the pipeline, said to be coming before the City Council within a couple of months.
Even the strongest advocates for the hotel acknowledge they'd pick the Dome project if they had to choose between the two. But they say Virginia Beach can do both because tax revenues from these projects, not the general fund, will pay for them.
This decision is critical for the City Council, which is split 5-5, with one unknown. Mayor Will Sessoms delayed the vote a month ago to give the public and the council more time to study the deal, but now the vote is set for Jan. 24.
The delay has not made such a heavy investment of taxpayer dollars seem much wiser. Many question spending $67 million on a hotel, particularly at a time Virginia Beach has a $90 million hole in its budget.
Virginia Beach has made prudent decisions in the past to improve the quality of life for its residents, to provide impetus for more private investment. It has preserved thousands of acres of open space, expanded the Boardwalk and the aquarium, built a performing arts center and, using public-private partnerships, jump-started redevelopment in the resort area and at Pembroke with Town Center.
If the future of Virginia Beach depended on building the hotel under these terms, voting for it in the face of such public opposition would make sense.
But implying that the city's success in luring tourists to the resort area depends on Virginia Beach approving this hotel right now undermines the other great work under way here.
If the convention business has stalled, as studies indicate, Virginia Beach needs to pursue investments that make more sense. Such projects could provide leverage to forge a better deal in the future on a headquarters hotel.
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Perplexed?
Perhaps it would have been wiser to put off writing this editorial as it is clear that you are conflicted. Frankly, as a proponent, I found all the reasons why I support this PPV in your editorial, yet at the end, you make a perfect deal the enemy of a good deal.
Perhaps at some time in the future, a better perfect deal could be negotiated, but factors that favor this deal, that is, low construction costs, low financing rates, clear evidence that we would gain business we are now losing, may not exist at some future date. Further, this process was not taken lightly; it was negotiated under the state's PPEA statute, and in my view, when parties have negotiated in good faith, unless there is some unforeseen problem, the deal, intended to follow through on the promises of a majority of elected official members of Council, should be honored.
You even commend the Beach leadership for its past initiatives which have benefitted the City both fiscally and in the provision of quality amenities. And it is beneath you to confuse this capital investment with the normal give and take of the annual budget process. Regretfully, this editorial has not provided clarity nor sufficient rationale to alter the most beneficial course this and past Council's have taken to stimulate quality growth to keep our tax rates low.
You imply some other initiative may further Council's goals, yet this has been a priority over many Council goal setting meetings. It is time to act and act boldly.
"negotiated under the state's PPEA statute"
Afraid to be exposed to the light of day until after it was supposed to be approved.
If it is indeed time to act boldly,
Then you need to do it with YOUR OWN MONEY, Mike-not the money that is taken by force from the taxpayers.
As reported, our municipal budget is facing yet another 90 million dollar hole that will have to be made up with A) Tax Increases, B) Fee Increases, C) Reductions in Services, D) Staffing/Pay Stagnation, E) All of the Above. There's just no way around it.
Tell me, if Town Center, the 31st Street Hotel and all of these other Public/Private Partnerships have been, as you yourself have stated, so "successful" then under your logic, we should never have a budget shortfall at all and should have started reaping budget surplus after budget surplus long ago-but it hasn't happened yet and at current, it's not going to happen in the foreseeable future with all of this debt you want the city to place on the backs of the taxpayers.
After this, as before, there will be ANOTHER project we "must build with public funds or we will lose money!" It's a never-ending cycle with your crowd.
Tell me Mike, do YOU know exactly how much the City of Virginia Beach owes it's creditors? I have been looking and can't find the exact number-and it makes me wonder how we can rate a AAA Bond rating without being able to produce that number. Your income-to-debt ratio is a critical factor in any credit rating so unless that number is known by SOMEONE, they're either misreporting to the bond agencies, lying to the public or the bond agencies are fools.
Now, how much of YOUR money can we count on?
...
Even opponents of the current proposal agree that a hotel at the convention center is a necessity.
......
No?
Seriously.
Who is going around who dislikes this plan -still- says a hotel is needed there.
I'm not saying it. Heck my employer isn't saying it.