Vice mayor's decision ended debate on Va. Beach hotel deal

VIRGINIA BEACH

Vice Mayor Louis Jones walked into Mayor Will Sessoms' City Hall office last Tuesday afternoon with a message: He was against the proposed four-star Hyatt hotel next to the Virginia Beach Convention Center.

When Jones turned, Sessoms, who'd been leaning strongly in favor of the project, knew he didn't have the six votes needed to pass it, he acknowledged in a subsequent interview. He also said Jones swayed him.

"I have tremendous respect for the vice mayor," Sessoms said. "That changed my mind."

The next day, Sessoms penned a letter saying he was also now against the public-private partnership, which had called for the city to front nearly $67 million of the $109 million needed to build the 361-room hotel. Sessoms said the city investment was too great.

Just like that, after six weeks of furious lobbying by supporters and opponents, the debate was over.

The proposal had surfaced publicly in The Virginian-Pilot over Thanksgiving weekend. It was quickly evident any vote on the 11-member body would be close when five council members immediately came out against the hotel, citing the public investment.

City officials who supported the hotel said it was needed to help Virginia Beach compete for conventions and would pay for itself in the long run, recouping costs through new tax revenue.

In late November and early December, angry residents bombarded City Hall with emails. Almost all were critical, citing the city's $90 million budget deficit, the new $10-per-month trash fee and the general state of the economy. Some threatened hotel supporters with political consequences in the November election. Sessoms is among those up for re-election; Jones is up in 2014.

One resident called the hotel a potential "revenue sucking black hole." Another wrote: "Please don't move forward on this one.... Now is not the time." Others resorted to all-capital letters: "I OPPOSE THIS OUTRAGEOUS SLIPPERY PLAN YOU HAVE UP YOUR SLEEVES."

The city's unusually speedy timeline to decide on the hotel deal - the first public presentation was made to the council on Dec. 6 and a public hearing and final vote were set initially for Dec. 13 - outraged some.

"We should know well in advance what folks entrusted with our money are thinking. It's not your money to spend as you please," wrote one resident.

The timeline upset some council members, too.

"I was not comfortable with it all," Councilman Harry Diezel said recently. Diezel did not take a public stand initially and was seen as a likely swing vote.

On Dec. 2, Sessoms called for a postponement of the vote. He said the city and residents needed more time to digest the complex terms.

The same day, Sessoms sent a letter outlining his support for the hotel to businessman Scott Taylor, who unsuccessfully ran for mayor in 2008. The letter was a rebuttal to a short essay Taylor had distributed a few days earlier criticizing the hotel proposal.

In the three-page reply, Sessoms outlined his support, calling it "a good deal for citizens and the city's thriving tourism industry."

"He was 100 percent for it," Taylor said recently of Sessoms.

At the Dec. 13 public hearing, opponents of the project, outnumbering its supporters, swarmed City Hall. Many said the city should consider an alternative offer that involved converting the existing DoubleTree hotel near the convention center into a headquarters hotel. A second public hearing on the Hyatt deal was scheduled for Jan. 10 and a vote set for Jan. 24.

A group representing the business community, Virginia Beach Vision, came out in favor of the Hyatt hotel deal on Dec. 30, and members planned to speak at the January public hearing. They never got the chance.

On Jan. 4, Sessoms sent his letter to the City Council canceling the public hearing and vote, effectively killing the project.

"Didn't see it coming," said Martha McClees, Vision's executive director. "If Louis Jones and the mayor oppose it, there's no point in having a vote because it's pretty much done."

Members of a city advisory committee on the hotel also favored the project and were prepared to deliver a report at the public hearing.

"This was a reasonable deal," said Robert Goodman, an attorney and committee member who wrote the report. He said it was rejected largely because of a "political misunderstanding by the public that the money wasn't coming out of their residential property taxes or fees."

Much of the public money to pay for the hotel would have come from a city fund that derives much of its money from activities such as taxes on hotel stays, meals and entertainment.

"I've got to believe the mayor and vice mayor are influenced by the politics," said Mike Barrett, a Vision member and vocal supporter of the project. "The opposition was intense and in my view irrational."

Jones said he opposed the deal for business reasons, including the lack of a fixed schedule for the developer to repay $19 million in city loans.

"I didn't really make a decision based on the public backlash," he said. "I was looking at the details of the business agreement. I tried to make a business decision, not a political decision."

Aaron Applegate, (757) 222-5122, aaron.applegate@pilotonline.com