PORTSMOUTH
The company that manages the Portsmouth Renaissance Hotel & Waterfront Conference Center sent a letter to the City Council objecting to state Sen. Louise Lucas' proposed competing venture.
Cash flow and occupancy rates at the city-subsidized Renaissance hotel and conference center are already down, wrote Dave Durbin, the president and chief executive officer of Crestline Hotels & Resorts.
"Another full-service hotel property with even remotely comparable meeting facilities would be a devastating blow to the Renaissance's future prospects," the letter says.
If anything, the project would help the city's only other conference center by providing more bed space to attract larger events to the city, Lucas said Monday.
"I don't understand why people have not seen this project as being an economic boost," the Portsmouth Democrat said.
Lucas wants to build a $65 million hotel and conference center. Construction on the project would begin in November and finish by April 2010. It would include up to a 250-room hotel and 50,000-square-foot conference center with a 16,000-square-foot ballroom off Interstate 264 at Victory Boulevard.
The hotel and conference center would employ about 36 full-time employees with salaries that range from about $30,000 to $45,000. They also would generate about $912,000 in real and personal property taxes per year, according to paperwork Lucas submitted to the city.
The council is scheduled to vote tonight on whether to authorize up to $50 million in federal bond financing for Lucas' project. While the city has not committed to financing the project, the council's vote could enable Lucas and the project's more than 600 investors to obtain low-cost financing from a private bond underwriter.
The Norfolk City Council also must vote to support Lucas' use of the bonds.
The issues raised in the letter are legitimate, Vice Mayor Bill Moody Jr. and Councilman Doug Smith said.
The Renaissance is the most important public investment in an economic development project that the council has made in downtown Portsmouth in the past decade, Smith said.
The Renaissance is a public-private partnership in which the city took on debt of nearly $40 million. About $13.6 million came from private sources, according to a presentation in May by Portsmouth's chief financial officer, Betty Burrell.
The city pays $2.5 million in debt service on the hotel per year and expects the obligation to add up to $72.9 million over 30 years, Burrell said.
Durbin wrote that the Renaissance "required a significant subsidy to become reality prior to its opening in 2001."
"Since that time, very little has changed within the city of Portsmouth, despite promises of further economic development and a continued effort to develop the waterfront area adjacent to the property into a first-class office, residential and retail center," the letter says.
The Renaissance's occupancy rate is down 7.6 percent to 64.8 percent, the letter says. Net cash flow from operations from January to May is down nearly 14 percent from a year ago, Durbin wrote.
Meanwhile, 1,563 new hotel rooms have been added to the market area in the past year, Durbin wrote. Some of those rooms are in the northern Suffolk area, adjacent to companies that had provided business to the Renaissance in the past, Durbin said.
"With no new 'demand generators' within our market, this trend will continue," Durbin wrote.
Portsmouth's economic development director, Steven Lynch, refused to comment on Durbin's letter.
The threat of competition, however, is not a reason to oppose Lucas' project, Councilman Steve Heretick said.
Moody said he plans to base his vote not on the issues raised in Durbin's letter, but on whether the project would require potential financing from the city.
In December, Lucas requested $13 million from Portsmouth for the project. Since then, she has said she wants to finance the project without city funding.
"Nobody's convinced me that money won't be needed," Moody said. "I can't think of any hotel that's been built in this region recently without any city money."
Staff writer Meghan Hoyer contributed to this report.
Jen McCaffery, (757) 446-2627, jen.mccaffery@pilotonline.com
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it's probably too late...
But maybe one of those judges should consider issuing an injunction blocking the vote, until such time as it can be discussed and negotoated in their new courthouse overlooking the newly-cleared lot where the old church stood.
I wonder if Lucas plans to hire Buddy Gadams to oversee construction of her money pit.
Invest in the waterfront
Invest in the waterfront and High Street.
Victory Village will be doing fine as is once the housing market takes a turn. If a business wants to build a hotel there, let them pay for it.
High Street, waterfront, amphitheater and Renaissance are a nice anchor for downtown. Get your heads straight and re-focus building that area. Huge potential downtown, but it just sits there with little improvement.
Hell, can't even get the lot where the church burned down months ago cleared out! Or how about that $50 million going towards the new court house I keep reading the judges are up in arms over.
Illegal use of power and waste of tax money
Many people commented on this huge waste of tax payer money a few weeks ago. Now the article sounds even more over the top with flat out untruths. There is most certainly a beautiful meeting place for each and every group the article mentioned right there in faboulous downtown Portsmouth so take that reason away and what is left? A relatively few friends of Senator Lucas want to help her make a lot of money at the TAXPAYER'S expense. It is not right to waste my tax payments on a project that is not needed and will not provide affordable housing to the citizens of Portsmouth which is what the funds are supposed to do.
Corruption !!!!
It's nice how the comments are silenced when they amount up to mass public outrage. And you can't comment on a one sided article.
The press keeps putting a nice spin on Ms. Lucas's private project.
Bonds are put up to insure a projects completion and that all the bills are paid. If the bonds are approved by portsmouth and Norfolk no matter what the article says, those cities will be left holding the bill.
This went from a black empowerment project to a wise buisness move for growth in Portsmouth.
They will paint this anyway they can.
PORTSMOUTH IS RIDDLED WITH CRIME, INFRASTRUCTURE IN NEED OF DESPERATE REPAIR, SCHOOLS NEEDING REPAIR. But who needs a safe place to raise a family when you have a conference center for sorority girls.
They all need to be brought up on corruption charges.
Call it what you want, this is wrong.
Downtown
And what the city really needs to do is focus on that waterfront first to make it an attractive destination. Try to create a restaurant row like Granby Street so it's a destination. THEN see how hotel occupancy is and/or if hotel expansion is necessary.
What is Portsmouth THINKING??
"Moody said he plans to base his vote not on the issues raised in Durbin's letter, but on whether the project would require potential financing from the city."
Straight cash financing may be off the table but the approval of preferential federal bond financing (that I can't get as a citizen) is a backdoor way of achieving the same thing. The Renaissance is hurting by itself and is a wonderful facility, with a full time sales staff. Does the city really think things are going to improve by adding more rooms to the city inventory. Both properties will fail.
If she wants to build a meeting room with her own money then let her. Adding a hotel is another matter.
"Portsmouth's economic development director, Steven Lynch, refused to comment on Durbin's letter."
He doesn't have to, he already approved the bonds. What a joke. He's a copout.
So then...
If Portsmouth subsidizes the current hotel, and it begins to lose money due to competition, then the city is defacto adding money due to Lucas' project by proxy. I do not see where it matters how the city ends up spending money. What matters is if this project will in fact cost the city more moeny. The downtown area is not ready to stand on it's own yet. In addition, the 'investors' involved w/ the Lucas project have made it clear where their money will go and it will not be downtown.
Talk about shooting yourself in the foot. What bothers me most about her involvement is that I do not believe the proposal would be possible w/o her involvement in public office. It's a sad day for democracy.
I know
"I don't understand why people have not seen this project as being an economic boost"
. . . because it's not.
The problem shows
This is why public-private partnerships are a bad idea. Government should not be investing in private business. It's a lose-lose for the taxpayer. It's not a function of government, and not the best use of tax dollars.
Alrighty then!
After reading another article about the "investors" on this project I learned that Norfolk City Councilwoman Daun Hester is one of them. I wonder if she'll be abstaining from the vote when it comes time for Norfolk's approval or disapproval? Inquiring minds want to know!
P-Town needs Another Conference Center?
Who goes to Portsmouth for their conferences anyway? And with a nearly empty Renaissance conference center already on the ropes nearby, this appears to be a pork-barrel project by the good Sen. Lucas. Well the good news is, with her credentials, once she is recalled by the Portsmouth citizens over this debacle, she appears more than qualified to migrate to Norfolk and hang out with Fraim, Riddick, Williams et al.
65 Million buys 36 full time jobs.
It will only cost $65 million for 36 full time jobs.....WOW what a bargain. Which of Lucas' friends and family will get those 36 jobs???
WHAT !!.
"The threat of competition, however, is not a reason to oppose Lucas' project, Councilman Steve Heretick said."
When you are a partner in a competing business (you know the city of Portsmouth and the Renaissance which is costing the city 1.5 mil a year), competition is a valid reason to oppose a project. IT IS NOT IN THE BEST INTEREST OF THE CITY. Makes one wonder if the Queen has promised Heretick a bellboy job if he votes for her project.
Annual conference / convention planning.
Good morning everyone we have the final locations for our annual convetion. The contenders are Atlanta, Las Vegas, New York, Baltimore, Jacksonville, Atlantic City, Memphis and Portsmouth. In front of you are folders full of attractions from all the locations and an envelope from Portsmouth. Please think long and hard on your choice. Thank you.
The other article
In the other article in today's Pilot Online (that you CAN'T add a comment to), Lucas states that she and her colleagues have to "go out of town" to hold an event. Are they boycotting the Renaissance for some reason? The organization that I work for has had functions at the Renaissance, and every time the event was handled very well, the facility very welcoming, and the food was respectable. While I am all for adding to the economic well-being of Portsmouth, Ms. Lucas' justification for building her facility doesn't hold water. Portsmouth does have a first class arena for any event in the Renaissance. She should be supporting the economy of Portsmouth by utilizing the resources we already have to offer. The Victory Crossing area must be used for retail and services to support Tidewater Community College and Newport at Victory development. That is where are tax income will come from in the future. Look at the development around other TCC campuses. Build it and they will come, and they will spend money, too.
The Renaissance needs to be more sorority friendly
In another article today, the list of investors in Lucas' Golden Parachute were listed. It seems their driving motivation is to build a facility where they can hold sorority functions. Seriously. That's what they are saying. Apparently, there is no where in Portsmouth where these functions can be held. I feel so sorry for them - but mostly for us because we are being stepped on by elected officials who don't care what we think. I'm also sad that the newspaper is so unwilling to act like a newspaper and actually dig into this. Instead, they write a fluff piece and shut off reader comments. Guess why? They know the common man would rip that lame story to pieces.
What next??
I guess that the city should just buy her a house with tax money too. I am glad that I do not live in Portsmouth. I hope that the people of this city one day will see the light of the on coming train that will run them over.
ANY FOOL KNOWS THIS WILL COST PORTSMOUTH CITIZENS MONEY!!!!
You can flour this LUCAS project any way you want to, but when you fry it up, it will still be GREASY!!! There is a citizen movement underway in Portsmouth to collect names for the recall of Louise Lucas and any others involved in Portsmouth City government that have financial ties to this project. It seems that those on the City Council have decided not to consider the cold hard facts Mr. Durbin supplied concerning the current subsidy, $2 million annually, for a convention center that is currently way underutilized. So just go ahead and throw more of my tax dollars away, but remember, if you approve Lucas getting the bonds and not if but WHEN she defaults, that money belonged to me and the rest of the citizens of the United States. IT IS NOT FREE MONEY and IT DOES NOT HAVE AN EXPIRATION DATE, as LUCAS and her attorney NUSBALM would have you believe. If this money isnt used for this project, then it can be reallocated for future projects that might benefit working taxpayers and not just a SELECT few. I have never seen a dollar go BAD, except in the hands of a politician!!!