VIRGINIA BEACH
Some city officials want taxpayers to shoulder more of the cost for the next phase of Town Center to keep it growing.
The public share of the upcoming $214.8 million phase of the Town Center project, which includes an Aloft hotel, 195 apartments, retail space, an office tower and a garage, is projected to be $56.4 million.
That's almost double the $28.5 million that Virginia Beach pitched in for the previous $228.5 million phase, which included the recently completed Westin Virginia Beach Town Center, a smaller office tower and condominiums. In that situation, for every dollar that the city invested, its private development partner, Armada Hoffler, put in $7, compared with the $2.80 it will contribute in the new phase.
The city needs to take on a bigger role now because Armada Hoffler can't finance the project otherwise, said Patricia Phillips, Virginia Beach's finance director. Construction costs have increased and office leasing rates haven't kept up, she said.
"The Town Center has become an economic engine - it's become an icon," Phillips said. "When the economy gets bad, the public needs to step in."
Not all council members agree. They learned earlier Tuesday that the city is facing an $81.2 million budget shortfall for fiscal 2009-10.
"I'm real uncomfortable," Councilman Bill DeSteph said. "We're saddling more on the backs of the taxpayers."
Under the proposed deal, the tax increment financing district fund, or TIF, would be expanded to pay for the additional costs.
City finance and economic development officials want to include a portion of hotel taxes, about $500,000 next year and $765,408 after the hotel is built, in the TIF fund to pay the debt service. Hotel taxes now flow into the general and major-projects funds, and they help pay for citywide services and landmarks such as the convention center and the Sandler Center for the Performing Arts.
The development of Town Center has generated $5.2 million, not including real estate taxes, for the city as of June 2008 - and the next phase will continue to bring benefits, Phillips said.
"We can't stop everything if we want to flourish as a city," Councilwoman Rosemary Wilson said.
The proposal calls for the city's development authority to contribute $3.5 million to pay for the conference center and streetscapes.
The city also plans to take out a low-interest, two-year bond anticipation note for $53.6 million. In 2012, the city would roll that note amount, plus $3 million in accrued interest and issuance cost, into a traditional 20-year bond.
The two-year note allows time for the hotel and office tower development to stabilize and build up tax revenue, said Mark Wawner, the city's project manager for Town Center.
Otherwise, the city would have to start paying the debt service on the bond immediately and would risk a future deficit in the TIF fund, officials said.
The city will get a 601-space parking garage under the 20-story office tower, with two fewer parking floors than initially proposed. Taxpayers will also get a conference center in the new hotel, street improvements, and city office space in two floors of the tower.
Armada Hoffler will have to repay the city $12.5 million for the land and initial costs over 20 years through conference center rent, profit-sharing payments and parking leases.
"We've worked hard on something that will work for everybody," said Lou Haddad, president and chief executive of Armada Hoffler.
The City Council is scheduled to vote on the agreement on Dec. 9.
Armada Hoffler still has to get financing for the project, and The Virginian-Pilot has yet to sell its 1.3 acres on Virginia Beach Boulevard to make room for the new office tower.
The City Council on Tuesday night postponed a vote on the agreement for the newspaper's property. The city had not received a signed copy of the agreement from officials with the paper.
Deirdre Fernandes, (757) 222-5121, deirdre.fernandes@pilotonline.com
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NO!
the unemployment rate is on the rise,that means more in payouts to people that lost their jobs,welfare benefits having to be paid out,and crime rate going up,and who pays for that?fix what we have here and now,you can build when the economy gets better and it will.this country is taking a downsize on its own.i think people are finally starting to wise up to the corrupt government we have had in the past.if your representatives don't do what we voted them in to do then vote their sorry a##$s out again.government is supposed to work for the people not the other way round.how many poor politicians do you see?when your representative does something that you do not agree with write them,flood their offices and make them explain WHY.i write my representatives office all the time and always get an answer back,by law that is their job.if you still disagree then start a petition.we need to do something and STOP the tax bleed on the common folk or this will never end.we need our jobs back in this country.look at our auto industry,that is a part of our history and a big part of this nation.together we stand,or god help us all!
NO!
What really burns me up is that the Council is seriously considering this plan.
Let's start using a new paragidm....if it won't fly without taxpayer money....the answer is NO!
This is above and beside the fact that we need road improvements, better schools and more cops....not more attempts to turn our City into Norfolk East.
CC Bails Out Town Center
Sounds like this is a bail-out for Armada-Hoffler and an attempt at face-saving on the part of City Council. The $5.2 million generated by this project for the city is chump change. Serious citizens asked serious questions about this project at its inception. Those questions were looked upon by those who were pushing this project with arrogance.
While other cities are trying to find ways to revitalize their downtowns, VB wants to expand. Interesting that office leasing has "not kept up." Is this the economic engine driving this decision? Unfilled office space? Now that's a good business decision. What about the residential property? Has all of that been sold or rented?
I am offended by the comment, "when the economy gets bad, the public needs to step in." No. When the economy gets bad, its the government that is suppose to help its citizens. Where do these people get this stuff?
I'm a teacher. Times are tough for all of us. I see it in the faces of the children I teach. Why should I or any other citizen in VB help a company whose top management is living in multi-million dollar homes and experiencing other luxuries that I'll never experience, nor the majority of the
All together now...
All together now can we say NO!
Town Center is Awsome
I love Town Center and think it’s a great concept and needed…but the construction costs look inflated...If it wasn't for that my vote would be yes....
But please nothing else at the oceanfront.....They need to help the existing business that have supported the Oceanfront for so long instead of running them out of business
Pay attention to the Demographics and stop trying to create new ones
Maybe class B that families can afford…
And some nightlife almost half of the visitors are unmarried….Are they supposed to go to their rooms after 12 when the City wants to shut everything down….
The police are out of control in number and attitude…It looks like a war zone and is flat out intimidating, uncomfortable and impossible to relax and have fun…
When was the last time you felt comfortable with the police behind you…Speeding or not?
Misinformed
Ms. Fernandez and her Norfolk newspaper did their usual job of leaving out important information so that the story is spun to meet their agenda. The fact of the matter is that each phase of TC is different and requires different city involvement. The last phase was a 1 to 7 ratio but the existing tower that is almost identical to this new tower was a 1 to 3 ratio of investment. What was pointed out at the City Council meeting which was suspiciously left out of this article was that when you are looking at the investment of the city and the developer in the Town Center project you need to look at the over all investment of ALL phases. Each phase is different and some require more city investment and some less. In this case the investment is 1 to 2.8. The overall investment in TC is going to be 1 to 4. That was not mentioned. The city is investing in the cities central business district and is being compensated for that investment through tax revenue not to mention increasing the ability of our city to promote high paying job growth. The TIF pays for itself through tax revevue. This investment is not the City stroking a check for $50M and high fiving Dan Hoffler as they wal
The vote is in...
It seems to me that both the citizens and developers have voted and this is a very bad idea. By my quick scan 36 out of 37 comments today voted 'negative'. The developers voted 'no' by only being willing to put up $2.80 for every $1.00 we put in as compared to the $7.00 to $1.00 perviously. The developers know this is the wrong time for this project.
Try again in 3 - 4 years.
Do What ?
Foot the town center bill yourself you big bad place called the City Of Virginia Beach !!! In case you hadn't noticed we are in a recession that hasn't even hit bottom yet and your asking John Q. Taxpayer to put more into the vast WASTELAND you are calling Town Center. The taxpayers budgets are already pinched beyond belief. Fund Town Center yourself. Maybe you should check what your putting in your pipes to smoke these days. Reality check...
this is nuts!!
We, the taxpayers, are once again going to build a business because they don't want to? We have a large budget shortfall don't we? One of the recently relected council members, rose, thinks it's a good idea? You folks who voted for her must be tickled pink huh?? The mere fact that this is even being discussed as people are going belly up is crazy! Sure we'll be seeing comments from mike bartlett in favor of this "terrific" idea soon on here too. Pathetic and to think we have the power to change things and don't is sad.
Balance The Budget First
When I was young I had a wish list which I gave to my parents. My parents would say there are some things we can afford right now but the others will have to be put on the back burner. When I became an adult and on my own there were times I wanted things but at that time I couldn't afford them and on the back burner they went. The same when I got married. Well now the city should be more concerned with balancing the budget being we are in arrears of $82 million or more and the wish list for Town Center which only a very small portion of the citizenry of VB utilizes should be put on the BACK Burner. Mr. Spore should realize this as should the members of city council and not be holding a vote on Dec 9th. The needs of the citizens comes first and Plan 4 for the Town Center IS NOT ONE OF THEM. I see the ratio with the builders was 1 to 7 and now with the new plans anc cost it will be $1 citizens and $3 from the builders. If the builders think it is great then why aren't they footing the whole thing?
BAD IDEA - Good ones pay for themselves
If a project is truly worth doing, the private sector will fund it ALL.
No way, no how
Let the businesses there or those that want to reside there fund it. There is no good reason for the taxpayers to fund this project, especially since the city refuses to do anything about the traffic problems in the area or get around to building a pedestrian walkway over VA Beach Blvd.
Well . . .
we voted in development-at-all-costs Will Sessoms as mayor. We're getting what we voted for. A higher percentage of the money for the development projects coming from *us* and a lower percentage coming from *the developers*.
TERRIBLE IDEA. Just when
TERRIBLE IDEA. Just when the city is facing a huge deficit, we're going to subsidize the development of the VB council's pet project, the creation of an afterthought artificial downtown? I don't think so. I know the council is greedily projecting higher densities and rising city revenues, but we already know that whatever the tax base, they will far overspend it. Let the market create our downtown, if any is to be created, the way all downtowns are made... step by step, over a period time. Let the city council realize Virginia Beach's identity before foolishly and expensively deciding to adopt the identities of our neighbors.
Wait
If the developer can't get the funds, then the project should wait. Tax dollars should be spent on fixing the interchange at Independence and 264 first, before more construction is started in Town Center.
This is what happens,
when a rural & suburban area is "created" as a city, in a failed attempt to avoid the failure of "Massive Resistance". Those of you not around this area in the late '50s, early '60s; You ever wonder why Va. Beach had no downtown? Planned cities, created during the period the Beach developed into the hodgepodge of confusion it's become, were just that, planned. The Beach was developed through fear & racist attitudes, which resulted in White Flight from Norfolk, greed, from unscrupulous developers, & an inane desire by some leaders to outdo Norfolk & the rest of Tidewater. The NFL, NBA, MLB & Monte Carlo style auto racing, all had interest in coming to this area, in the '60s & '70s. The Beach leaders always insisted on everything being at the Beach or named for the Beach or both & generally wouldn't cooperate with the other cities or the league officials. Light rail was proposed, with the feds picking up most of the tab, over 30yrs ago. Beach leaders put a kink in that.
What?
What large businesses has Town Center actually brought to Hampton Roads that didn't already exist, that pay wel? Don't forget the houses in Virginia Beach will go down to 2001 values, which will create even less income for the developers to use to build their "icons." Should have saved for a rainy day. I said that on here.
Did I not just read an article of VAB being $81M short?
To quote from article "Patricia Phillips, Virginia Beach's finance director. Construction costs have increased and office leasing rates haven't kept up. The Town Center has become an economic engine - it's become an icon. When the economy gets bad, the public needs to step in." Perhaps VAB needs to fire her and hire a "Finance Director" that understands that when there's a recession going on, the taxpayers are already being pinched, so putting more tax on them to fund a developers scheme is NOT in the city's best interest. Keep in mind the "city" is the citizens. Phillips even admits that office leasing rates haven't kept up. That means that in order to lease an office or other space, they have had to reduce the rent so low that it is not a revenue producer. In other words, BAD ECONOMY. In my home, we buckle down durring times of financial hardships, we don't try to spend our way out of it. The taxpayers (city) is tapped out, stop wasting tax dollars.
taxpayers??????????????????????
any taxpayers I know are tired of footing the bill for development, make the developers foot the bill , taxpayers in va beach want the roads fixed and the tax burden's lifted ,taxpayers want our property taxes lowered , how does the city go from a surplus one year to a 82 million dollar short fall in just one year ,sounds pretty fishy to me taxpayers tell the city of virginia beach and your city elected reps see this is the key word( elected) , we didnt elect these people to cater to developers, taxpayers say no, tell your city reps to look out for the people who got them elected not developers ,
5.2 million return over ten years?
Town Center has returned 5.2 million in ten years? What an investment!!! In a 1.2 billion dollar budget, a $500,000 yearly return on the tens of millions we have already invested is a joke. Now you want to invest 56 million more and stop the general fund from getting the town Center return too? Are you nuts???
How about we wait to see if the depression turns around before we spend this money?