VIRGINIA BEACH
Harmony Hospitality, a local hotelier bidding to build a four-star hotel at the Oceanfront, has agreed to buy 23 acres on Greenwich Road from Landmark Communications Inc.
A Landmark official said the price was between $10 million and $12 million.
The preliminary deal could close this summer, said Page Johnson, president of Harmony Hospitality of Virginia Beach.
The land is in two pieces, near Interstate 264 and The Virginian-Pilot's production facility. Landmark, a Norfolk-based company, is the parent company of The Pilot.
One parcel is 17 acres, across the street from The Pilot's plant. The other 6 acres are next to the east end of The Pilot production building.
A marketing flyer shows the assessed value of the land at $2.2 million.
Johnson said he envisions building a mixed-use development there, with a hotel, office space and residential units.
"We're working on site work right now," said Johnson, whose company was one of four to submit plans this week to build a headquarters hotel for the Virginia Beach Convention Center.
Mark Warlick, senior vice president of S.L. Nusbaum Realty Co., said seven offers for the property were received. The asking price for the land was nearly $10.4 million.
Rusty Friddell, the general counsel for Landmark, said the sale price was between $10 million and $12 million.
He said Landmark received higher bids, but some came with conditions, such as city approval for rezonings.
The land is currently zoned for offices. Plans to build a hotel would require city approval.
"We like the fact that they had the highest bid with the least contingencies," Friddell said, adding, "We also know the Harmony people, and their reputation in the real estate world is once they make a deal, they close, and they close promptly."
In South Hampton Roads, city assessments show Landmark and its affiliates own 30 properties worth about $72 million. The company is exploring a sale of the newspaper and its other assets.
Bruce Bradley, The Pilot's publisher, said the land was not being sold for an influx of cash. Friddell added the land was sold because a buyer of the newspaper likely would not pay full value for the land.
A buyer "would be pricing the acquisition based on the long-term earnings capacity of the newspaper," Friddell said. "A 23-acre vacant lot does not have any positive role in the financial projections. They wouldn't give us any credit for it."
Landmark recently hired S.L. Nusbaum to market the properties on Greenwich Road. The land across from The Pilot plant has a long history.
In 1986, Landmark announced plans for a $40 million office park there. Warlick used an old site plan to show bidders what could be done with the land. He updated it to show how a light rail line - currently under construction in Norfolk - would pass just behind The Pilot production facility if Beach leaders approve it.
Richard Quinn, (757) 222-5119, richard.quinn@pilotonline.com