VIRGINIA BEACH – The city will move forward with plans to contribute $10.2 million to a large private project on the edge of Town Center.
The City Council on Tuesday approved a non-binding term sheet for a $62 million development called “CityView Two” that includes a hotel, office space and hundreds of apartments. The vote allows the city manager to draft documents for a formal agreement before construction can begin. The City Council will have to approve those documents to make the deal official.
“We want this project to get going and get started and get finished,” Deputy City Manager Doug Smith told the Virginia Beach Development Authority earlier Tuesday.
The Development Authority recommended approval of the project.
Robert Dean, a City Council candidate and chairman of the Tidewater Libertarian Party, told the council the project is “disturbing” and “the antithesis of capitalism.” He was the only speaker in a public hearing before the vote.
The city’s contribution would be capped at $10.2 million and come from no more than 25 years of real estate taxes on the project.
The project, proposed by Ripley Heatwole Company Inc., is planned to be built in three phases on the corner of Constitution Drive and Bonney Road.
The first phase is estimated to cost $44.4 million and includes two towers that will combine for 13,500 square feet of office space and 202 apartments, and a seven-story, 481-space parking garage.
Some of those parking spots will be available to the public in return for the city’s financial help, according to the developers.
The second phase is a $5 million, three-story office building with 24,000 square feet for rent. The third phase is a $12.6 million hotel that would have between 110 and 120 rooms and space for offices and a restaurant, according to the term sheet.
Developers say that without the city’s aid, the project would be scaled back to a suburban-style development that would likely lack structured parking and a hotel, according to the resolution passed by the council.
The city retains the right to terminate its payments if the hotel phase is not under construction within three years of the second phase’s completion, or if it is not completed within six years of that same milestone, according to the term sheet.
Smith said the project has been in the works since 2010. Development Authority Commissioner Linwood Branch said that lag time proves the developer needs the city’s help.
“I would support this,” Branch said.
Council members Rosemary Wilson, Shannon Kane and Bob Dyer were absent, and Mayor Will Sessoms abstained. The vote was 6-1. Councilman John Moss cast the lone dissenting vote.
Southside Daily business reporter Hillary Smith contributed to this report.