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A Virginia delegate sent a letter to City Council this month supporting the Virginia Tourism Grant Program and the application of the 27th Street Hyatt developer for gap funding. Meanwhile, the City is learning more about the program and grappling with whether the hotel truly fills a tourism void.
The state established the grant program in 2011 to provide funds through tax rebates for projects that have a financing gap of no more than 30 percent. The letter from Delegate Matthew James, a Democrat who serves the 80th District, describes the tourism grant program as a catalyst for creating jobs and supporting the state economic initiatives. Matthews said the 27th Street application exceeds the program’s guidelines for receiving funding, and its approval process might currently be delayed for reasons that undermine the spirit of the program.
“We, the undersigned, are further writing to caution that all qualified applicants must be fairly considered based on the merits of their application without pause of bias,” the letter said. James warned that failure to follow the program’s guidelines “endangers the integrity of the legislation and jeopardizes the success of future qualified applicants.”
In late January, Mayor Will Sessoms called a 60-day moratorium on receiving applications for the program while Council and the Development Authority learned more about its process. In May, the developers of the 27th Street hotel requested their own application be delayed for more time to work with the City on enhancing the project.
A May letter to the Development Authority and Mayor Will Sessoms shows the developer’s request to defer consideration for the program for up to 180 days. “The developer looks forward to working with the City to enhance the application during the deferral period,” the letter said. The application is not being held up, Councilman John Uhrin said in a phone interview.
James said in a phone interview the letter was not intended to call out the City for a delay in the application, but was written to support the state legislation on gap funding.
“I understand delays may occur, however, the outcome should always be focused on a good project for the city that would result in economic opportunity,” James said.
James’ letter to City Council and the Authority came just a few days after a state official broke down the program in a presentation to the Virginia Beach Development Authority. The group had requested a full explanation of the program after a request this winter to use it for the 27th Street Hyatt Hotel project triggered a larger discussion of the program.
Last week’s presentation to council centered on how an applicant qualifies for the funding, with a primary factor being whether state officials believe the project fills a local deficiency. Authority commissioner Steve McNulty said last week the presentation was helpful to better understand the program, but he remained unclear on what was unique about the 27th Street Hyatt.
“It’s still not clear. At least to me it’s not clear,” McNulty said in an interview after last week’s presentation. “I just think there are already a good number of hotels at the Oceanfront. This particular Hyatt, it’s not a Grand Hyatt.”
Uhrin also said in a phone interview the hotel plans, as they are, don’t seem very unique.
“I think that’s kind of been the issue,” Uhrin said. “It is very similar in terms of size and quality level to hotel development that’s already been redeveloped.”
There may be other reasons the hotel could be eligible for the funding, but the current plans probably wouldn’t make the cut, Uhrin said.
Marc Davis, media and communications manager for the city, said the 27th Street application is expected back before Council in a few months. Mayor Will Sessoms said in a phone interview he’s looking forward to receiving an “enhanced application” later this year.
James’ letter is simply a reminder for City Council to do what it already does, according to Uhrin.
“I think it’s nice for the delegate to tell us we need to be fair and even-handed, but typically that’s what we do anyway without his input,” Uhrin said. “We certainly understand that importance, and we’ll make sure whatever council policy that comes forth will honor that.”