Norfolk City Council voted on Tuesday night to approve additional funding to the development of the proposed IKEA site. The additional $500,000 will be used for “unanticipated development costs” as cited by Charles E. Rigney, director of development and assistant executive director of the Economic Development Authority.
The vote was approved 7–0.
The extra funds will bring the city’s total contribution to $5.5 million.
As developers continue to draft and finalize plans of the 331,000-square-foot store located at 6000 Northampton Blvd., various challenges have arisen contributing to a loss of actual acreage on the development site and the need for increased funding from the city.
“Infrastructure-wise, it’s more costly than what was initially expected,” said Joseph Roth, an IKEA representative for U.S. expansion. “Our investment will also be increasing, so we’re asking for the city’s investment, as the seller, to increase slightly as well, knowing that tax revenue we contribute will offset the costs.”
In the application presented to city council Tuesday evening, Rigney stated that infrastructure improvements would need to occur for the retail store to see completion. These improvements will include elevating the site for stormwater retention. IKEA is also considering adding rooftop solar panels.
In addition, IKEA is now planning to build a parking structure that was initially scheduled for construction within a few years of the store opening. Due to a buffer zone of 25 feet around the Lake Wright reservoir, the store has lost needed space.
“We’re losing just enough acreage and we’ve lost just enough parking spaces that we feel comfortable building the structure right away,” Roth said.
With the additional funds from the EDA, Roth said that the IKEA location is on schedule to open in mid-2018 and will bring 250 full-time jobs to residents, as well as 500 construction jobs while the store is completed. The Norfolk location will be one of two Virginia stores.
Poulter can be reached at 757.620.2902.