VIRGINIA BEACH — When Town Center developer Armada Hoffler staff saw that city hall could make a move to its turf, they sent officials an unsolicited proposal to bring it closer to the heart of the area.
The catch? A land trade that could bring $100 million in additional capital to the city’s strategic growth area, according to Eric Smith, Armada Hoffler chief investment officer.
City manager Dave Hansen reviewed the proposal with city council Tuesday afternoon.
“We very much believe in the value of this proposition of bringing city hall, and having the center of business and commerce co-located with the seat of government,” Smith said.
“City hall moving to Town Center on the Columbus Village site would be a meaningful catalyst that we could easily support putting in the type of money we’re talking about on the private side.”
For about a four acre site where Regal Cinemas stands off Constitution Drive, the interested developer wants the city’s 3.7 acre plot of land on Independence Boulevard and Garrett Drive where Circuit City used to be.
Hansen recommended the city move forward in conducting a land appraisal of the old Circuit City site for an “apples to apples” look at a potential trade.
“We saw an opportunity, instead of the Circuit City site, to move it over to the Columbus Village site … where it could then not just be a stand-alone decision, but be the catalyst for a large sum of additional investment from the private side in a magnitude of $100 million,” Smith said.
A city hall at Columbus Village would be 95,650 square-feet with a proposed central “green space” at 51,200 square-feet, according to Hansen’s presentation.
Hansen also said Armada Hoffler would be willing not to exceed a $56 million cost to build a city hall, which is the average of all eight proposals the city has received so far.
Where people will park is a large proponent in the developer’s willingness to invest additional capital in the area, according to Smith.
According to Hansen’s presentation, the proposal has plans for a parking lot across the street from where city hall could go — a multi-story structure with 1,283 spaces. Armada Hoffler’s rendering showed that Regal Cinemas could relocate above the parking garage.
Smith said the garage can accommodate necessary parking, and be funded by tax-increment financing, which uses city real estate taxes to fund developments.
“It’s that same [tax-increment financing] structure that supports a public garage, which makes it all possible,” Smith said. “It really leverages that in that it serves the very people that would be coming to city hall.”
Smith said investing $100 million in capital for the Town Center’s next phase could happen without the city hall move, but it would be difficult without the city’s help in building a parking garage.
“Without that, it just becomes incrementally more difficult to find the opportunity to invest that amount of capital and get the required reasonable return that we need on our side, on the private side,” Smith said.
Hansen said if the city accepts Armada Hoffler’s concept, a 60-day window opens for other developers to compete with their own offer for consideration. After that, staff would engage in public information outreach about a new city hall.
Council members James Wood, John Moss and Robert Dyer voiced concern about the proposal.
“We are a magnificently run city, but sometimes we get into problems with the way we do some of these the public-private deals,” Dyer said.
“The thing is, once again we have the perception among many that we don’t have a level playing field in this city in that we give consideration to a list of small, select developers … absent also is a discussion among council giving direction as to whether going to Town Center should be an option.”
Dyer said he has confidence the developer can come up with other things for Town Center to grow and expand.
“Even before we get to the first meeting, that we as council have a discussion to determine where the direction should go,” Dyer said. “But right now, I’m pretty uncomfortable taking this forward to the public without a clear message from this body.”
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