The long journey throughout the last 12 years from the first questions about the old Pavilion to the current decision to proceed with a headquarters hotel for a convention center has been an especially devious journey. The trek began in the late 1990s and has included a number of decision points all of which puts the Virginia Beach City Council in a position, by spending more citizens money, to build the headquarters hotel for the convention center.
A summary of the journey illustrates how devious the City Council of Virginia Beach has been over the years.
In the late 1990s, City Council established the Pavilion Steering Committee and charged the committee with the responsibility to recommend to city Council what to do about the old Pavilion. After many months of analysis and consultations, the committee reported their unanimous recommendation to council: expand the Pavilion. (Note that the committee’s first recommendation was an expansion of the Pavilion not a new convention center.)
Some weeks after the Pavilion Steering Committee recommendation, council discussed their options and Mayor Sessoms, Vice Mayor at that time, said he thought that we should build a new one and should hire a consultant and see what they say.
A consultant was hired and eventually presented a report to council in May 2000. In their report, the consultant specifically identified three “scenarios” (ref. executive summary): no-build, expand the Pavilion, and expand the Pavilion with an upgrade of the Doubletree Hotel.
The consultant’s report raised several important issues. The convention center should have a headquarters hotel adjacent to the center and convention class hotels should be nearby. Only the Doubletree hotel, according to the consultant, was an acceptable nearby convention class hotel. Also, the consultant stated, in the “Sources of funding” section in the report that the convention center should be “Paid completely (or mostly) by nonresidents,“ and that “those who benefit financially from the development would pay, in proportion to their benefit, to finance the center.” (In fact, citizens tax revenue in addition to the amount collected at the oceanfront help pay for the convention center.)
Subsequent to discussions of the report, a spokesperson for Armada Hoffler stated that they would not build a hotel by themselves because it would not be economically justifiable. The hotel would be dependent on seasonal convention attendees and is too far away from the oceanfront to get summer tourist business.
Further discussion of a hotel was temporarily set aside and council claimed that the hotel at 31st could function as a headquarters hotel for the convention center. Council was well aware that a headquarters hotel should be adjacent to the center, not many blocks away.
In summary, our Virginia Beach City Council has, since the late 1990’s, ignored their own specially appointed Pavilion Steering Committee for an expansion of the Pavilion, ignored the consultant report for a headquarters hotel, misrepresented the use of the hotel at 31 St., and worked with our state government to pass a law allowing council to use taxpayer money to help pay for a hotel because the builder cannot raise the funds.
And, our Virginia Beach council will increase our debt per capita to borrow the money to pay for all of the above.
Now in 2011, council continues the subterfuge and citizens will pay even more. Our council used eminent domain to take land for a parking area and has transferred the land to the Economic Development Authority to be used for the hotel. Under this new plan, the taxpayers of Virginia Beach would pay to subsidize developer Armada Hoffler ( The same developer that could not raise the funds.) Taxpayers would pay $61.8 million plus interest on the borrowed $61.8 million – for a total about $100 million.
To make matters worse, the Navy will soon begin its long- planned drawdown, which will take place over a number of years, and will have a significant economic impact on Virginia Beach. Currently, the military in Hampton Roads, and in Virginia Beach, has an economic impact that cannot be easily replaced.
An article showed that the military is responsible for 45% of economic activity in Virginia Beach. What would be the impact if that 45% were reduced to 35% especially on the real estate taxes and fees demanded from taxpayers to pick up the lost tax revenue?
If, during the next few years, City Council proceeds with expenditures on the headquarters hotel, a new venture at the Dome site and light rail, council will lock us into ever more debt. That debt must be paid and will be paid with less tax revenue from our military and will fall more heavily on the citizens of Virginia Beach.
The citizens of Virginia Beach will be “left holding the bag” if our city council insists on increasing expenditures, fails to prepare for the impending navy drawdown, borrows more money to build a headquarters hotel for the convention center and for an entertainment venue at the Dome Site, and spends more to prepare for light rail.
Will the devious journey continue on Dec. 13, 2011?
Only city council members who think that pleasing their political contributors is more important than the economic future of the citizens of Virginia Beach will vote “yes” for the headquarters hotel on Dec. 13, 2011. Others, more reasonable and oriented toward (if not dedicated to) ALL citizens will delay the vote until better times.