April 09--Opponents of a multimillion-dollar hotel-conference center in Norfolk made their voices heard Monday night, and a second council member joined a growing chorus with a clear refrain: Slow down.

Officials are scheduled to vote Tuesday on the $126 million project, which would give Norfolk a 50,000-square-foot conference center and 23-story, 300-room luxury hotel. Norfolk officials hope the new facility, which could be finished by spring 2017, attracts new conference business and diversifies the city's economy.

But it will take more to convince some Norfolk hoteliers and concerned residents. The Norfolk Hotel Motel Association and representatives of the Norfolk Waterside Marriott and Sheraton Norfolk Waterside Hotel have asked the city to delay the vote. And, on Monday night, about 100 people, many voicing opposition, showed up at a town hall meeting organized by Councilman Tommy Smigiel at the Crossroads Recreational Center.

"I don't understand why this city's children take such low priority," resident Kathy O'Hara said. "If you can find $89 million to build a conference center, why are we raising taxes on the schools?"

Councilwoman Theresa Whibley joined Smigiel in saying they plan to request a delay for the vote. The pace is too fast, Whibley said, and waiting another week or two would not hurt the deal.

About $89 million in public money would go toward the project, including $10 million in grants for hotel construction and $16 million already spent. Virginia Beach-based Gold Key/PHR Hotels & Resorts would finance the majority of the hotel.

Proponents say the project would create 500 construction jobs and 250 full-time jobs and would generate about $2 million in annual tax revenue. The new money, they argue, could help Norfolk support other services, such as police and education.

Opponents question the subsidy and point to budget cuts, such as scaling back the real estate tax relief program for the elderly and disabled, and possibly raising property taxes. Hoteliers say they worry about the impact on the hotel market.

"Nothing is guaranteed, but it takes calculated risk," Councilman Barclay C. Winn said.

The Norfolk-Portsmouth market has seen a decrease in occupancy and revenue since 2007 and only modest recovery since then. This year, it is expected to be flat.

The Marriott and Sheraton say a decrease in travel for the military and its contractors could hurt a region where defense spending makes up about 46 percent of the economy.

Those fears are not unfounded, according to Vinod Agarwal, an economist with Old Dominion University.

"I'm not sure the timing is correct," he said. "Having said so, the hotel is not going to come up over night."

Nearly a third of Hampton Roads hotel visits are related to government spending, said Sallie Grant-DiVenuti, executive director of the Hampton Convention and Visitor Bureau. Defense cuts from sequestration will damage the market if they are as severe as predicted.

"When you cut back that much, we're all going to be scrambling to step back and say, 'Where's the next big, shiny object to chase?' " Grant-DiVenuti said.

"Having additional competition is always something -- especially in a down economy -- that's very challenging."

Some experts predict convention and hotel business will return to pre-recession levels by 2017. Hotel development is starting to take place across the country, said Jeff Eastman, president and CEO of Trends Analysis Projections LLC, a firm that researches the industry. Investors have again started calling Eastman for information about particular markets, something that didn't happen between 2007 and 2011.

Eastman has studied Virginia Beach. He declined to comment on Norfolk's proposal, saying he hasn't studied the convention market for the city, or the region. Virginia Beach's convention business is "soft," like it is across the country, he said.

"Everybody is booking meetings and conventions much more short term," he said. "People are really cautious right now."

While the proposed hotel-conference center is finding opposition close to home, the project is enjoying a friendlier reception with an unexpected audience: the competition outside Norfolk.

Hampton Roads has seen a proliferation of such venues over the past decade. Even so, city officials say they aren't overly concerned that a new center would hurt their ability to succeed.

Jim Ricketts, director of the Virginia Beach Convention and Visitors Bureau, said the city's tourism industry weathered the recession and its aftermath and can withstand competition from Norfolk.

"There will be times when we come up head-to-head for a smaller convention or conference," Ricketts said. "But the Beach is a resort destination with the ocean, which is a great amenity. Norfolk is a great downtown area, so they're different competitive atmospheres."

Likewise, Portsmouth Councilman Bill Moody said the Renaissance Portsmouth Hotel and Waterfront Conference Center will stand up just fine next to Norfolk's new luxury hotel and conference center when the time comes.

"I say more power to them," Moody said.

"Let the marketplace decide how the business is going to be."

Jillian Nolin, 757-446-2326, [email protected]

Sarah Kleiner Varble, 757-446-2318, [email protected]

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