April 10--VIRGINIA BEACH -- The city is offering incentives to potential buyers of the Cavalier on the Hill in hopes of preserving the historic Oceanfront hotel.

Staff and Mac Rawls, who heads a task force that aims to preserve the Cavalier, presented the incentives to the City Council on Tuesday. The council later approved an ordinance with the recommendations. Staff will now attempt to meet with potential buyers before April 25, the bidding process' start date.

The package includes indications that the city would consider changing the zoning of the parcel containing the 86-year-old hotel to allow a developer flexibility when it comes to the site and land use. Further, the city could support historic tax credits and contribute to the cost of extending the boardwalk to the Oceanfront portion of the hotel.

Rawls said the task force came up with this approach after discovering that the city had no legal ability to save the hotel and realizing it wasn't feasible for the city to purchase it.

"We're pretty much at the mercy of the person who will ultimately own the property as to what they will do with it," he said.

The Cavalier has been caught in the middle of a family feud. In 2011, Curtis Colgate, whose family has owned the hotel for more than 50 years, sued The Disthene Group Inc., which owns The Cavalier and the world's largest kyanite mine, in Buckingham County. The suit alleges that Colgate's uncle and cousin, who control Disthene, tried to deny Colgate and his sister the full value of their shares in the company and have mismanaged its assets.

A Fairfax County Circuit Court judge last year ordered Disthene to be dissolved and appointed a receiver to take over the hotel, mine and other properties and sell them. Colgate has indicated he would be interested in purchasing and preserving the Cavalier.

The Cavalier encompasses 21.2 acres at 4201 Atlantic Ave. and includes a second Oceanfront hotel, which dates to the 1970s.

CBRE Group Inc., the real estate company overseeing the sale, will also have the city's incentives posted on its website, Rawls said. CBRE and the receiver will review the bids during May and present the best offer to the court for approval.

Gabriella Souza, 757-222-5117, [email protected]

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