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Proposed Public-Private Partnership for New $109 million Hyatt Convention Hotel
in Virginia Beach, Virginia Bringing Out Deep Divisions on Both Sides of the Fence

By Aaron Applegate, The Virginian-Pilot, Norfolk, Va.McClatchy-Tribune Regional News

Dec. 14, 2011--VIRGINIA BEACH -- The stark divide among residents over a proposal to build a $109 million, four-star Hyatt hotel and more meeting space next to the Virginia Beach Convention Center was on full display Tuesday night at a packed public hearing on the project -- and it won't be the last time.

City officials scheduled a second hearing for Jan. 10 and set a City Council vote on the public-private partnership with developer Armada Hoffler for Jan. 24.

Five City Council members on the 11-person body have come out against the project. No council members offered comment during the hearing.

Opponents outnumbered supporters -- in total, about 40 people spoke -- arguing the city shouldn't be in the hotel business and could use the nearly $67 million in initial public money to reduce the city and school division's $90 million budget shortfall.

"It's irresponsible, almost un-American," resident David West said.

"If this project is so important, let Armada Hoffler build it themselves," resident Lawrence DeAngelo said.

Supporters said the city needs to invest in the hotel and tourism in general because cuts in defense spending probably will hurt the Beach in the future. They cited city studies that show the hotel will produce $53 million more than it costs over 20 years.

"The numbers are irrefutable," said Nancy Creech, president and CEO of the Virginia Beach Neptune Festival. "We must have a convention center hotel."

Hotelier Jimmy Capps said the hotel is an opportunity to "put Virginia Beach on the map as a conference destination."

Under the deal, the city initially would contribute almost $67 million to help developer Armada Hoffler build a 15-floor, 361-room Hyatt Regency hotel; additional city-owned conference space; and a pedestrian bridge to connect them to the convention center.

The city contribution would include $19.1 million in loans and $4.8 million in economic development grants. The city also would pay a $450,000 annual management fee. Armada Hoffler would contribute $47.4 million up front and repay the loans.

City officials have said the hotel and conference space would create jobs, bring in events, generate property taxes, and boost spending in the city by $88.7 million a year.

Some opponents of the Hyatt hotel said they favored an alternative plan to renovate the existing DoubleTree hotel near the convention center into the facility's headquarters hotel.

Harmony Hospitality Inc., which owns the DoubleTree, is working on a proposal it plans to unveil early next year, company President Page Johnson said before the meeting Tuesday.

Harmony has proposed spending $25.5 million to expand and upgrade the DoubleTree. The company is seeking $5 million to $10 million from the city to build an enclosed walkway between the hotel and convention center.

Aaron Applegate, (757) 222-5122, aaron.applegate@pilotonline.com

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(c)2011 The Virginian-Pilot (Norfolk, Va.)

Visit The Virginian-Pilot (Norfolk, Va.) at pilotonline.com

Distributed by MCT Information Services



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