THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Thursday, December 7, 1995 TAG: 9512070376
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY MYLENE MANGALINDAN, STAFF WRITER
LENGTH: Medium: 91 lines
Downtown Norfolk is on a roll.
In the lobby of its new digs, the U.S. Coast Guard announced Wednesday that it will move its Maintenance & Logistics Command Atlantic headquarters staff of 478 people, along with its hefty $24.7 million payroll, into the Main Street Tower.
``We're very pleased to have the Coast Guard in the city of Norfolk to complement our operations in Portsmouth,'' said Rear Adm. William J. Ecker, commander of the 5th Coast Guard District. Based in Portsmouth, the 5th District spans the mid-Atlantic region from Toms River, N.J., to the South Carolina border.
The announcement quickly follows news that The New York Times Co. will employ about 100 people and use 25,000 square feet down the street in the World Trade Center.
The two projects will help fill empty floors in downtown Norfolk, which has the largest concentration of office space in Hampton Roads as well as the highest vacancy rate, in part due to overbuilding in the 1980s.
The Coast Guard's arrival is a huge coup d'etat for NeVa Properties, the owner of Main Street Tower, which sat empty for about four years after its original developer, Rowe Development Co., ran out of money while finishing the building. NeVa Properties is owned by Las Vegas investor Ron Engelstad, owner of the Imperial Palace hotel and casino.
``Comeback? We've been back,'' said Mayor Paul Fraim, who responded to questions about his city's downtown resurgence. ``It's a great expression of confidence in our downtown as a place to do business.''
The Maintenance & Logistics Command Atlantic supports Coast Guard people and operations in the 40 states east of the Rocky Mountains. It comprises 2,200 military and civilian employees at 23 commands and detachments in 13 cities. Its operating budget exceeds $201 million.
Scheduled to move in around mid-May, the Coast Guard is essentially transferring its entire Governors Island, N.Y., staff to Hampton Roads, Ecker said.
The high-level professional staff will be equally divided between military and civilian employees. They will include engineers, lawyers, logisticians, medical administrators, environmental specialists and contract specialists.
Once the jobs are transferred to Norfolk, the total number of Coast Guard civilian and military personnel will climb to 2,300 in Hampton Roads, said Lt. Nona Smith, a public affairs officer. That count excludes the 483 people in the Coast Guard's Yorktown training center, she said.
The MCLA will occupy 91,800 square feet of space, or 6 1/2 floors, of the 14-story building for 15 years, according to Carmaleta Whiteley, NeVa Properties' leasing agent for Main Street Tower.
City officials, downtown employees and others welcomed the newest addition to Norfolk's business district.
``I think it's terrific for downtown Norfolk,'' said Jordan E. Slone, president of Harbor Group Real Estate, which bought the nearby First Virginia Bank building this fall.
``We couldn't have been happier, having just bought this building Sept. 5,'' he said. ``Our research showed us that the office market in Hampton Roads in general is starting to tighten up, and we believe that it was a tremendous opportunity for us to benefit on the upswing in downtown Norfolk.''
Occupancy in the First Virginia Bank building, for example, rose from 82 percent to 91 percent in four months, Slone said.
According to Deborah Stearns, a senior vice president at Goodman Segar Hogan Hoffler Inc., the Coast Guard's move will reduce the vacancy of premier office space, called class A, from 23 percent to 15.8 percent.
Overall, total vacancy for both class A and B office space will drop to 17.5 percent from 21 percent.
That bodes well not only for commercial real estate rental prices but also for the economic impact of the new jobs downtown, some said.
``All of those new bodies will clearly help the restaurants, the retail, create more vitality and energy downtown,'' Stearns said. ``It represents a major growth spurt for downtown, which has been stagnant. The square footage of occupied area stayed constant but didn't grow in proportion to Greenbrier, Lynnhaven and Greenwich Road. This is really a catalyst for an energy spurt and a growth spurt downtown.'' ILLUSTRATION: [Color Photos]
BILL TIERNAN/Staff
The Virginian-Pilot
ABOVE: The Coast Guard will occupy 6 1/2 floors of the 14-story Main
Street, left, in downtown Norfolk. TOP LEFT: Rear Adm. William J.
Ecker and Norfolk Mayor Paul Fraim talk outside the Main Street
Tower after the announcement that the Coast Guard will move its
Maintenance & Logistics Command Atlantic headquarters staff to the
city.
by CNB