DATE: Wednesday, July 9, 1997               TAG: 9707090409

SECTION: LOCAL                   PAGE: B2   EDITION: FINAL 

SOURCE: BY BILL REED, STAFF WRITER 

DATELINE: VIRGINIA BEACH                    LENGTH:   64 lines

BEACH OFFICIALS HAVE RESERVATIONS ABOUT HOTEL STUDY THE $20 MILLION HOTEL WOULD HELP SHOWCASE THE BACK BAY WILDLIFE REFUGE.

The city's funding share of a market study for a five-star hotel at Sandbridge may be cut nearly in half and, even then, the City Council may attach strings to the project.

The $20 million upscale hotel is envisioned as the man-made centerpiece of an as yet undeveloped ecological tourism industry that would showcase the Back Bay National Wildlife Refuge. It is planned for a site at the southern end of the barrier island that separates the Atlantic Ocean from Back Bay.

A market study is among the steps needed to determine if the project should proceed. A decision will not be made until early August.

The study was originally pegged at $75,000 and was later lowered to $42,500 after funding for market research to help attract hotel development proposals was scrapped by the city's Department of Economic Development.

But Councilman Harold Heischober wants landowner Doug Wilkins, who has a majority interest in nearly 14 acres on which the hotel would be built, to pay for the study.

Donald Maxwell, director of the city's Economic Development Department, favors proceeding with market research. The study would help determine if wealthy visitors would consider a visit to explore the marine riches of Back Bay. It also would identify hotel developers with interest in the project.

Maxwell said the study would be undertaken by the Cayuga Hospitality Advisors, an international marketing and development group whose members develop and run hotels throughout the world. Its members are either graduates of, or faculty members at, the Cornell University Hotel School.

Cayuga Hospitality would get $40,000 plus $2,500 in expenses to do its work, Maxwell said.

Money for the study would come from the city's Tourism Growth Investment Fund, a revenue pool fed by special taxes on hotel room rentals, restaurant sales and resort franchise and amusement fees. The fund was approved by the council in 1991 as a tool to spur tourism-related projects.

Councilwoman Barbara Henley, who vowed several weeks ago that she would oppose the use of city money for a Sandbridge hotel study, said she doubted the wisdom of using the TGIF to pay for market research.

Noticeably irritated over a newspaper editorial and a letter to the editor that took issue with her stance, Henley said, ``Just because it is specifically dedicated by TGIF, I don't think that relieves us of our responsibility of making sure that it's spent as precisely and as carefully as we should. Tax money is tax money.''

Heischober agreed. He suggested the money be repaid to the TGIF pool if Cayuga Associates is successful in attracting a major hotel developer. He questioned the propriety of hiring Cayuga Associates without going through the city's normal bidding procedures.

Wilkins, who attended the briefing, was unhappy with Heischober's proposal. ``Why would they want to do that?'' he said. ``I've got people lined up to buy that property, and I could sell it right now without asking the council.''

Councilwoman Reba McClanan quickly defended the study and the funding. ``I'm puzzled over the degree of concern over $42,000 when we've given a lot more - millions - to other things,'' she said.

``We have an opportunity to work with somebody to accomplish a top-quality facility that draws a kind of tourist who has a significant amount of money to spend. If we want to draw them, we have to do something to attract them.'' ILLUSTRATION: VP MAP

SANDBRIDGE, VA. BEACH KEYWORDS: ECOTOURISM

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