THE VIRGINIAN-PILOT 
              Copyright (c) 1994, Landmark Communications, Inc.

DATE: Sunday, July 17, 1994                  TAG: 9407160109
SECTION: VIRGINIA BEACH BEACON    PAGE: 05   EDITION: FINAL 
SOURCE: BY BILL REED, STAFF WRITER 
                                             LENGTH: Medium:   68 lines

TAX HIKE PROPOSED FOR RESORT SEAWALL THE RESORT COMMISSION HAS ASKED THE COUNCIL TO SKIP USING THE TOURISM TAX TO FUND THE PROJECT.

A $92 million hurricane protection project that includes a new 40-block seawall should be funded by city taxpayers in general, instead of a special tourism re-investment nest egg, recommends a resort panel.

If necessary the city could hike property taxes by two cents to cover the cost of building the elaborate storm shield.

That recommendation was endorsed Thursday by the Resort Area Advisory Commission, a panel that oversees resort improvements and activities for the city.

The advisory commission three years ago came up with the idea of establishing a Tourism Growth Investment Fund (TGIF), which would underwrite $93 million worth of resort improvements over the next 10 years. The various projects would be fed by a special tax on resort hotel and restaurant revenues, franchise and amusement fees.

TGIF revenue would be used specifically for things like the construction of a new 20,000-seat amphitheater, a half-dozen new golf courses and major additions to the Virginia Marine Science Museum and the Pavilion Convention Center.

The City Council decided last year to dip into the TGIF pot to pay for the hurricane protection plan, which at the time was to cost an estimated $80 million. The city's share of that was to be $29 million.

Since then the cost has risen to $93 million, because the city wants a more effective oceanfront drainage system than originally designed by the U.S. Army Corps of Engineers.

The corps' first draft of the plan called for a gravity-based drainage system to draw off storm water from oceanfront areas along and north of the resort strip. But the city insisted on a pumping system, arguing that a gravity design wouldn't work in heavy rain.

The corps changed its recommendation and incorporated the pumping system into its plans and the price immediately rose by $12 million. The city's share of the entire project also rose to $32.2 million.

Members of the Resort Area Advisory Commission protested a move by the City Council last year to claim a chunk of TGIF money for the hurricane protection project.

The advisory commission formed a subcommittee, headed by attorney Eric W. Schwartz, to study funding alternatives.

After nearly six months of head-scratching the subcommittee returned with a recommendation to toss the storm protection funding problem back in the city's lap. The project should be financed through the city's General Fund, the subcommittee members argue, since it ``clearly benefits the city at large.''

Hurricane protection along the oceanfront comes under the same heading as street and highway improvements, they added, and is not designed to generate additional tax revenues like other TGIF projects.

To raise the needed money, the council could hike property taxes by two cents and even supplement it from increases in bingo fees, auto decals and similar levies, Schwartz suggested.

Commission chairman Roger F. Newill foresees a dim future for the subcommittee's recommendations.

``There's an excellent chance this will not change the course of events,'' he said Thursday. ``But it's an obligation we must honor.''

KEYWORDS: VIRGINIA BEACH CITY COUNCIL

HURRICANE PROTECTION PROJECT

by CNB