THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Thursday, November 3, 1994 TAG: 9411030406
SECTION: LOCAL PAGE: B1 EDITION: FINAL
SOURCE: BY ALEX MARSHALL, STAFF WRITER
DATELINE: NORFOLK LENGTH: Medium: 72 lines
The city has secured money critical to building the $270 million MacArthur Center mall downtown.
The federal department of Housing and Urban Development has committed to giving Norfolk $32.8 million in low-interest loans, Mayor Paul Fraim said Wednesday.
The money will be used to build the new Nordstrom, a classy department store that is considered a key drawing card for the mall, which is to be on 17 acres of parking lots downtown.
Without the HUD money, Norfolk would have had to use its own capital funds to build the store. That would have meant less money available to build schools and roads and fund other regular long-term needs.
The HUD money, granted under the Section 108 loan program, is supposed to go to projects that create jobs for low-income residents. One condition of the loan is that Nordstrom interview low-income residents for certain jobs at the mall.
The store is not obligated to hire a quota of low-income residents. But in all, 51 percent of people interviewed must be low-income residents, said David Rice, executive director of the Norfolk Redevelopment and Housing Authority.
Councilman Herbert Collins, who represents some of the city's poorer areas, said he backs the loans, but only if they lead to jobs for people who need them most.
``We are watching this project carefully,'' Collins said. ``We are hopeful Norfolk got this money under the proper pretexts. Otherwise, we will sound the alarm.''
Nordstrom, based in Seattle, has built stores with this type of federal money and has a record of workingsuccessfully with low-income job applicants, Fraim said.
The city expects MacArthur Center, which is slated to open in the fall of 1996, to create 3,000 jobs. HUD estimates that Nordstrom will create 342 of those jobs.
The city plans to pay back the $32.8 million in HUD loans with the increase in tax revenue generated by MacArthur Center. The city expects the center to contribute $10 million a year in real estate, sales and other taxes.
In all, the city is committing $97 million in spending and loans. Fraim said the city should break even in about five years.
The $32.8 million from HUD is secured by about $6 million a year the city receives in Community Development Block Grants that are used for low-income housing. If for some reason the city failed to pay back the loan, HUD would have the legal right to divert the block grant money until it is repaid.
Some project hurdles remain: Developer Alexius C. Conroy has not yet secured the financing he needs to build the project.
In addition to Macy's and Nordstrom, which have already committed, a third department store must be attracted to help anchor the mall.
Fraim said he expected both loose ends to be tied up in coming weeks.
The developer is expected to break ground on the project this spring, Rice said. ILLUSTRATION: Staff photo by TAMARA VONINSKI/
Mayor Paul Fraim said the city should break even on the MacArthur
Center in about five years. In all, Norfolk is committing $97
million in spending and loans.
Color staff map
Area shown: MacArthur Center
KEYWORDS: MACARTHUR CENTER by CNB