THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Thursday, March 21, 1996 TAG: 9603190079
SECTION: NORFOLK COMPASS PAGE: 05 EDITION: FINAL
SOURCE: BY ALEX MARSHALL, STAFF WRITER
LENGTH: Medium: 67 lines
The city will not be able to pay for the clearance and redevelopment of the upper bay streets of East Ocean View - $20 million over the next five years - unless the City Council allows the city to exceed its traditional limit of fiscal prudence on debt, the city staff has told the council.
The message was part of the city's first draft of the 1997 capital improvement budget. The list of staff-recommended projects totaled $27 million but did not include redeveloping East Ocean View.
To fund the project, the council has to decide that the city can handle the debt and that the project is worth more than the new schools, bridges, recreation centers and other unfunded projects that compete with it for taxpayer dollars.
At a cost of $4 million annually, the city would be spending more than 10 percent of next year's capital budget on the redevelopment project. It would bump the total CIP in 1997 to $31 million. The city's expenditure on debt service would rise over the next few years to perhaps 12 to 13 percent of the annual operating budget, assistant city manager Darlene Burcham said.
For years, the city has maintained a rule of not spending more than 10 percent of its operating budget on debt service. But because of downtown and school projects built in the last few years, the city is now at that limit.
The city originally hoped to fund the East Ocean View Project without substantial contributions from taxpayers. But the project ran into financing trouble after private banks would not fund the project without better collateral.
Last year, the Norfolk Redevelopment and Housing Authority, which is leading the project, worked to come up with a new funding plan. Under the latest funding plan, city finance staff estimate it will take almost 30 years for the project to pay for itself through expected new tax revenues from the planned new neighborhood.
For now, the East Ocean View project is part of ``List B'' and ``List C'' on the capital improvement budget - a list of dozens of projects that are desired but not funded, totaling some $80 million. The projects include everything from a new $200,000 boiler for Kirn Library, a new $2 million police station, a $2.6 million renovation of the Attucks Theater to $15 million in new downtown infrastructure.
The total cost of the East Ocean View project could run as high as $80 million. But the NRHA hopes to fund the later years through some other form of financing other than direct backing by taxpayers.
The redevelopment project is on the peninsula of land east of Shore Drive. The project involves tearing down the homes of roughly a thousand families, who will have to move elsewhere. A new neighborhood of some 500 homes has been designed by nationally known architect Andres Duany.
The council made little comment on the news. The staff had delivered a similar message to the council some months back but without firm numbers. Councilmen Paul R. Riddick and Herbert M. Collins previously have said they might be reluctant to support the project if taxpayer funds are the principal means of support. But if the other councilmen stick with the project, it would still have a majority of votes.
So far, the funding of the project has not become an issue in the council campaign.
Other highlights of next year's CIP budget include $1 million for renovating the zoo, $500,000 for neighborhood commercial improvements and $660,000 for Ghent commercial area improvements. by CNB