The Virginian-Pilot
                             THE VIRGINIAN-PILOT 
              Copyright (c) 1996, Landmark Communications, Inc.

DATE: Wednesday, June 26, 1996              TAG: 9606260369
SECTION: FRONT                   PAGE: A1   EDITION: FINAL 
SOURCE: BY HARRY MINIUM AND KAREN WEINTRAUB, STAFF WRITERS 
                                            LENGTH:  108 lines

BEACH MAY REFUSE TO CHIP IN ON ARENA, RAIL

Water disputes between Norfolk and Virginia Beach are jeopardizing regional proposals such as a sports arena and a light rail system.

Two prominent Virginia Beach officials, who asked not to be identified, said they believe the City Council will not support funding the proposed 20,000-seat arena.

A major reason, they said, is Norfolk's release last week of a water supply study showing it has far more water than previously reported.

``Am I going to advocate putting Virginia Beach money into an arena in downtown Norfolk?'' said one official. ``Hell, no. Not after this.''

Beach officials say other joint ventures between the cities, including a proposed light rail system linking the Pavilion and downtown Norfolk, also might be threatened. Supporters are considering deferring a July 9 vote to avoid having it be killed outright.

No firm decisions have been made, several council members said, and many hope strong emotions will fade.

But council members contacted Tuesday said they are much less willing to cooperate with projects supported by Norfolk.

``I really do think it affects all of our regional decisions,'' said Beach City Council member John A. Baum, who is also a member of the city's water task force.

``Obviously, everything stands the opportunity of being re-examined in the light of what's been done to us by the water study,'' Virginia Beach Mayor Meyera E. Oberndorf said.

Norfolk Mayor Paul D. Fraim acknowledged that emotions are running high at the Beach and that it will be difficult for some officials not to be influenced by the recent water dispute.

``I would hope that we would all be willing to judge issues on their own merits,'' Fraim said Monday. ``This region needs a functioning mass-transit system just like it needs a reliable drinking system for the long-term. Both communities ought to be able to support Lake Gaston and light rail and hopefully professional sports.''

He said Virginia Beach ``has not been asked'' to help fund the arena, and expressed optimism that the resort city eventually will voice support for an arena.

``We knew from the beginning it was going to be difficult,'' he said. ``If we keep pushing ahead, I think we'll get there. There is great interest in the arena and professional sports in Hampton Roads.''

Norfolk, Virginia Beach's sole source of water, recently released a report by an outside consultant indicating the city could produce 18 million more gallons per day by making changes in its system.

Virginia Beach officials are attempting to secure their own water by building a pipeline to Lake Gaston, and they fear opponents will use the report to derail those plans.

Beach officials question the report's conclusions and had pressured Norfolk officials not to release the report. Fraim said withholding the report would have violated state law.

Last Friday, North Carolina sent a copy of the report to a federal appeals court already considering the pipeline issue, saying it proves that Virginia Beach doesn't need water from Lake Gaston.

``If North Carolina gets an injunction (against the pipeline), then it will be nuclear war,'' said a Beach official who declined to be identified.

The two cities have also been considering cooperating on an 18-mile light rail line that would carry commuters between the Pavilion and downtown Norfolk. Earlier this month, Norfolk's City Council voted to proceed with further study of the $376 million rail proposal. The Beach council deferred consideration of the measure until July 9.

Beach council member Louisa M. Strayhorn, a strong supporter of a light rail system, said she plans to lobby heavily for the rail proposal until then.

``If I should find by the time July 9 gets here that there are emotions running high, then I would definitely ask for a deferral so we could have a clear mind when we make a decision as momentous as light rail,'' she said.

For nearly six months, Virginia Beach and Norfolk officials have been discussing the proposed arena and how to hire a consultant who would determine whether the region would support a major sports franchise. The cities issued a joint declaration Jan. 16, pledging to cooperate to hire an arena consultant.

But Virginia Beach's support has been lukewarm at best. The Beach's delegation to the General Assembly tried to defeat, then successfully watered down, efforts by Norfolk Del. Jerrauld Jones to create a new sports authority. Virginia Beach and Norfolk officials have been bickering over how to select a consultant. It was widely believed that a funding mechanism involving most of the region's cities would be needed to build an arena. Without Virginia Beach, the state's largest and the area's richest city, that would not be possible.

Fraim said it is now more likely that an arena would be paid for largely with lottery money than by a regional tax. He is serving on an authority attempting to fund a baseball stadium in Northern Virginia with a special lottery game.

``There will be a funding formula developed'' for the Northern Virginia stadium, Fraim said. ``At the end of the day, I hope it is a model Hampton Roads can use.''

Norfolk officials recently acknowledged they had lobbied National Basketball Association officials for an expansion franchise. NBA commissioner David J. Stern told Robert M. Smithwick, then Norfolk's economic development director, that Hampton Roads had a good chance of landing a franchise if it builds an arena and finds an ownership group.

Fraim won't comment about ownership groups, but sources say Norfolk has had discussions with two potential NBA owners and a potential National Hockey League owner.

Fraim and Hampton Mayor James L. Eason recently were asked by the Hampton Roads Partnership, a group of 53 regional government and business leaders, to prepare a report on the proposed arena and attempts to secure a franchise and present it to the Partnership July 24.

Fraim said a consultant will not be hired until after that report is made. Who will pay for the consultant has yet to be determined.

``Basically, what they've asked for is a summation of what has happened, to advise them of any additional interest (from leagues or ownership groups) and to bring everyone's learning curve up,'' he said. ``Then we'll decide which way we're going to move.''

KEYWORDS: WATER SUPPLY PLAN VIRGINIA BEACH CITY COUNCIL

NORFOLK CITY COUNCIL REGIONALISM by CNB