THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Saturday, October 19, 1996 TAG: 9610190013
SECTION: FRONT PAGE: A14 EDITION: FINAL
TYPE: Editorial
LENGTH: 73 lines
A six-story office building on prime Portsmouth waterfront land may be offered for sale soon. The 100,000-square-foot brick building, across the Elizabeth River from Waterside, remains in fine shape at age 16 and affords breathtaking views of ships and downtown Norfolk. Space for 500 workers. Must see to believe.
For companies that would swoop up such a deal, there's one as yet unresolved obstacle: The building is occupied. It's City Hall.
In a smart and entrepreneurial move, Portsmouth is considering selling old City Hall and building a new one on cheaper land.
Portsmouth is laying plans for a new City Hall now, so it could move fast if the right buyer came along and a good deal could be made for the city.
Not having plans would greatly delay construction of a new City Hall. Moving to temporary quarters is a bad idea, since each move - into and out of temporary quarters - is estimated to cost more than $1 million.
Portsmouth City Manager Ronald W. Massie is studying costs and plans to report to City Council on the City Hall project within several weeks. At this point, nothing is written in stone, which is good, since many questions need answering, the prime one being: Will the city make or lose money on the deal?
Deputy City Manager C.W. McCoy said there's a good possibility the waterfront property would sell for enough - roughly $5 million to $10 million - to build a new City Hall.
Clearly, the right corporate buyer of the waterfront building would upgrade Portsmouth's image, provide hundreds of good jobs and $10 million to $20 million in new buying power, pay taxes, perhaps draw business clients for area hotels, and more.
With a new City Hall plan in hand, Portsmouth probably could vacate present City Hall within 15 months.
The best city option, then, would be to find a buyer willing to wait 15 months to occupy the property.
A second option, which the city government is also looking at, would be to build a new City Hall now, on the theory that an empty building would be more attractive to buyers. Because the second option entails risk, the first option seems far better.
One proposal being studied is to build a new City Hall at the old I.C. Norcom High School site at Turnpike Road and Frederick Boulevard, near Mid-City Shopping Center.
That City Hall would be more centrally located than the present one, the city already owns the property, and the influx of hundreds of city employees and residents doing business at City Hall might spur retail activity in an area that needs it.
Clearly, Portsmouth cannot afford to do something dumb at this point - such as incur debt to build a new City Hall, then fail to find a buyer for the building on the Elizabeth River.
As staff writer Battinto Batts Jr. reported, more than half of Portsmouth's property is tax-exempt because it is owned by churches or federal, state or local governments. Selling bonds to finance a new City Hall could present problems, since Portsmouth has already seen its bond rating dip in recent years.
The more likely financing plan would be a lease/purchase arrangement, but that would be expensive also, without income from the waterfront building.
The lone timely bid to build a new Portsmouth City Hall came from Armada/Hoffler Construction Co., which also had the lone bid to build a $9 million conference center in Chesapeake. Its bids in both cities followed less-than-exhaustive searches for bidders. For the Portsmouth project, some builders might not have wanted to bid on a project that might not go forward. One builder's bid arrived 10 minutes after the deadline.
If the city and Armada/Hoffler cannot agree on the price and scope of the work, the bidding process can and obviously should be reopened.
But the first order of business is to determine if the city stands to make or lose money by selling its present City Hall. If the city would lose money on the deal, the question to answer is: Would the benefit to the city from attracting a new company be worth the loss?
City Hall never should have been built on some of Portsmouth's most valuable land. Now might be the time to make plans to correct an old error. by CNB