
DATE: Wednesday, April 2, 1997              TAG: 9704020485

SECTION: FRONT                   PAGE: A1   EDITION: FINAL  

SOURCE: BY JON GLASS, STAFF WRITER 

DATELINE: NORFOLK                           LENGTH:  103 lines

CORRECTION/CLARIFICATION: * The ballroom in a proposed Hilton Suites Hotel in downtown Norfolk would be 6,000 square feet. A story in Wednesday's Virginian-Pilot erroneously reported that it would be 60,000 square feet. Correction published Thursday, April 3, 1997. * DOWNTOWN NORFOLK HOTEL IN THE WORKS 13-STORY HILTON SHOWS FAITH IN THE CITY'S REBIRTH

A $25-million Hilton Suites Hotel is in the works for a parking lot located less than a block from the coming MacArthur Center mall, the latest sign of confidence among private investors in the prospects for downtown's rebirth.

While a deal on the Hilton is not yet final, both city officials and a Florida-based developer, Welbro Development Inc., voiced no doubt Tuesday that it will happen.

The president of Orlando-based Welbro, Edward L. Schrank, announced Tuesday that his firm has signed a ``letter of intent'' with the Norfolk Redevelopment and Housing Authority to develop a 13-story, 200-plus suite Hilton on a vacant lot the city had targeted for commercial development.

The site is on a section of Granby Street between City Hall Avenue and Plume Street, a short walk from the mall and the nearby Marriott hotel and conference center.

The letter of intent calls on Welbro to complete a franchise agreement with Hilton and seal the deal with the redevelopment agency within the next 90 days.

As planned, the full-service Hilton would feature a 60,000-square-foot ballroom, meeting space and a restaurant. It would cater to business travelers and tourist groups, officials said.

Under the nonbinding agreement, the redevelopment agency, owner of the property, would donate the site to Welbro as an economic inducement.

But the city would not provide financial assistance toward the hotel's construction, regarded as a significant step toward the city's goal of convincing private investors to carry the ball in revitalizing downtown.

``We feel like we no longer need to prime the pump,'' Mayor Paul D. Fraim said. ``It's truly starting to work.''

Donating the lot just makes good business sense, city officials said - currently, it generates about $24,000 in parking revenue but no tax revenue for the city's coffers.

The Hilton, by contrast, would contribute about $900,000 in real estate, lodging and meals taxes, officials said. Also, under the proposed agreement, the hotel would lease parking space in an existing city garage on City Hall Avenue.

Officials said the $300 million MacArthur mall - with $200 million in private investment rounded up by upscale developer Taubman Co. - has sparked the ``critical mass'' to convince the business community that downtown renewal is more than a pipe dream.

``Nobody, no developer or their bankers, would put up $200 million lightly, and that is sending a strong message of the inevitable, that it's here, it's happening,'' said Rod S. Woolard, director of the city's Development Department and Norfolk's point man in the Hilton negotiations.

``People are looking at that level of investment being made and are recognizing we're a rising market,'' Woolard added. ``We've got people that we don't have to beg to come here. They're coming to us with proposals to invest their money.''

That's a far cry from the gift-bearing approach the city had to resort to in late 1989 to attract the $37-million, 400-plus room Marriott. The city then agreed to spend $15 million for a conference center, $8 million for 700-space parking garage and $500,000 to prepare the hotel site. The city also put up a $2 million reserve - matched by $500,000 from private backers - to cover any operating shortfalls during the hotel's first seven years.

The days when such generous incentives are needed to attract private investors are long gone, city officials said.

Just weeks after construction on the mall began, for example, a Connecticut developer, Arthur Collins Sr., announced plans for a $22-million residential development between Duke and Boush streets downtown.

And besides the mall, the opening of Tidewater Community College's downtown campus has sparked business interest along the Granby Street corridor.

In his statement Tuesday, Schrank said: ``The current redevelopment efforts in downtown Norfolk have created a great opportunity for our Hilton Suites Hotel. We believe that providing an all-suites hotel with ballrooms and meeting rooms will complement the existing downtown business and hospitality infrastructure.''

Schrank added: ``We expect to see exciting synergy with the MacArthur Center, the Collins Enterprises housing development, and the dynamic convention business already under way.''

Doyle E. Hull, chairman of the redevelopment agency's board of commissioners, said the hotel's location on Granby Street is key to downtown's revitalization.

``We've been trying to revitalize Granby Street for years and years,'' Hull said, ``and a hotel development, especially a high quality hotel, is one of the classic signals that you've come back.'' ILLUSTRATION: Color photo by IAN MARTIN/The Virginian-Pilot

This view across the site for the new hotel at Granby and Plume

streets shows the new Federal Building, at left, at Granby and City

Hall Avenue.

Map

Area shown: site of hotel construction KEYWORDS: HOTEL NORFOLK

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