DATE: Saturday, April 5, 1997               TAG: 9704050002

SECTION: LOCAL                   PAGE: B6   EDITION: FINAL 

TYPE: Editorial 

                                            LENGTH:   61 lines

HEALTHY DEVELOPMENTS THE PROSPECTIVE HILTON SUITES HOTEL IS THE SECOND RECENT SIGNAL OF PRIVATE-INVESTOR CONFIDENCE IN DOWNTOWN.

Critics of extensive investment of public funds to redevelop downtown Norfolk usually complain that City Hall's focus slights other neighborhoods and essential public services.

However true that charge, the reality is that Norfolk - like Portsmouth and many other beleaguered central cities - has been compelled to tap public funds to strengthen its tax base as more and more upper- and middle-income taxpayers and commercial enterprises settled in green pastures beyond the city limits.

The rejection of central cities by many of the well-off and many merchants left lower-income and destitute families behind. So central cities' school, social-welfare and corrections burdens increased while tax revenue stayed flat or dwindled. Central cities' plight in Virginia is exacerbated by Virginia's policies that prevent the old cities from, say, taxing the incomes of all the commuters who make their living in them.

The good news for Norfolk is that redevelopment downtown and on the West Side and, increasingly, the East Side has kept the city from becoming an urban basket case unable to maintain public services at acceptable levels.

Ghent Square, Freemason Harbor, Middletowne Arch, Lafayette Shores - all are boons to Norfolk. After half a century of striving to assure its future as a healthy component of Hampton Roads, the city appears to have weathered the worst. The prospective $25 million, 200-suite Hilton Suites Hotel, to be constructed on barely productive land donated by Norfolk Redevelopment and Housing Authority, confirms downtown's much-improved social and economic health.

The signing of a letter of intent by Florida-based developer Welbro to add a Hilton Suites Hotel to the city's inns came shortly after the announcement of a $22 million downtown-residential development by Connecticut-based developer Arthur Collins. Both deals were triggered by the construction start on the $300 million MacArthur Center superregional shopping mall on former slum land. MacArthur Center is a private-public partnership involving about $100 million investment by the city, the rest by private enterprise. A big chunk of the public investment is in parking garages, which Norfolk has in spades - and which pay themselves off.

Norfolk is not yet out of the woods financially. Its municipal budget, approaching half a billion dollars, is so tight at the moment that City Hall has had to curb hiring and spending for the fiscal year ending June 30 because of a shortfall in projected revenue. A similar cash pinch confronts the city in the next fiscal year.

Hilton Suites will generate hundreds of thousands of dollars annually for the municipal treasury, but its completion is a couple of years out. MacArthur Center will be a prime generator of tax revenue, but it is not scheduled to open until the spring of 1999, when Hilton Suites is to open. The Collins upscale housing, as well as redevelopment of East Ocean View and new upper-income housing adjacent to Norfolk State University, will bring in still more revenue. And downtown is highly likely to acquire more hotels.

The neighborhoods will feel the salutary effects of the growing tax base and hundreds of new jobs that will be filled in part by city residents. Additional tax revenue will underwrite improved public services that will make the city a better place in which to live, work, play, learn and be healed. Which, of course, has been the aim all along.

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