DATE: Tuesday, May 20, 1997                 TAG: 9705200310

SECTION: LOCAL                   PAGE: B1   EDITION: FINAL 
SOURCE: BY JON GLASS, STAFF WRITER 

DATELINE: NORFOLK                           LENGTH:   79 lines

NEIGHBORHOODS MAY FEEL PINCH

Nearly $28 million in public funds will flow into downtown in the coming year, kicking renewal efforts into high gear, under a budget approved Monday by the city's redevelopment and housing board.

But while money rolls downtown, some of Norfolk's most blighted neighborhoods will get less than expected unless the City Council restores about $2.3 million in proposed funding cuts, members of the Norfolk Redevelopment and Housing Authority board of commissioners said.

The board adopted its fiscal 1998 budget Monday with the neighborhood cuts included, but voted unanimously to send a letter to council members asking that the money be restored.

``We all sympathize with the demands on the city, but if they take this money out of our pocket, we're not going to be able to do the things they want us to do,'' said authority commissioner Arnold B. McKinnon.

City Manager James B. Oliver Jr. has proposed funneling about $4.2 million in neighborhood development funds to the authority during the upcoming fiscal year, 35 percent less than this year's $6.5 million.

Several City Council members have voiced support for restoring the funds, but no vote has been taken. The council is scheduled to adopt the city's budget in its meeting today.

In a May 1 letter to the city manager, David H. Rice, the authority's executive director, wrote that without the additional funds, ``blighting influences will spread, and the cost to correct these problems will grow.''

The 1997-98 fiscal year, which begins July 1, will be marked by intense construction activity downtown, as the MacArthur Center mall aims for a scheduled March 1999 opening.

Slightly more than $14 million of the $27.8 million approved Monday for downtown redevelopment is the first installment of a $33 million bank loan Norfolk is borrowing to help construct Nordstrom, the luxury department store that is the centerpiece of the mall.

Construction of the anchor store is slated to begin this summer. Norfolk officials expect to pay off the loan using lease fees and tax revenue generated by Nordstrom's operations.

The authority's budget, which contains a mix of local and federal dollars, also includes about $12 million for downtown street and water and sewer improvements.

That includes $2.6 million to overhaul Boush Street, which will accommodate a $32 million residential development planned by Connecticut developer Arthur Collins between Duke and Boush streets. Collins has said construction of his project also will begin this summer.

In addition, the city is providing the authority with about $1.1 million to pay debt service and make improvements to Waterside, the festival marketplace on the Elizabeth River downtown.

About $300,000 of that will go to renovate quarters for Hooters, a new Waterside tenant, while another $100,000 will upgrade the air conditioning and heating system to serve the restaurant and bar.

Norfolk officials said that Hooters is matching the city's share and that the restaurant will pay back the city's $300,000 investment over a 10-year period.

Overall, the authority plans to spend $103.5 million during the next fiscal year. Of that, $54.9 million is designated for development projects, while $48.5 million will fund public housing neighborhoods and the federally subsidized housing program.

The budget also provides $6.9 million to begin a redevelopment program with Old Dominion University on Hampton Boulevard between 41st and 48th streets.

ODU is providing the money to buy and demolish property and relocate residents. The project is part of ODU's expansion, including construction of a convocation center, but it also will include residential redevelopment.

Other big-ticket items in the budget include $2.4 million to acquire, demolish or rehabilitate blighted property in Berkley and $700,000 to continue efforts to develop a shopping center there. Other neighborhoods that would receive more than $1 million in projects are Brambleton ($1.8 million), Park Place ($1.5 million) and Lamberts Point ($1.08 million).

Housing authority officials said they tried to be fair in deciding how to distribute neighborhood funding in the face of the city cutback. Neighborhoods that would get less money next year than they did this year include: Lamberts Point, South Brambleton, Cottage Line, the East Ocean View conservation area, Huntersville/Church Street, Ballentine and the Mid-Town industrial area. ILLUSTRATION: Graphic with color photos

The budget and The cuts

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