DATE: Wednesday, July 23, 1997              TAG: 9707230647

SECTION: LOCAL                   PAGE: B1   EDITION: FINAL 

SOURCE: BY JON GLASS, STAFF WRITER 

DATELINE: NORFOLK                           LENGTH:   69 lines

CITY LAYS CORNERSTONE FOR DOWNTOWN HOTEL NOW FORMALLY OK'D, PROJECT SHOWS CONFIDENCE BY PRIVATE DEVELOPERS.

In a move viewed as a significant step toward revitalizing downtown, the City Council on Tuesday formally approved replacing a city-owned parking lot with a 13-story, suites-style hotel.

The development is a sign that entrepreneurs have grown confident enough of downtown's potential to invest private money in the rebirth, officials said. And that, they said, shows that the decision to spend millions of public funds in rebuilding downtown is paying off.

Welbro Development Inc., the Florida-based developer that will build the hotel, has announced a $25 million commitment to the project. City officials have said that the only incentive offered was donation of the lot, which they estimate has a market value of about $1.7 million.

``The city sees it as an excellent development opportunity, and it's just a further indication that the plan we've been following for the past several years is working,'' Mayor Paul D. Fraim said.

The lot is on the southeast corner of City Hall Avenue and Granby Street, a block from the MacArthur Center mall, a $300-million project that officials say is acting as a catalyst for the private investment they're seeking. The hotel's entrance would be on City Hall Avenue across from the Federal Building.

The council's unanimous vote Tuesday to award a ``Downtown Development Certificate'' to Welbro should help the developer in negotiations with a hotel chain that would operate the facility. The firm's president, Edward L. Schrank of Orlando, announced in April that he was bringing a Hilton Suites Hotel.

But talks with Hilton officials broke down over disagreements with the design Welbro was proposing. Schrank said the new hotel's architectural style would blend with the existing buildings downtown, which is encompassed within a historic overlay zoning district.

Schrank, who met briefly with council members before they voted, said he is negotiating with three hotel chains. He described them as being four-star hotel flags.

``I think Norfolk would be proud to have any one of them,'' Schrank said. He added: ``We're real positive on Norfolk. We want to be a part of the community.''

Schrank declined to name any of the chains involved in the negotiations. But he said that ``we're real close'' to closing a deal with one of them.

According to information provided to the council by the city planning staff, the hotel would include a themed dining room and bar on the first floor, meeting and convention space, a ballroom and an amphitheater for 75 people. The total building would consume a city block between City Hall Avenue and Plume Street.

Schrank said it would be competitively priced with other downtown hotels, including the nearby Marriott and Omni, to attract business travelers and conventioners. City officials, who hope to eventually bring two more hotels downtown, said the development meshes with the city's goals for economic growth.

``It'll strengthen our hold on the convention market and capture more of the tourists that we're trying to bring in,'' Councilman G. Conoly Phillips said.

In giving approval, the council granted three waivers to existing zoning rules regulating development in the downtown district.

They would have required the developer to build to the lot line on 75 percent of the street frontage along Granby and Plume streets; leave open space on 10 percent of the lot; and provide windows on at least 50 percent of the ground-floor facades along City Hall Avenue and Granby and Plume streets.

The hotel would contain 180,000 square feet of space and about 220 suites. City planning officials said it would not disrupt pedestrian flow or create traffic problems. Guests would park in a city-owned City Hall Avenue garage. ILLUSTRATION: Map by ROBERT D. VOROS\ The Virginian-Pilot

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