
DATE: Monday, September 22, 1997            TAG: 9709220042

SECTION: LOCAL                   PAGE: B1   EDITION: FINAL 

SOURCE: BY TOM HOLDEN, STAFF WRITER     

DATELINE: VIRGINIA BEACH                    LENGTH:  118 lines

MOVE MEANT TO BETTER SERVE CLIENTS

The talk has been about the hotel. It has been about the money. Within City Hall, it has been about the surprise upon learning that a $12 million project could get much more expensive.

Lost in the acrimony of a planned relocation of the Community Services Board's facilities - a plan that could go millions over budget - is why the board is so intent on moving its operations to Bonney Road in the first place.

Why there and why now?

Just take a look, say board members and the senior staff. Each year, this agency attends to the needs of 8,000 Virginia Beach residents troubled with problems of alcohol, drugs, mental illness and mental retardation.

``I don't think you could find another area of the city, with the possible exception of the southern part, where we'd have enough land to cluster services and make it more patient-friendly,'' said Donald V. Jellig, the board's chairman.

The site, he added, is accessible by public and road transportation networks. It's in the city's core and, perhaps most important, is not likely to provoke ``Not-in-my-back-yard'' sentiments.

``We're dealing with the mentally ill, mentally handicapped and substance abusers,'' Jellig said. ``You can appreciate how people would react to that.''

When the City Council appropriated money last December for the purchase of a Days Inn, the Unclaimed Freight Co. and a private residence, it expected to see the Bonney Road properties renovated and a new home created for the board's operations.

The project was supposed to cost $12 million, but the council was surprised to learn two weeks ago that the total cost, after renovation, would run from $19.4 million to $18.1 million, depending on the configuration of the site.

Faced with such a high cost, the board voted to tear down the properties and start over. That would cost an estimated $17.2 million, including the purchase. The board figured that additional funding could come from money set aside in a contingency fund and a request that the city authorize the issuance of bonds.

Dennis I. Wool, the Community Services Board's executive director, is scheduled to appear at the city manager's briefing on Tuesday to explain to the City Council how the cost changed.

Rental cost is one reason the board wants to vacate the roughly 40,000 square feet of space it leases at the Pembroke Office Park. Current rent, held low by rates that are below market value because of the high volume of space the agency uses, costs the board $522,000 a year. It is projected to increase to $700,000 in just three years.

Rent is not the only factor. Jellig and others on the board have argued that in the long run the city will be better served by ending its leasing arrangement and investing in property it can own.

Jellig, who is vice president of Sentara Health System and president of Sentara Enterprises, said the board considered other sites in town besides the Bonney Road location, including purchasing one of the buildings in the Pembroke Office Park. That option was shot down because the building was too small and could not be expanded.

``I pushed them to look at alternative sites,'' Jellig said. ``When you're amassing 10 or 12 acres and are trying in a way that won't hit neighborhoods, you're basically left with the industrial park. But that's not very consumer-friendly.

``I challenge anyone to tell me where we can build or lease 100,000 square feet in this town,'' he added. ``You can't find 15,000 in any one place, much less 100,000. It's a neighborhood issue and a real estate one.''

Wool, the board's executive director, said the reason the board began looking was that the leases were about to expire.

``It's prudent to see if there's another option,'' Wool said. ``We looked at other leases, raw land, lease-purchase arrangements, built-to-suit options. We had 15 months before our leases were up for renewal. We did the same thing in 1986, 1991 and now.''

Wool said that every site considered had to meet three criteria: it had to be compatible with the programs the board oversaw, it had to be accessible both by car and public transportation, and it had to be affordable.

``From compatibility and access, the hotel site was four-star,'' Wool said. ``And at the time, we thought the cost was pretty reasonable, too.''

City Councilman Louis R. Jones, who represents the Bayside Borough, said he was a little skeptical about board assertions that the Bonney Road site was the best one.

``To say that there is no other place to go is kind of a broad statement,'' Jones said. ``I have not heard that there isn't.''

Like many on the council, Jones said he was surprised to hear about the projected cost overruns and unhappy about the effect they have had on the public's perception of city government.

``My reaction now is that they should should live within their budget,'' he said. MEMO: COSTS FOR PROPOSED MOVE

Here is a breakdown of the costs associated with the proposed move by

the Community Services Board to a new centralized campus on Bonney Road.

The board has recommended that the City Council support the option for

new construction, which will require $3,060,520 in additional

appropriation authority and $1,560,520 in additional bonding authority.

The board will underwrite the annual capital lease debt service within

its appropriations.

original full campus** revised* new

Facilities/land: $5,715,000 $5,715,000 $5,715,000 $5,715,000

Arch./engineer: $500,000 $830,000 $777,247 $765,320

Inspection: $216,000 $216,000 $216,000 $216,000