
DATE: Saturday, October 11, 1997            TAG: 9710110481

SECTION: LOCAL                   PAGE: B1   EDITION: FINAL 

SOURCE: BY JON GLASS, STAFF WRITER 

DATELINE: NORFOLK                           LENGTH:  115 lines

DOWNTOWN TAX BASE BOOSTS NORFOLK AREA REVENUE HAS INCREASED 22% SINCE '95, WAY ABOVE CITY AVERAGE

Downtown's financial district continues to grow in importance as a tax base for the city, according to a newly released report.

Since 1995, the amount of tax revenue generated within the financial district, known as the ``Banks-Omni area,'' has increased 22 percent, a rate nearly 3 times higher than the average growth in tax revenue from business districts citywide.

The district, sandwiched between City Hall Avenue and Waterside Drive and including banks, office buildings, retailers and the Omni and Waterside Marriott hotels, pumped $9.8 million into the city's treasury in fiscal 1997, a 12-month period that ended June 30.

That's an amount equal to about 14 cents on the city's $1.40 per $100 real estate tax rate, and nearly enough to build two small elementary schools.

The financial district topped a

list of 28 business districts citywide in the amount of taxes generated during the year, according to an annual sales and revenue report issued by Sam T. Barfield, Norfolk's commissioner of the revenue.

``Downtown is doing much better than holding its own,'' Barfield said. ``It's encouraging to see downtown identified as a top producer.''

City Councilman Mason C. Andrews said Friday, ``It keeps the city from drowning.'' Andrews acknowledged the many financial challenges facing the city, including the region's poorest population.

The MacArthur Center mall now being built is expected to generate another $2 million in annual revenue for the city by the year 2002.

The growth in tax revenue downtown justifies the millions of dollars Norfolk has invested during the past decade to revitalize it, Andrews said.

``We've got an equation that makes it essential to make investments that will produce income to do these other services, like the cost of educating children,'' Andrews said.

Altogether, the 28 districts contributed $64.2 million in revenue to the city from eight key business taxes, for business licenses, utilities, sales, personal property, real estate, meals, lodging and admissions. That amount made up about 13 percent of the city's $488 million budget in 1997.

The report, Barfield said, reflects a stable economy.

``There has been a better overall value of businesses in all segments,'' he said.

There was encouraging growth, he said, in tax revenue from new and existing service and light industries in Norfolk Commerce Park and Norfolk Industrial Park, which together generated more than $7.1 million in taxes.

Tax revenue at the Industrial Park grew by more than $900,000, or 25 percent. The growth is attributed in part to two companies that service the military, including a 150,000-square-foot warehouse addition by Military Distributors and a $2-million refurbishment by Vanguard, said Robert G. Gargiullo, manager of business retention for the city's Department of Development.

Military Square, which includes Military Circle Mall, generated the second highest amount of taxes among the 28 districts, at $7.7 million, despite road construction on Military Highway that has caused major disruptions of business during the past year.

The growing 21st Street district, which includes Colley Avenue, ranked third, with $5.2 million in tax revenue. A range of new businesses has opened on 21st Street and Colley Avenue during the past year. Barfield said 21st Street has one of the broadest business mixes in the city, including manufacturing, medical, commercial, real estate, food sales and retail.

Officials attributed the uptick in tax revenue from the financial district in part to lower vacancy rates in downtown office buildings and a steady increase in the convention business.

Vacancy rates in office space declined 3 percent, to 14 percent, since last Oct. 1996, said D. Richard Bushey, assistant vice president of office leasing for Goodman, Segar, Hogan, Hoffler.

``It's nothing dramatic, but it's a healthy decrease in vacancy,'' Bushey said.

The Norfolk Waterside Convention Center, a city-owned facility that is operated by the Waterside Marriott, is reporting 90,000 room nights and 127,000 conventioneers in 1997, figures that have increased every year since opening in late 1991. In 1992, the center reported 72,000 room nights and 100,800 conventioneers. The city spent $15 million to build the center.

But Barfield's report also revealed uneven growth, with some of the city's neighborhood commercial districts recording a downturn in tax revenue of as much as 18 percent.

Ocean View Shopping Center, Five Points in Norview, Wards Corner, Little Creek East, Janaf Shopping Center and businesses along the Granby Street corridor downtown all contributed less tax revenue in fiscal 1997 than the previous year.

City officials said they suspect that the ongoing widening of Military Highway contributed to the decline at Janaf and that construction work on Granby Street curtailed business along portions of the Granby corridor. Redevelopment in East Ocean View, which has uprooted dozens of residents, is viewed as a factor in the drop in Ocean View and Little Creek East.

Barfield reported a drop of $466,022 in the admissions tax, a 17 percent drop, that he attributed to the lack of a big draw such as 1996's showing of Phantom of the Opera, the closure of two movie theaters within the past two years and a continued decline in attendance at Nauticus, the National Maritime Center.

Admissions taxes at Nauticus have dropped from $282,854 in calendar year 1994 to $105,858 in 1996 to $70,838 through the first eight months of 1997. The theaters that closed were the Circle 6 at Military Circle Mall and the Little Creek Cinema. ILLUSTRATION: Color photo

Tourism

Marriott Hotel...

Retail

The "Banks-Omni area" between City Hall Avenue and Waterside

Drive...

Redevelopment

The opening of the downtown campus of Tidewater Community College..

Graphic

Money Makers...

The top 5 tax generators among 28 business districts in Norfolk in

fiscal 1997:

For complete copy, see microfilm KEYWORDS: REVENUE NORFOLK TAX BASE