Hurricane Pat: Category 5 Development Descends on Virginia Beach

Pat Robertson is back in the news: not exploring the interface between meteorology and theology but as a real estate developer in Virginia Beach. Consultants for the Christian Broadcasting Network, reports the Virginian Pilot, have unveiled detailed plans for Blenheim Park, a 500-acre complex near Regent University.

Rivaling Norfolk’s MacArthur Center and Richmond’s Innsbrook office park in size, the development would include two hotels, a movie theatre, a department store, a big-box store, and a combination of 1,000 single-family and multi-family homes. The complex would generate hundreds of millions in tax revenues for Chesapeake and Virginia Beach when completed, and contribute $15 million to $20 million a year in land leases to CBN.

The good news: Blenheim Park would be a mixed-use development integrating shops, stores, offices and 1,000 single-family and multi-family residential units into a town concept. Mixed use development inspired by (if not always true to) New Urbanism is all the rage now. I haven’t seen the plans and sketches, but early indications that the project will be well designed on a micro level.

The potential controversy: To be economically viable, the CBN development would require construction of an interchange on Interstate 64 near the existing interchange at Indian River Road. The cost of the interchange, plus other road improvements, could well exceed $100 million. Robertson would pay up to $85 million by creating a Community Development Authority and issuing bonds.

The article is unclear about the financing mechanism, saying only, “The [CDA] would capture a portion of the increases in property taxes and other taxes from Blenheim Park and use it to pay off the bonds over a 30-year period.” Does that mean (a) that the properties would be taxed at the normal rate, and a portion of the taxes will be siphoned off to support the project, or (b) that the bonds would be paid off through a tax surcharge? If the answer is the former — if CBN expects to pay off the transportation improvements through the normal taxation rate, thus short-changing Virginia Beach and Chesapeake on the cost of other government services and facilities — a firestorm will erupt as soon as the citizenry understands what’s happening. Most likely, the Robertson people are smart enough to propose the latter.

Meanwhile, there’s the question of whether the other $15 million will come from. Who will pay for that?

The first question that needs to be asked: Will Blenheim Park contribute to the creation of a community with a balance of housing, offices, retail spaces, health and educational facilities, and other amenities? This question is critical because the only way to address traffic congestion in south Hampton Roads is to create communities that support fewer, shorter car trips instead of msucling onto I-64 to reach most of their destinations. The preliminary evidence is not encouraging. Developers are saying they expect to draw visitors from 40 miles away. On what roads? Interstate 64?

The second question that needs to be asked: Will Blenheim Park develop a Transportation Demand Management plan that will offset localized traffic impact by encouraging mass transit, ride-sharing, telework and other strategies? That’s state-of-the-art development in Northern Virginia, and it needs to be in Hampton Roads as well.

This is a huge project that will shape south Hampton Roads for decades to come. If done properly, it could help ameliorate the region’s steadily worsening traffic congestion. If done improperly, it could accelerate the drift to round-the-clock gridlock. Local government officials had better get this right.

(Rendering credit: Kahn Development.)

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2 responses to “Hurricane Pat: Category 5 Development Descends on Virginia Beach”

  1. Ray Hyde Avatar
    Ray Hyde

    Suppose this thing paid all the upfront capital costs for the interchange, the schools, police, fire, etc. Then all the new taxes from this enormous new tax base (also provided at no cost to the county) would be essentially free money except for recurring costs, and that would lower the tax rate for everybody else.

    Would the residents then be willing to keep the old (higher) tax rate and donate the excess new taxes back to Pat in order to eventually repay him for all the capital goods he bought for the county? I don’t think so.

    If so, what is the difference from borrowing from Pat and borrowing from the bank? This is a case that makes it clear that new development does cause immediate and enormous stress on the capital budget, which should be alleviated by developer contributions.

    But here’s the problem. Probably, residents are not paying enough to cover recurring costs anyway, let alone enough to chip in a little extra for future community capital improvements. That is why we are constantly in a state of catch up, and why our children are in trailers. And, just as obviously, some of that is caused by new development, too.

    If there is money in the budget for capital improvements, and such improvements (like roads) get built, then they are seen as a subsidy to the developers. But if the money has not even been even remotely allocated and planned for or if it is inadequate, then all of the new capital county goods are paid for by the developers (and their customers), but this is NOT seen as a reverse subsidy to the county.

    Someone posted a reference to the methodology used by PW county to calculate the excess capital costs caused by development, which I have not seen. I have seen part of the method used by Fauquier, and it had a lot of fuzzy math in it, based on even fuzzier assumptions.

    I don’t know what the right answer is, and I suspect we aren’t even asking the right questions. But those people and shops are going somewhere, and either we will have to squeeze more into existing infratsructure, get better use out of unused infrastructure, or build additional.

    How many of those thousand households will go someplace else to shop to avoid the high priced beach area, and how many of the other million or so households will come there to shop and visit the beach? Ameliorate traffic sounds more like multiply to me.

  2. Toomanytaxes Avatar

    Ray – the following is a link to the Prince William County study.

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