Military Circle Redevelopment Pre-Proposal Conference Monday, October 5, 2020
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Military Circle Redevelopment Pre-Proposal Conference Monday, October 5, 2020 Jared M. Chalk Executive Director, Economic Development Authority of the City of Norfolk Director, Department of Economic Development 1 Pre-Proposal Conference Agenda I. Introduction and Instructions II. Project Overview Presentation i. Please submit your questions through the “Chat” feature. III. Break i. Staff will prepare answers. IV. Questions & Answers Technical Difficulties? Please text Sean @ 757.985.6925 2 3 BACKGROUND ▪ Over the years we have stayed focused on development in the eastern portions of Norfolk 4 Why did the City/EDA get involved? • In 2012, the City obtained assistance from the Urban Land Institute to convene a Technical Assistance Panel (TAP) to study the area around Military Circle Mall in greater detail. • Some of the ULI panel recommendations can enhance the area’s redevelopment potential: • Slow vehicular traffic and improve pedestrian accessibility • Improve vehicular accessibility and retail visibility • Develop an architectural standard for the area • Evaluate increased zoning density and shared parking • Relocate above ground utilities • Include open-air green space within development In 2015, UDA Study completed that further outlined a vision for the area 5 Military Circle Area BOULEVARDS the crossroads of the INTERSTATES Region: LIGHT RAIL SITE Center of Commerce with Highest Concentration of Jobs in Hampton Roads Employment and Compensation for (2015) Total Average Locality Square Miles Employment Compensation Norfolk Employment Norfolk 211,869 $73,766 Portsmouth 60,795 $72,232 Norfolk Newport News 123,464 $68,802 All other Hampton 75,251 $63,485 All other 16 16 Suffolk 39,549 $61,256 localities localities Roanoke 81,963 $58,036 Virginia Beach 254,958 $56,070 Chesapeake 127,190 $52,965 Hampton Roads Area Hampton Roads Area • Norfolk has the highest average in Square Miles = 2,909 Employment = 730,322 compensation in Hampton Roads Sources: Bureau of Economic Analysis (2015); Hampton Roads Planning District Commission and Hampton Roads Regional Benchmarking Study (11th Edition), 2016. 16 2020 Total 2020 Total Population Site Population Ages 20-64 880 N Military Hwy, Norfolk, VA, 23502 (20 min) 771,378 472,007 500 Volvo Pkwy, Chesapeake, VA, 23320 (20 min) 606,704 366,504 4525 Main St, Virginia Beach, VA, 23462 (20 min) 706,917 429,346 Esri Business Analyst 2020 Retail Site Expenditures 880 N Military Hwy, Norfolk (20 minutes) $5,916,192,203 500 Volvo Pkwy, Chesapeake (20 minutes) $4,796,579,342 4525 Main St, Virginia Beach (20 minutes) $5,883,017,885 Esri Business Analyst 8 Centrally Located in Hampton Roads Destination Drive Time Distance from from Military Military Circle Circle Mall Mall Downtown 10 Minutes 5.9 Miles Norfolk Virginia Beach <15 Minutes 6.6 Miles Town Center Greenbrier in 15 Minutes 8.4 Miles Chesapeake Peninsula 25 Minutes 19.0 Miles 9 Future Resilient Development - CHANGING ENVIRONMENT SEA LEVEL RISE AND RECURRENT FLOODING SPINE OF HIGH GROUND Lighter areas on map projected to be safer from recurrent flooding 10 Regional Broadband Ring 11 FUTURE TRANSPORTATION Four alignments have been chosen for Tier 2 Evaluations Draft Environmental Impact Statement Initial Recommendation Fall 2020 Spring-Summer 2021 Environmental Impact Results Our Investment 824 Office Building – 100% leased Photo courtesy of Trasi King 27 The Norfolk Economic Development Authority recently approved an $11 million purchase of the area shown in green. 14 Former Doubletree Hotel Site $2.4 million acquisition 15 Recent Real Estate Moves Sold to MPB, Inc (Sentara/Optima) Purchased for $11 million Purchased for $2.4 million Ownership Map Current Mall Tenants Major Perm Tenants • Cinemark – 84,087 Sq. Ft • Lease Expiration – 2025 : 4(5yr) Options • Ross – 30,187 Sq. Ft • Lease Expiration – 2026 : 1 (5yr) Option • Bank of America – 3,301 Sq. Ft • Lease Expiration – 2025 : 1(5yr) Option Majority of Tenants are considered temporary 18 Strategic Vision • Transform an underperforming and aging Norfolk landmark into a holistic and vibrant community, anchored by one or more major employers, and enlivened by a mix of live-work-play uses and amenities. 19 Project Area • Military Circle Mall is a 50-year-old suburban-style shopping mall that opened in 1970. • Its 935,170 square feet is now only 54% occupied. • 15 story 200 room hotel, also built in 1970, that has been vacant for over a decade. • The Military Highway Corridor is a regional retail destination. • It includes the JANAF shopping center, Military Circle Mall, IKEA, and the Norfolk Premium Outlets. • 28% of all the city’s retail sales and 20% of food, beverage, lodging, and admissions occur in this corridor. • Military Circle Mall is the worst performing asset. Project Goals To develop the Military Circle area into: • A premiere residential, employment, and entertainment community • A healthy and sustainable community • A walkable neighborhood Project Components • Office Complex: Develop a signature corporate office complex with 300,000-550,000 square feet of office space. • Hotel: Proposals should consider how to support the additional business activity with hotel rooms and meeting spaces that are easily accessible and visible upon entering the community from Military Highway. • Transit: The development should take into consideration existing transit connections including current and future alignment for light rail. • Sustainable Development: The development should incorporate state-of- the-art technology that promotes innovative and sustainable building methods. • Residential: Housing developed should allow for a full range of quality choices for residents of all income levels. • Parking: Provide an integrated parking system that adequately serves the needs of the project while minimizing the extent of paving and empty spaces. Continued • Quality design and density: High architectural quality development and well-planned site design for maximum efficiency of the entire site. • Economic Development: Directly increase the Norfolk tax base, provide the basis for new jobs with living wages and increase the aesthetic appeal of the City. • Workforce/Job Creation: Create opportunities for permanent jobs for workers of various of skill levels and abilities. • Minority Business Support: Support the City’s mission to facilitate, produce, and advance opportunities for minority business. • Business Retention Assistance: Program to assist current businesses within Military Circle Mall to maintain operations. Revenue to Pay Bondholders CDA SSD Community Tax Increment Development Special Service Financing District Authority District “CDA” “SSD” “TIF” (Dedicated Funding From Increased Real Estate Issue Bonds Values) Issue Special (i.e. 30-Yr Debt) Assessment (i.e. Sales, Hotel, RE Tax) Pay for: • Infrastructure Pay for: • Acquisition • Special Services (i.e. Increased Security, Landscaping, etc.) 25 Economic Development Authority • EDA Currently owns the land • Not the City of Norfolk • EDA is a political subdivision of the Commonwealth of Virginia • The EDA is authorized to issue revenue bonds to finance facilities for non-profits, manufacturers, and businesses. Neither the EDA nor the City have any liability under the bonds • EDA tasked with implementing the vision of Norfolk City Council 26 Tentative Project Schedule STAGE 1 • 9/25/2020 -RFQ Issued • 10/05/20 - Proposers Conference / Proposer written inquiry deadline. • 10/09/20 - Proposer answers due / Addenda issued. • 11/20/20 - RFQ Submissions Due (COB). • 12/18/20 - RFQ Evaluation Complete / Short List for RFP (Tentative). STAGE 2 • 12/28/20 - Invitations to submit RFP response (Tentative). • 01/25/21 - Final RFP Submissions Due (Tentative). • 02/01/21 - RFP Evaluation Complete / Start negotiation with finalist(s) (Tentative). • 02/15/21 - Final Selection (Tentative). NEXT STEPS • BREAK – 15 MINUTES • Q & A – 30 MINUTES 28.