Divided Virginia Beach council approves 7th economic study of convention center area

VIRGINIA BEACH — The seventh time’s a charm for a study of the Virginia Beach Convention and Sports Center district, according to seven City Council members who voted Tuesday to proceed with yet another evaluation of the area.

Four disagreed: Barbara Henley, Jennifer Rouse, Chris Taylor and Sabrina Wooten voted against the study, which is estimated to cost about $200,000.

Taylor said he believes the area has been studied enough and that this latest one is “being strategically done to defer the Capstone proposal.”

Washington-based Capstone Development was the only respondent of a city “request for letter of interest and qualifications” for a mixed-use development adjacent to the convention and sports centers in 2022. The company has proposed a convention center hotel, apartments and retail on the land next to the convention center.

Mayor Bobby Dyer said a decision on what do with the land will include public input and that the analysis will help the city “take this piece of clay and mold it into what we need” to generate new revenue sources to help paying for the growing costs of running the city.

Six studies over the past two decades all concluded the convention center, which is about a half-mile from the beach, needs a headquarters hotel and a bigger, mixed-used project that can go along with it, according to the city.

The study approved Tuesday will look at several elements. First, it will hash out the economic impact of the Capstone proposal to determine if it will be profitable for the city.

The study will also help provide direction on land uses in the resort area. It will specifically focus on city-owned properties between 17th and 22nd streets, including the Virginia Museum of Contemporary Art and the Visitors Center.

The resolution approved Tuesday calls for the study to review uses that are “compatible with the Virginia Beach Sports Center and possible action sports uses.” It also requires the study to include input from the historic Seatack community.

City parks and recreation officials have tossed around an idea to build a large-scale action sports facility to draw out-of-town athletes and spectators in Virginia Beach, but the City Council instead decided last year to focus on enhancing its existing facilities rather than build new ones.

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Meanwhile, the convention center is losing money every year.

The annual cost of running the facility exceeds the amount of revenue by more than $2 million, according to a recent audit, which looked back five years. The audit found that less than 20% of the events held over the last five years at the convention center generate hotel room stays. The venue’s management team attributed the low number to the absence of a headquarters hotel, parking garage, and retail, restaurants and shops within walking distance.

Despite the losses, the City Council hasn’t pulled the trigger on a hotel plan yet, and this latest study may only graze the surface.

Some council members had concerns about spending money specifically on the Capstone proposal if they ultimately decide to go in a different direction with the land around the convention center.

In response, City Manager Patrick Duhaney said he’ll plan to hold off on a infrastructure cost analysis of the Capstone project, which would help the city understand how much public improvements including storm water, public utilities, parking, and roads needed to support development of the property will cost taxpayers. That portion of the study accounts will cost approximately $50,000.

Stacy Parker, 757-222-5125, stacy.parker@pilotonline.com