Two Cities, Two Tales

Two Cities, Two Tales
We have two projects.

And we have two cities – Suffolk and Norfolk. Both have agreed to invest millions of public dollars in return for tax revenues and jobs.
 
Which is the better deal for the public?

You choose.

Suffolk?

To keep 300 workers from the unemployment line, the city will give Unilever $3.7 million over six years if they keep its Lipton Tea plant open. The state will throw in another $1 million to sweeten the pot.

In return, Unilever will upgrade its plant with new equipment, an investment valued at $96 million.

Public investment: $4.7 million

Private investment: $96 million in new plant and equipment

The return: 300 employed workers and undisclosed amount of real estate and personal property taxes.

Or Norfolk?

To attract visitors, tourists and thrill seekers, city officials have agreed – at least in public – to finance a portion of a $126 million 300-bed hotel, 50,000 square foot conference center and a 600-space parking garage at the corner of Main and Granby Streets.

The developer, Bruce Thompson, has agreed to invest $64 million of his own money in the hotel.

The city will put up $19.5 million for the parking garage, to be financed with parking fees, and $42.5 million for the conference center, to be paid for by bonds.

The debt service on the bonds will be paid for by money from the city’s Public Amenities Fund, funded by a 1 percent tax on meals and lodging.

The city has already spent $16 million buying and demolishing buildings to prepare the site for a hotel, conference center and parking garage.

Public investment: $78 million

Private investment: $64 million

The return: projected $2 million in tax revenues a year and a projected 500 jobs

Also consider.

Unilever/Lipton has been paying its bills routinely and employing 300 workers.

Whereas, the Norfolk property has generated no tax revenues on the property for eight years due to the collapse of several deals.

So which one is a better deal for the public, financially?

And skip the “what ifs” and speculative statistics – such as the hundreds of people who will flock to downtown Norfolk and spend bags of money in restaurants, shops and at food carts, or even on art by local artists in the proposed “Downtown Arts and Design District.”

Evaluate the deals on their own merits.

Say it’s so…
It could happen.

The Savoy, really 161 Granby Street, the antique building cited for code violations and leaning precariously onto City Hal Avenue, could be sold by the end of this month.

Even better, the former Union Mission, haunt of homeless men in search of shelter and sustenance for three decades, could also be sold in April. The 100-year old former Union Mission is referred to as The Rockefeller, a former US Navy YMCA.



“We are expecting to close the Savoy by end of the month,” said Jeff Prioreschi, an executive with South Carolina-based US Development Co., the company that appeared on the scene in 2009 and vowed to buy both properties for conversion to affordable apartments.


“The Rockefeller - we were to close in Dec and construction costs came in high and we had to work with our subs to get costs back in line,” Prioreschi said in an email. “We have been in constant communications with the Union Mission and they have been wonderful to work with.”

“We expect to close no later than April 5th,” he said.