In Norfolk, the City seeks to guide development through a series of long-range plans. For example, 30 years ago, a public/private partnership built Military Circle Mall, sparking development along Military Highway that continues to this day.

Sometimes, the City has waited for years for the right project to come along. Visitors to the City in the 1980s walked across blocks of surface parking lots where MacArthur Retail Center now stands. The parking lots held the space open as the City pursued developers, assembled land and rejected proposals that would have developed the site piece-meal. Finally City leaders interested an upscale retail developer.

"In key areas, Norfolk officials have sought to find the highest and best use for a location."

But, to close the deal, the City agreed to construct two much needed parking garages (revenue bonds to be paid off by parkers), streetscaping and utilities, and secured a $33 million bank loan to construct and equip the Nordstrom anchor store (the loan is being paid off by rent and revenues).

The City total? Approximately $90 million. The private contribution? $200 million from the developer for construction of the mall. Today, not only does MacArthur Center draw 12 million shoppers a year, the construction spawned a development boom in new office buildings, retail, condos, restaurants and theaters.

Similar “placeholder” spots are identified in the City’s long-range plan for sites throughout Norfolk – parking lots, outdated City building, cleared land, struggling neighborhoods – in key strategic places waiting for the right time or the right project to come along.

The result of City seed money (infrastructure or other funding) in each case brings new private investment and new jobs, new money for other City priorities and neighborhoods and new businesses and residential opportunities, even residential tax reduction – just the “end” city leaders and residents had in mind. In 2005 development officials estimated morn than $5 billion in private development in the past five years.
Ironically, as the City has seen increasing success attracting private investments, residents increasingly ask – “Why?” whenever the City finds it necessary to enter into a new partnership with a private developer.

Why give money at all? If it’s a good project, won’t it be built anyway?

Many buildings are constructed with little or no City investment. But, developers in Norfolk face many challenges. First, is the reality of a 66 square mile City that cannot legally expand its borders. Most of its land has been developed, torn down (and in 1776 burned down) and redeveloped many times.

According to Development Director Rod Woolard, building in an already developed area is more expensive and more difficult that building on vacant land, particularly downtown.

For instance, small, odd sized lots mean a developer has to construct a concrete, multi-story building with the added code requirements (such as high-speed elevators) than a wood framed three-or-four story building the same size along a highway in the suburbs, said Woolard.

Add to that, the City’s desire to implement its plans. In key areas, Norfolk officials have sought to find the highest and best use for a location. While developers are increasingly willing to spend their own money, it is the specificity of the City’s expectations for a particular location that often drives the need, and its willingness, to enter into public-private partnership through something like a Performance-based Grant or other incentive.