A developing picture

As Norfolk prepares for some sizable development projects, city officials don’t plan to forget the strong business base that positioned the area for such investments.

“We’re really focused on business expansion and our primary employers,” says Jared Chalk, Norfolk’s director of economic development. “That’s been our focus this year and it’s paid off really well for us.”

Chalk points to this year’s announcements of expansions and new businesses locating in Norfolk as proof that this plan is working. According to the Virginia Economic Development Partnership, Norfolk had eight economic development announcements representing nearly $140 million in new investments during the first half of 2021. Six of the projects were expansions of businesses currently in the city. The remaining two — Atlantic Wind Transfers and Breeze Airways — were new to the city.

“We’ve been doing really well with business expansion and retention projects,” Chalk says. Lyon Shipyard, for instance, announced in June that it’s undertaking a $24 million expansion that will increase the ship repair company’s capacity from 120 to 165 ships a year. Lyon also plans to add about 120 jobs. Likewise, international shipping company CMA CGM announced in February that it will invest $36 million to expand its Hampton Roads operations and its headquarters in Norfolk as well as establishing a business incubator in Arlington County. In total, CMA CGM is expected to add 415 jobs in the state.

While those announcements were widely lauded, the biggest buzz in the Mermaid City right now surrounds the proposals for redevelopment of Norfolk’s Military Circle Mall area. The Norfolk Economic Development Authority purchased the aging mall and an adjacent hotel, then selected development groups to submit proposals for revitalizing the area. In early August, the city released details and renderings from the three development groups that are in the running to oversee the project and asked for public input on the proposals.

“Probably the biggest thing on my plate… is the redevelopment of the Military Circle corridor,” Chalk says. The mall is located near Interstates 64 and 264, about four miles from Norfolk International Airport. It is 13 feet above sea level, which makes it the highest ground in Norfolk and raises its importance as a site for future growth.

Star power

NFL Hall of Famer Emmitt Smith and Grammy Award-winning music superstar Pharrell Williams, along with many well-known Hampton Roads developers, are in the mix of investors vying to be selected to recreate the area as a multiuse destination. Their proposals all call for some type of sports or entertainment venue in addition to housing, retail, lodging, offices and green space.

Crossroads Partnership LLC, a group led by Virginia Beach-based S.B. Ballard Construction Co. and Emmitt Smith’s real estate company, is proposing a “wellness development,” anchored by a 15,000-seat arena. Smith has ties to the area through his wife, Patricia, a Chesapeake native and former Miss Virginia. The Crossroads proposal includes a Sentara Healthcare office campus; a 128-room extended stay Hyatt House hotel; an indoor sports complex; nearly 1,000 market- and lower-priced residential units; retail shops; a park; and a walking path with exercise hubs encircling the area. Crossroads also plans to work with cultural and educational partners. Its three-phase development proposal would cost more than $900 million and be completed by late 2029.

Norfolk MC Associates LLC, a group that includes Virginia Beach hotel developer Bruce Thompson’s Gold Key | PHR hospitality company and another Virginia Beach developer, The Franklin Johnston Group, envision a project called “The Well,” which would have a 9-acre lake and more than 40 acres of park and open space as its centerpiece. The $663 million development would include an 8,000-seat outdoor amphitheater; a Sentara Wellness Village office campus; a 200-room hotel; 864 units of multifamily housing; and retail and entertainment space. The Norfolk MC proposal calls for an expansion of Norfolk State University with a business center focusing on startup companies and other interests, and it also incorporates the use of renewable energy.

The third proposal under consideration is from Wellness Circle LLC, a group that includes Virginia Beach native Williams and concert company Live Nation as well as Virginia Beach developers Armada Hoffler Properties and Venture Realty Group. The $1.1 billion Wellness Circle proposal includes an arena with at least 15,000 seats; a walking path and green space; 1 million square feet of office space including medical offices; a 200-room hotel; retail and restaurant spaces; and a variety of multifamily housing units, including low-income housing. It also would include at least one school from Williams’ Yellow nonprofit, which serves children from low-income families. The first of several planned Yellow schools, called Yellowhab, opened this fall in Norfolk’s Ghent neighborhood.

Chalk says the Military Circle proposals are all from strong development teams with exciting plans. “We’re hoping to make a final selection by the end of the year and move forward with one of them in the first quarter of 2022,” he says.

Doug Smith, president and CEO of the Hampton Roads Alliance, says that major projects like the redevelopment of Military Circle help Norfolk market its strength at placemaking — creating new neighborhoods where people want to live, work and play. “It becomes so important for a region,” Smith says.

Virginia breeze

Norfolk also is primed to benefit from the blossoming offshore wind industry taking off in the Hampton Roads area, spurred on by a massive $7.8 billion, 180-turbine offshore wind farm that Dominion Energy Inc. plans to build 27 miles off the Virginia Beach coast by 2026.

The Coastal Virginia Offshore Wind project will be the largest offshore wind farm in the United States and also one of the world’s largest wind farms. The 800-foot-tall offshore wind turbines will generate 2.64 gigawatts of power — enough to power 660,000 homes. The wind farm is a key part of Dominion’s plan to generate all of its energy from carbon-free sources by 2045, as mandated by the General Assembly. Dominion has already erected two pilot offshore wind turbines that generate enough electricity to power 3,000 homes.

“There’s a lot going on here, in terms of supply chaining, to assist in that emerging industry,” Chalk says. “We have a big project we’re going to announce soon related to offshore wind.”

In August, the Business Network for Offshore Wind’s International Partnering Forum (IPF) hosted its second annual conference in Richmond, sharing industry developments and one-on-one networking opportunities for North American companies involved in offshore wind.

Smith with the Hampton Roads Alliance invited conference participants to visit Hampton Roads and get a feel for what it offers. “We think Virginia, and Hampton Roads in particular, has some really unique advantages when it comes to offshore wind,” he says. There is open land, a marine workforce and unobstructed water access to the offshore turbines, he says, and Norfolk is poised to gain employers as this industry expands.

Another major economic growth opportunity for Norfolk is the $500 million HeadWaters Resort & Casino under development by the Pamunkey Indian Tribe alongside Harbor Park, overlooking the Elizabeth River.

“I’m confident that this project will exceed the expectations of everyone. It will be the destination of choice for gaming in Virginia,” Robert Gray, chief of the Pamunkey Indian Tribe, said in April, when the tribe unveiled updated renderings for the development, the first phase of which is expected to be completed by the end of 2023. “We are living up to every promise we made and are determined to make this a project of which Norfolk can be proud,” Gray says.

Jay Smith, a spokesman for the resort casino, says development will get underway as soon as the casino’s gaming operator’s license is approved by the Virginia Lottery.

“We are heavily immersed in the design phase right now,” Smith says, but “we can’t put shovels in the ground until we get that license.” The Norfolk casino is expected to draw about 6.2 million visitors to the city a year, he says.

Tourism has long been a substantial part of the Norfolk economy. City officials believe that draw will be strengthened by the developments to be completed in the next few years, and by expanding air travel options. The redevelopment of the Military Circle Mall area, the upcoming casino and the entrance of Breeze Airways into the market with seven nonstop flights to popular destinations all serve to bolster an already strong tourism base, Chalk says. 

“All of these things speak to diversifying the area in terms of tourism,” he says. During the pandemic, hotel occupancy in the Hampton Roads region was much stronger than in most parts of the country, Chalk says. “We led the nation in occupancy rate for many consecutive months.”

People weren’t traveling by air as much as they normally would, and therefore destinations that could be reached by car were popular. “They were coming down to this market from the Northeast,” Chalk says. The trend was encouraging at a time when many inland markets experienced devastating hotel occupancy rates.

Chalk adds, “We think Norfolk is a unique market for a two- or three-day trip.”   

This story has been corrected.