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Norfolk enters its redevelopment era
Robyn Sidersky// June 29, 2023//
Norfolk Mayor Kenneth Cooper Alexander has a vision for his city that includes increasing revenue without creating additional taxes for residents.
His focuses in achieving that goal include tourism, hospitality and entertainment — familiar parts of neighboring Virginia Beach’s economy. However, unlike Virginia Beach, he points out, Norfolk doesn’t have a reliable seasonal tourism base. It also doesn’t have the same kind of beachfront tourism infrastructure as Virginia Beach’s Oceanfront district.
Another challenge to Norfolk’s revenue, Alexander notes, is the fact that while the city is 97% developed, about a third of that property is occupied by entities that are exempt from real estate taxes, such as universities and the military.
So, the city’s strategy has been focused on redevelopment and economic development to fill the gap.
In the past few years, the city has seen some major projects announced, including the Pamunkey Indian Tribe’s planned $500 million HeadWaters Resort & Casino on the Elizabeth River near Harbor Park, as well as the city’s proposal to redevelop the former Military Circle Mall into an arena-anchored mixed-use development. But both of those developments have stalled due to changing economic conditions and other factors.
Other projects are on track, though, including expansions of the Nauticus maritime museum and the Chrysler Museum of Art, upgrades to Norfolk International Airport and Carnival Cruise Line’s increase in stops in the city, with a goal of year-round service out of Norfolk.
Additionally, Norfolk City Council voted in June to allocate $18 million to purchase the struggling MacArthur Center mall, which sits atop a 23-acre chunk of city-owned property that is prime for redevelopment.
Alexander wants to see the city attract more meetings, conventions and concerts, all generating taxes paid by non-city residents. But that’s no easy feat. It takes not only a thought-out vision but cooperation from many stakeholders — public and private — and time.
“It doesn’t take a rocket scientist to figure out where [the city needs] to be investing heavily,” Alexander says. “Investing in hospitality, entertainment, travel and leisure allows [Norfolk] to generate the money to invest in schools and public safety as long as possible and keep the city beautiful.”
Once touted as one of the city’s biggest projects in recent memory, the redevelopment of Military Circle Mall has seen little progress over the past several months.
Norfolk’s Economic Development Authority purchased the failed mall and an adjacent hotel for $13.4 million in 2020. Demolition is underway, having started in April, with the main mall building set to be razed in late summer. It’s not clear what will wind up being developed on the cleared land, although there are hints.
The EDA solicited redevelopment proposals for the mall property in 2020, ultimately narrowing the pool to three finalists that were invited in early 2021 to submit plans for large mixed-use developments centered around multiuse entertainment arenas.
Then, without formally making or announcing a decision, the EDA opened talks in July 2022 with one of the finalists: a high-powered joint venture led by music superstar Pharrell Williams, Virginia Beach-based Venture Realty Group and California arena management company Oak View Group. (The same trio is developing the $350 million Atlantic Park project at Virginia Beach’s Oceanfront.) Their proposed Wellness Circle project calls for a 15,000-seat arena, 1 million square feet of office space, a 200-room hotel and 1,100 housing units.
Last November, when discussing the status of the project during his Mighty Dream Forum event in Norfolk, a slightly exasperated-sounding Williams said of the Wellness Circle proposal that the “ball’s in their court,” referring to city officials. Little has been shared publicly about the project since then.
Sean Washington, Norfolk’s interim economic development director, says the EDA is still negotiating with the Wellness Circle team, but some issues have come to the surface.
Alexander says some unanswered questions remain about Wellness Circle’s plans, including who will pay for parking garages and infrastructure upgrades, as well as potential environmental impacts of the project. The mayor notes too that Norfolk-based Sentara Health owns about 15 acres of the land around Military Circle and two buildings there — 6015 Poplar Hall Drive and 824 N. Military Highway, the former JCPenney building — so that must also be incorporated into plans.
Another challenge is the prospective arena, and whether it is needed or wanted in Norfolk — and how much the city would have to pay in associated costs for it.
“The public participation required for that asset is potentially more than the city would prefer to absorb,” says Washington, who became interim director in August 2022. Parking and infrastructure improvements would be part of the package if an arena is built, and “figuring out the actual end game” for the arena’s use — such as whether it would accommodate sports events, music acts, etc. — have slowed the process, he adds.
However, many city officials acknowledge that the 52-year-old Norfolk Scope arena is getting long in the tooth and isn’t big enough to accommodate larger modern music acts that bypass Norfolk for Washington, D.C., Charlotte, North Carolina, and other cities.
Alexander says an alternative to building a new arena would be renovating the Scope so it can host “world-class concerts, collegiate basketball tournaments” and other high-profile events. Tearing down the Scope, he adds, is not being considered, even if Wellness Circle builds a new arena.
The mayor wants to make sure whatever replaces Military Circle is “the highest and best use of the land,” especially since the property is the physically highest ground in Norfolk — a big deal in a city threatened by flooding and sea-level rise.
He expects to have more answers about Military Circle’s future by the end of this year.
“We’re looking for development that will have some density there, because as we move from low-lying areas … we want to put everything on Military Circle,” including residential, commercial and industrial users, Alexander says.
Meanwhile, plans for the HeadWaters Resort & Casino — a partnership between the King William-based Pamunkey Indian Tribe and Tennessee billionaire Jon Yarbrough — have changed significantly.
When voters approved the project in a November 2020 referendum, its developers were pitching a $500-plus million resort casino with a 300-room hotel, restaurants, an entertainment venue, a rooftop pool, thousands of slot machines and as many as 150 table games. Later, HeadWaters’s developers announced plans to open a 45,000-square-foot, single-story temporary casino with hundreds of slot machines in the Harbor Park parking lot as soon as March 2023, while the permanent casino was under construction.
The temporary casino didn’t materialize, however, and the casino project seemed to be in limbo until mid-June, when developers submitted plans to the city for a development certificate for the permanent casino — announcing simultaneously that they were scrapping plans for the temporary casino.
“We have changed our approach and gone with a first-class experience from the get-go,” says Jay Smith, spokesperson for HeadWaters Resort & Casino.
According to the plan filed with the city, the permanent resort casino will be built in two phases. The first will focus on the casino, including a 45,000-square-foot gaming floor, restaurant and parking garage. While the plan doesn’t include details on the project’s second phase beyond renderings, Smith says phase two will include a hotel, outdoor pool, additional restaurants, an entertainment venue and other amenities.
HeadWaters’ developers plan to get the casino built and operational before moving on to the second phase, Smith says.
As submitted to the city, Alexander says, the casino plans fell short of what he was expecting. “Although it may be constructed in phases, I was not expecting them to turn [the plan] in phases,” Alexander says. The mayor adds that he was concerned by the lack of concrete details in the plan, as well as a lack of communication from developers on the casino’s application status with the Virginia Lottery, which must approve its operating license.
“We continue to ask them for the same information over and over again,” Alexander says. “I want all the details to accompany the pretty pictures. Submit the supporting documentation.”
However, in a March letter sent by the city to the casino developers, the city requested only conceptual details for the future phases of development, while it required details such as architectural renderings, building elevations and a site layout for the first phase, all of which were provided.
While the casino project moves forward, another city property — MacArthur Center — could also provide dividends.
The struggling downtown mall, built in 1999, is more than half empty and went up for sale in January. In a similar move to the city’s purchase of Military Circle mall, Norfolk City Council voted in early June to buy MacArthur Center for $18 million. (See related story.)
“We recognize the center is an important component of our downtown,” Alexander says. “The purchase will enable the city to take an active role — an active and strategic role.”
There has not been public discussion about what comes next, other than MacArthur Center continuing to operate as a mall as the city planned to reach out
to the mall’s tenants.
The mall has nearly 1 million square feet of leasable area and a multistory parking garage with about 4,000 spots.
Norfolk International Airport is another asset in the city that’s setting itself up for growth and change. More than 4 million passengers traveled through the airport last year, marking the busiest period in its 84-year history, and Norfolk Airport Authority CEO Mark Perryman knows accommodating more aircraft and processing more passengers is taxing its operations. A $30 million project is underway to rehab the airport’s main runway, renovations have been made to parking garages, and the terminals and concourses also will be modernized. Seven new gates will be added beginning next summer, along with a modern jet bridge, a central Transportation Security Administration Authority checkpoint and consolidated ticketing and baggage screening areas. Additionally, moving sidewalks are being reinstalled across a pedestrian bridge this summer, largely funded by $5.4 million from the Federal Aviation Administration. The original people mover was removed in 2017 instead of being repaired.
Perhaps the biggest change at the airport will be preparing for an on-site hotel, which will ease a citywide shortage of hotel rooms. In May, the airport put out a request for proposals, with a June 30 deadline, for the design, construction and operation of a hotel with around 150 rooms.
Another major announcement at the end of 2022 was the increase of Carnival Cruise Line’s 26 sailings from Norfolk, up from 11 seasonal sailings in October and May. That number will increase further in 2025, and ultimately the cruise line expects to offer year-round weekly departures from Norfolk, bringing an estimated 200,000 unique passengers into the city in 2023 and about 300,000 by 2025.
By that time, the Nauticus maritime museum will have completed its $21.5 million refresh, with five new museum galleries, including exhibits on sea life and Elizabeth River fish species set to be open in late June. In October 2024, the museum will open galleries focused on the Navy, the Port of Virginia and a STEM-focused sailing exhibition.
Nauticus Executive Director Stephen Kirkland, who also oversees the cruise program, says the museum’s board knew they needed to make a major investment in their “core product,” adding that the expansion has been in the works since 2018, although the pandemic delayed completion.
Also downtown, the Chrysler Museum is getting some shine, as it expands its Perry Glass Studio by 18,000 square feet, a two-phase process expected to cost $55 million and conclude in fall 2024. The expansion will triple the size of the Perry Glass Studio and double its educational and programmatic offerings.
Having all these improvements and new facilities arriving at the same time is helping to solidify plans for decades ahead for Norfolk’s arts and cultural scene — as well as the city’s economy, says Washington.
“Some people may think that all this investment is happening by coincidence at the same time,” he says, “but I would argue that it’s very, very strategic.”
Located at the mouth of the Chesapeake Bay, Norfolk’s vast waterfront acreage has earned it the nickname of “the Mermaid City.” Home to Naval Station Norfolk — the world’s largest naval base — the city has capitalized on its strategic location as a hub for both defense and international shipping. However, Norfolk has grown beyond its maritime roots, developing a vibrant food and entertainment scene. The third most populous city in Virginia (behind Virginia Beach and Chesapeake), Norfolk is also a higher education powerhouse, home to Old Dominion University, Norfolk State University, Eastern Virginia Medical School, Tidewater Community College, ECPI University and Tidewater Tech.
Population 242,742
U.S. Department of Defense
(10,000-plus employees)
Sentara Health
(7,500 to 9,999 employees)
Norfolk Public Schools
(7,500 to 9,999 employees)
Norfolk city government
(2,500 to 4,999 employees)
Old Dominion University
(2,500 to 4,999 employees)
Tourist attractions in the Mermaid City include Nauticus maritime museum and the Battleship Wisconsin. Norfolk Botanical Garden, undergoing a $30 million renovation, the largest in its 85-year history, has 60 different gardens and offers a popular holiday lights display. The Chrysler Museum of Art, the Barry Art Museum at ODU and the Glass Light Hotel & Gallery collectively have the largest collection of glass to be viewed for free in the world.
Sheraton Norfolk Waterside Hotel
466 rooms, 42,210 square feet
of meeting space
Norfolk Waterside Marriott
407 rooms, 68,879 square feet
of meeting space
Hilton Norfolk The Main
300 rooms, 60,000 square feet
of meeting space
Norfolk Tides
Minor League Baseball
(Baltimore Orioles affiliate)
Norfolk Admirals
East Coast Hockey League
