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Roanoke developer pivots from office space to downtown park

Sometimes the best decision a builder can make is not to build.

That’s the conclusion Lucas Thornton, managing partner at Hist:Re Partners in Roanoke, recently reached, although his plans for an office building may happen in the future.

Thornton’s downtown mixed-use development, The Bower, was set to open by late June with 90 one- and two-bedroom apartments atop first-floor retail space at 17 Campbell Ave. SW, the site of the former Campbell Court bus terminal. But he’s put the second phase — an 82,600-square-foot office building on Salem Avenue Southwest — on hold. Instead, Thornton intends to construct a $500,000 park where the office building would have gone. It should be ready later this summer, he says.

“The reality is that COVID has cast a long shadow over the office market. Multitenant office buildings now are difficult” to market, Thornton says, but demand for residential and retail remains solid. About 30% of the apartments in his $25 million project are pre-leased. He also has retail tenants lined up for three out of four spaces, though Thornton says he’s not ready to make those plans public.

As in the rest of the state, the office space market in Roanoke remains uncertain. In its 2023 annual survey, Poe & Cronk Real Estate Group estimated downtown Roanoke’s office occupancy rate at 86%, down a couple points from 2022 and below an ideal rate of 90%.

Poe & Cronk President Matt Huff has seen Roanoke’s occupancy numbers as low as 80% and as high as 94%.

“I think [Thornton] looked at the economic landscape and correctly decided it’s probably not the time,” Huff says, but both are confident offices have a future.

“As corporate America sort of settles on its priorities,” Thornton says, “a site like ours we believe will be very attractive because more traditional formats and footprints might not work as well.”

Making room for The Bower required the demolition of the Campbell Court Transportation Center, which Valley Metro, the Roanoke Valley’s public transportation provider, had operated out of since 1987. Third Street Station, an open-air bus station, opened in June 2023 and serves as Valley Metro’s central transfer hub.

Thornton hopes The Bower’s park will give Roanokers and visitors another place to spend time. “I can imagine everything from an ice rink in the winter … to concerts in the summer.”  

Artspace plans Roanoke artist housing community

Roanoke developer Ed Walker first tried to lure Artspace, a Minnesota-based ​​nonprofit real estate developer for the arts, to Roanoke for an early 2000s redevelopment project, but Artspace essentially ghosted him.

“It’s very, very, very, very difficult to get Artspace’s attention and to get them interested in a community,” Walker says. “It’s like trying to date somebody that just isn’t interested.”

Artspace sure seems to be swiping right on Roanoke these days, however.

On April 18, Walker held a celebration marking the first anniversary of his Riverdale mixed-use development, where, as part of an agreement with Roanoke’s city government, he plans to invest $50 million through 2040 to redevelop the 120-acre former industrial site into residences, offices, retail outlets and eateries.

Appearing at the event were Artspace representatives who had been exploring bringing a residential community for artists to Riverdale, with up to 44 private studio spaces and up to 67 live/work housing units for artists who make up to 80% of the area median income, which is $48,350 for a one-person household. Shared areas, like gallery space, a clay studio and rehearsal spaces, could also be included.

“This potentially could be our very first actual brick-and-mortar project in Virginia,” says Kelli Miles, an Artspace project manager.

Monthly rents would range from $480 for an efficiency to $617 for a two-bedroom apartment, according to Artspace Senior Vice President Wendy Holmes — “so, very affordable for [the Roanoke] market.” Artspace, which will own the property, will likely hire a local property management company to oversee it.

Next, Artspace will identify sources for about $800,000 in pre-development funding for the project, which could cost $12 million to $20 million, coming from a mix of public and private funding, Holmes says. The earliest construction could begin is 2026.

Founded in 1979, Artspace has developed 58 affordable housing and creative spaces for artists in 22 states.

Since last summer, Artspace representatives have held meetings with Roanoke-area cultural leaders, city officials and business leaders, including executives from Carilion and Virginia Tech, to talk about the project and potential financing.

“Ed is true to his word,” Holmes says. “He knows how to bring all these people together.”

Making sure artists can afford housing is a way to keep them in the community, according to Douglas Jackson, Roanoke’s arts and culture coordinator. “I think it is economic development,” he says. 

Wise County tech park is growing

Progress continues on the Wise County Industrial Development Authority’s 200-acre Elam Farm industrial site in Wise County, which will expand an existing technology park. With help from various sources, including a total of $1 million from the Virginia Coalfield Economic Development Authority, the project so far has received $4.8 million in investments, with plans to add future manufacturing and data centers.

Brian Falin, the IDA’s executive director, says the project dates back to 2013 when the IDA acquired the property, but development didn’t begin until 2019.

“We started taking a hard look at bringing this property up to the standard that the rest of the Lonesome Pine [Regional] Business and Technology Park is,” he says. Existing tenants include Foundever, DP Facilities’ Mineral Gap Data Center, and Ronald Blue Trust.

Jonathan Belcher, VCEDA’s executive director, says as the technology park evolved, attracting new tenants, the need for expansion was clear, and the adjacent Elam Farm was the logical choice.

By the time it’s developed, he says, the property will have a 65-acre industrial site ready to be marketed.

The project’s development encompasses multiple phases. The first phase focuses on fundamental groundwork and includes developing an access road and extending utilities like water, sewer and natural gas. Construction began in December 2023 and is on track for completion by September, Falin says.

The VCEDA funding — a $700,000 grant for Phase 1 and a $300,000 loan for Phase 2 — is coupled with a $1.8 million grant from Virginia Energy’s Abandoned Mine Land Economic Revitalization Program to pay for the first phase.

The second phase, bolstered by additional funding from other sources, will include earthwork, site clearing and grading, and Falin says it’s pivotal in delineating a 65-acre plot primed for development. Construction was slated to begin in May, targeting a December completion.

The property was a surface mining site in the early 1990s, Falin says, and over the years has transitioned into agricultural use.

Belcher says Southwest Virginia’s mountainous topography creates challenges for site development.

“Having that 65-acre site will be of tremendous value as we try to attract prospects that need a larger footprint like that,” he says. “We’re pretty well-situated as far as greenfield sites for companies that might need a smaller amount of acreage, but having a larger acreage is something we have less often.”   

Atlantic Park expected to open in spring 2025

The $350 million Atlantic Park project backed by music icon Pharrell Williams in his hometown of Virginia Beach is progressing, with the 2.6-acre surf lagoon, entertainment venue and other pieces of the project expected to be delivered in spring 2025, Kathy Warren, Virginia Beach’s planning director, told the city council Tuesday.

Atlantic Park, a joint project between Williams and Venture Realty Group, backed with about $153 million of public funding, broke ground in March 2023. The rest of the funding is privately raised. The development is between 18th and 20th streets at the Virginia Beach Oceanfront, adjacent to the ViBe district.

It will have 300 apartments, 106,000 square feet of retail and restaurant space, 10,000 square feet of office space, 20 surf bungalows, a 3,500-person amphitheater (that can expand to 5,000), two parking garages with nearly 1,500 spots, the surf lagoon and a half mile of upgraded public streets, according to Warren.

“This is going to be a game changer for the city,” City Council Member Barbara Henley said in the meeting. “It’s going to be an entirely different thing in that part of the city than we have ever had before.”

The surf lagoon will feature wave-making technology from Wavegarden, an engineering company based in northern Spain, and will generate about 1,000 waves per hour. It’s about 47% complete, according to Warren’s presentation, and 24% of its budget has been expended. It is expected to open in spring 2025.

The entertainment venue at Atlantic Park will hold up to 5,000 people. Photo courtesy Virginia Beach

The two parking garages, which will have 1,475 spaces, are about 71% complete and will also open in spring 2025. These will be owned by the city, getting built at a cost of $47.7 million. Off-site infrastructure is about 56% complete, the entertainment venue is 29% complete and the mixed-use component is 20% complete.

The entertainment venue, called The Dome, in recognition of the original use for the site, can seat 3,500 people inside and expand to hold another 1,500 people outside. The venue will be owned by the city and costs about $54.8 million. The first concert will be in spring 2025.

The entertainment venue’s name harks back to the property’s roots as the site of The Dome, a geodesic dome concert venue and civic center that was demolished in 1994. Acts such as The Rolling Stones, Ray Charles and The Monkees were among the musicians that rocked the house in The Dome’s heyday.

OVG360 — a venue management and hospitality division of Los Angeles-based global sports and entertainment company Oak View Group — and Live Nation will operate and manage programming for the entertainment venue.

The off-site infrastructure, which is 56% complete, will be done in fall 2025. The mixed-use residential will open from spring to fall 2025, and mixed-use retail will open from spring to summer 2025. This part is 20% done.

The public-private partnership is also funded by private investment, including the sale of Atlantic Park Community Development Authority (CDA) Revenue Bonds and Virginia Small Business Financing Authority (VSBFA) Sports and Entertainment Facilities Revenue Bonds. The Atlantic Park CDA is the first community development authority in Virginia Beach and relies on project tax revenues to provide support for the project’s infrastructure. The VSBFA bonds will finance the surf lagoon, which will be owned by P3 VB Holdings, a nonprofit that will contribute excess revenues from the surf park to community organizations.

Along with Venture Realty and Williams, the project is being developed by the Virginia Beach Development Authority, Newport News-based W.M. Jordan, Virginia Beach-based Bishard Development and Virginia Beach-based Priority Title & Escrow/Virginia Beach-based H2O Investments.

The Lake takes shape in Chesterfield

The first wave of commercial tenants is coming to The Lake, a long-planned, 105-acre mixed-use development that’s slated to bring a surf park to western Chesterfield County.

The Lake’s centerpiece will be a 13-acre artificial lake with a tow cable. It’s expected to be ready by summer 2025 for wakeboarding, kayaking, standup paddle boarding and other activities. It’ll be followed by an adjoining 6-acre surf park, one of a handful of such facilities nationwide that can generate waves large enough to surf.

“The anchor for our overall development is entertainment,” says project developer Brett Burkhart, founder of Lake Adventures and Flatwater Ventures. “We wanted to have restaurants and an amphitheater, and around that have some cool activities like surfing and wakeboarding on the lake.”

Burkhart lined up $323 million in financing for the development. Construction began in 2022 and is expected to take around five years to complete. Construction costs have increased, he says, though he declines to give a revised estimate.

In January, construction began on three buildings at The Lake’s entrance off Genito Road near State Route 288. A Chipotle and a Starbucks with a drive-thru will be the first tenants. The development’s initial phase also includes three retail and restaurant buildings by the lake. A Kilwins candy and ice cream shop has leased space in one.

Work should be completed by this fall, Burkhart says.

The Lake is also slated to include 150,000 square feet of retail and entertainment space, 100,000 square feet of office space, a 170-room hotel, an amphitheater, 830 apartments and 360 townhomes.

Chesterfield’s primary interest in the project is its commercial component, which is expected to help retain visitors to the county’s nearby River City Sportsplex who might otherwise head to Richmond for hotels, restaurants and shopping, says H. Garrett Hart III, the county’s economic development director. He also hopes The Lake will attract talent for businesses to Chesterfield.

Supervisors approved an agreement in 2022 to provide Lake Adventures with local tax rebates of up to 80% over the next 20 years for the development’s mixed-use and commercial portions. The funds will help defray the cost of building a parking deck instead of surface parking, leaving more space for commercial offerings.

“That’s the benefit of tourism, keeping those dollars in Chesterfield to be able to put back into our own infrastructure,” says J.C. Poma, Chesterfield’s executive director of sports, visitation and entertainment.  

Bruce Smith teams with Cordish on Petersburg casino plan

Virginia Beach developer and NFL Hall of Famer Bruce Smith is vying for the chance to develop a casino in Petersburg and has joined forces with Cordish Cos., the Baltimore-based entertainment company that has already made inroads in Virginia.

There’s just one obstacle facing Smith and other prospective developers, including Bally’s, Penn Entertainment, Rush Street Gaming and D.C.-based Warrenton Group: a piece of legislation awaiting action by the Virginia General Assembly. Virginia State Senate Bill 628 replaces Richmond with Petersburg in the state’s list of cities eligible to host a casino, clearing the way for a casino referendum to be held in Petersburg.

However, the House of Delegates added a reenactment clause to the bill’s wording at the last minute, which would require next year’s General Assembly to take up the bill and vote for it a second time before Petersburg can move forward with a referendum vote — a move that would delay the development of a casino there by at least a year.

Gov. Glenn Youngkin removed the reenactment clause and sent the bill back to the legislature, which will vote on his amended bills April 17. If the General Assembly leaves the bill as-is, Petersburg will likely hold a referendum this fall — and that’s what Smith hopes will happen. He says Petersburg is ready and needs the economic benefit of a casino sooner rather than later.

“Now’s not the time to play politics with the people of Petersburg,” Smith said this week in an interview with Virginia Business, directing his remarks toward House Speaker Don Scott. “They need this economic development opportunity — more so than any other city in the state of Virginia. This is a critical time. That is costing the city money [and] jobs, trying to alleviate the problems of food deserts [and] underfunded schools. We can’t allow folks to say one thing and do another. The time to act is now, and all we’re asking for is to … take the reenactment clause right out of the bill.”

The former defensive end for the Buffalo Bills and Virginia Tech Hokies plans to unveil details of his and Cordish’s casino proposal Sunday at the Petersburg Public Library. The proposed casino will be similar to a $1.4 billion development submitted in 2022 by Cordish and approved by Petersburg City Council in a nonbinding agreement — which became null and void because Petersburg did not receive legislative support to hold a casino referendum that year. Smith, who collaborated with Cordish on a failed Richmond casino proposal in 2021 but was not part of the 2022 Petersburg bid, said the new proposal is “similar, with some tweaks.”

While he will disclose more details Sunday, Smith said “the structure of the deal in itself” will be different. “I will discuss those details on Sunday at the town hall, and they will be groundbreaking — and I think it will be breaking news.” Smith said he became interested in working in Petersburg after a visit with other NFL all-stars a few years ago to a local school and seeing room for economic improvement.

As in the 2022 proposal, the Cordish resort would be built on 90 acres at the intersection of Wagner Road and Interstate 95, and the casino would be “just one component in this massive development,” Smith said, including a 3,000-seat theater among residential, office and retail buildings on the site. He says his team expects to create 7,500 jobs total, including construction jobs, and produce about $2.8 billion in economic impact for the city over the casino’s first 10 years in operation, according to a CNBC interview he gave about the venture this week.

Smith says that his status as a born-and-bred Virginian — having grown up in Norfolk, graduated from Virginia Tech and moved to Virginia Beach to start his real estate business — is a major point in his favor.

Bruce Smith Enterprises, based in Virginia Beach, has previously developed hotels in Washington, D.C., and Virginia Beach in partnership with Armada Hoffler, and Smith is involved in projects slated for Virginia Beach’s Rudee Loop and a 287-unit apartment complex in Norfolk.

He also says that his development team would focus on making sure there is robust local participation in the project, noting that in some majority Black cities that host casinos, participation from investors of color is minimal. “Historically, when opportunities for major developments have taken place, Virginians have either been shut out, or given such a small percentage, even in areas that are disenfranchised,” he said. Petersburg’s population is about 77% African American, Smith notes.

“First and foremost, this is about the citizens and the city of Petersburg, a city that has been ignored and disenfranchised for three generations, to be quite honest,” Smith said. “A city with historically high unemployment, poverty, food deserts [and] underfunded schools, just to name a few problems. This city needs this economic engine more than any other city. It’s time to put Virginians first.”

Meanwhile, the Smith-Cordish plan is not the only one under consideration; four other prospective developers have applied for consideration:

  • Bally’s is a major national player in the casino industry and has previously vied for the Danville casino (which Caesars Entertainment ultimately won), but according to news reports, the company also is struggling to raise capital for a new resort in Chicago;
  • Rush Street Gaming is the Chicago-based company that operates the Portsmouth Rivers Casino, the first permanent casino to open in Virginia;
  • Penn National Gaming is based in Hollywood, and its focus is on “community casinos,” as opposed to those based in Las Vegas and Atlantic City;
  • The Warrenton Group is a Washington, D.C.-based business developer that has an agreement with casino operator Delaware North, but the Warrenton Group itself is a new entrant to the casino industry.
Rendering of a proposed Petersburg casino from 2022 that is expected to be similar to the 2024 proposal. Image courtesy The Cordish Cos.

Cordish pitched a $600 million hotel and resort casino in 2021 in Richmond’s North Side that would have featured a live music hall, but ultimately a plan proposed by Urban One on the city’s South Side won approval from the city. Cordish also sued the City of Norfolk in 2021 for $100 million alleging the city government breached its contract with the company, in which Cordish said it agreed to develop the Waterside District in exchange for the exclusive right to develop and operate a casino in Norfolk — although at the time casinos were not yet legalized in Virginia.

Instead, Norfolk reached a deal with the Pamunkey Indian Tribe to develop the HeadWaters Resort & Casino with Tennessee billionaire investor Jon Yarbrough. Cordish’s lawsuit was dismissed by a Norfolk circuit court in 2022, and the state Court of Appeals upheld the lower court’s decision last month, but there is still a possibility that another entity will take control of the long-delayed HeadWaters project.

According to an April 4 Virginian-Pilot story, Norfolk city leaders are considering the possibility of partnering with a developer other than the tribe and Yarbrough. Under the casino referendum passed by city voters in 2020, the development team is required to obtain a gaming license within five years, or by November 2025. To do so, developers needed to begin construction of the permanent casino by this spring, a casino spokesperson said previously. Smith said it’s possible that he and Cordish would enter the running if the city opens the field to other casino developers.

“If there’s an opportunity that exists in Norfolk, in my hometown, after we take care of Petersburg, we will certainly address that opportunity if it arises,” Smith said, while noting, “first and foremost, our focus is on Petersburg.”

HHHunt starts work on 2,200-home development in Midlothian

Construction has started on a new master-planned community in Chesterfield County’s Midlothian area that will bring hundreds of single-family homes, town houses, apartments and commercial space.

Glen Allen-based developer HHHunt and real estate investment firm GrayCo are developing The Aire at Westchester. The 334-acre tract is at Route 288 and Midlothian Turnpike on the western edge of the Westchester Commons shopping district.

GrayCo is the landowner and HHHunt is the managing partner for the master-planned community, which has been in the works for years. Construction is underway on the first phase of the project, which will include 196 condos and 204 town houses, said Jonathan Ridout, vice president of real estate development and general manager of HHHunt Communities. The commercial areas are in the preliminary design phase, and HHHunt is working on deals with commercial retailers.

Site development could take 12 to 18 months and vertical construction would start in about 18 months. The town houses and condos could be ready in about two years, Ridout says. The commercial space could come online independently, he said, with around 180,000 square feet of commercial space, including office space and restaurants. There is a lot of flexibility in the zoning, he said, to adapt plans to market conditions.

A greenway will bisect the different parcels of land, and the development will include parks and trails.

In total, the development is expected to have about 2,200 residences, including 330 single-family homes on the back portion of the property, but the timing on that piece of the project is flexible, Ridout said.

“We want to create something that resembles a lifestyle center,” he said.
The zoning also allows a hotel, and there’s a possibility for 50,000 to 60,000 square feet of office space.
“Midlothian is one of the most desirable parts of Chesterfield County,” Ridout said. “This becomes a real hub where you can have higher density, different uses, people — it can be an attractive project.”
The project has been in planning for years, with GrayCo hiring David Smith of Cushman & Wakefield | Thalhimer to identify a development partner. Smith started working with GrayCo in October 2017, HHHunt came on in about 2020, and the land was rezoned in 2021.

JLL: NoVa is still nation’s top data center market

Northern Virginia remains the country’s largest data center market, according to a report released Monday by real estate company JLL.

The 581 megawatts of capacity leased by energized — or built-out — data centers in Northern Virginia for 2023 represented a new record, according to the JLL report. Data centers leased 184 MW in capacity in energized buildings in Northern Virginia for the first half of 2023, and 397 MW in energized buildings during the second half of the year. (Data center leases are measured primarily by critical power supply, the electrical load devoted to a data center’s IT infrastructure such as data servers, communications switches and routers.)

By comparison, the primary North American data center markets saw 4.3 gigawatts of transactions in 2023, according to JLL report. Secondary markets added 554 megawatts for the year.

It’s the fourth straight year Northern Virginia has experienced record demand, according to the report, and secondary markets saw significant declines in their share of overall data center demand as a result.

The total inventory of gross square feet dedicated to data centers in Northern Virginia is about 51 million square feet, the report states, with about 167,000 square feet vacant and 13.4 million square feet under construction. An additional 58.6 million square feet of data center development is planned in Northern Virginia. The primary Virginia localities measured by the report were Loudoun and Prince William counties. 

In 2023, the region led the nation in data center leasing activity, with 1.6 gigawatts of transaction volume, including anticipated deliveries in the next few years, according to the North American Data Center Report. 

For all of North America, data center transaction volume in single-asset and portfolio sales was up to $4.6 billion for 2023, up from $2.8 billion in 2022, a 67% increase, according to the report. Figures for Northern Virginia were not available.

The power used by data centers in Virginia doubled between 2018 and 2022, according to Richmond-based utility Dominion Energy. That capacity is expected to double again statewide by 2028, based on customer orders, according to the report. Vacancy is below 2% and cloud computing makes up 82% of the demand in Northern Virginia. Behind that, other technology makes up for about 15% of the demand. Raw numbers by industry were not available.

According to the JLL report, there is a lack of available data center leasing options offering more than 1 megawatt. To address current constraints and meet future demand, Dominion Energy has two transmission lines under construction in Northern Virginia to serve the data center market. 

More than 70% of the world’s internet traffic comes through Data Center Alley, six square miles in Loudoun County’s Ashburn area, and in 2022, Northern Virginia accounted for 64% of the total new data center capacity brought online in primary markets across the U.S., according to the North American Data Center Trends Report by CBRE.

However, data centers have become a point of contention in Northern Virginia, particularly in Prince William County. Supervisors voted late last year to approve the Prince William Digital Gateway, a 2,100-acre, 23 million-square-foot campus that is expected to be the world’s largest data center facility, with an expected $500 million in local annual tax revenue when finished. The vote came after a 27-hour public meeting filled with residents opposing and supporting the project, and state lawmakers are pushing for more oversight of local data center decisions.

But localities in Central Virginia and points east and west are also courting data centers, and in January 2023, Amazon Web Services announced it would invest $35 billion by 2040 to establish multiple data center campuses across the commonwealth. There’s growing interest in areas outside Northern Virginia due to lower land prices and more available property, officials say.

 

$550 million development planned for Pittsylvania’s Axton area

Plans for a $550 million mixed-use development in Pittsylvania County’s Axton area include a five-story, 150-room hotel and a 180,000-square-foot shopping center anchored by a grocery store, but it’s the project’s housing component that most interests the county’s economic development director, Matthew Rowe.

“First and foremost,” he says, “it is addressing a major need … for all types of housing in our area.”

Rowe anticipates that the entire Southern Virginia region will see an influx of workers as the Caesars Virginia resort casino makes additional hires before the casino’s planned opening late this year. Meanwhile, Pittsylvania’s Southern Virginia Megasite at Berry Hill is in contention for a lithium-ion battery manufacturing facility that could create another 1,500 jobs.

Plans for the 580-acre development, which does not yet have a name, call for about 1,800 housing units — roughly 1,500 townhouses and single-family homes and 300 apartments — plus two senior living facilities. One will be an independent care campus with 100 units and the other will be an assisted living memory care facility.

The project is being developed by Southside Investing, a limited liability company created for the project with Tony Salah, Todd Curtis, Dale Harris and Tom Gallagher as principals. Three of the four partners have ties to the region. Salah’s family has been in the Pittsylvania County area since the 1760s, and Curtis and Harris, who are also from the area, originally bought 342 acres of the Axton project in April 2022 for hunting and fishing, Salah says. Later, the team bought the remaining 237 acres. The partners became interested after learning about the 4,300 direct jobs and $1.25 billion in economic development investment the Danville region has attracted since 2018.

“We had some jaws-open moments where we’re learning about what is already in Danville and the region and what is potentially coming,” Salah says.

Says Rowe: “We made them disciples and believers.”

Southside Investing gained the necessary rezoning approvals for the project in August 2023 and is conducting pre-construction engineering. Construction could begin in the next 12 months, Salah says.

Developers say the order and speed of delivering the project’s components will depend on the market, but anticipate that the apartments will come first, followed by the rest in phases that could take 10 years to complete. 

Associate Editor Robyn Sidersky contributed to this story.

Developers put Fort Monroe marina redevelopment on indefinite hold

The redevelopment of Old Point Comfort Marina at Fort Monroe has been put on hold due to rising costs, with no timeline specified for when it could occur.

Instead of negotiating a long-term development agreement, the Fort Monroe Authority (FMA) and Smithfield-based hospitality management company Pack Brothers Hospitality (PBH) are now discussing a revised management agreement, the authority announced this week. PBH had been planning to invest $45 million to build a marina, renovate two existing historic buildings into conference space and a restaurant and hotel over the water, akin to its Smithfield Station development, in a development called 37 North at Fort Monroe.

The FMA’s long-term goal is to redevelop the marina, but rising construction costs and high-interest rates “have impacted the financial feasibility for PBH” to lead the renovation and reconstruction of the marina and portions of new construction for the restaurant, according to a news release. The marina can currently accommodate more than 300 boats that are up to 50 feet in length.

“The FMA does not have a timeline for the redevelopment of the marina,” FMA Executive Director Glenn Oder said in a statement to Virginia Business. “Our goal is to ensure the marina remains operational and the tenants as well as the public experience no change in the operating status of the marina.”

The original redevelopment plan was to start construction in fall 2024, with the marina and restaurant opening in fall 2025. The proposed hotel and conference center were planned to be completed 12 to 18 months later.

PBH is currently managing the marina under the terms of a revised letter agreement effective Dec. 29, 2023. The two parties have begun working on the terms of a longer-term marina management agreement that they aim to complete by Feb. 29, which would be “an annual arrangement that allows the management of the marina to continue while also still being nimble for future opportunities,” according to Oder.

“PBH looks forward to continuing its relationship with the Fort Monroe Authority and welcomes the opportunity to advance the initiatives of the FMA through this marina management agreement,” Randy Pack, PBH president and managing partner, said in a statement.

Leaseholders of the marina, including the Deadrise restaurant, are unaffected by the announcement, according to a news release.

The FMA oversees Fort Monroe, a national historic landmark in Hampton. The authority has more than $100 million in projected investment in the next two to five years, including public and private investment in preservation, renovation and utility projects.