Norfolk's Economic Development Agency voted Wednesday to sell the Military Circle Mall to the city for $10, three weeks after City Council passed a resolution in July agreeing to buy the mostly-shuttered site that has seen redevelopment plans fall through in recent years.
If that timeline seems backwards, it did to some members of the authority.
Jeffrey Brooke, the chair, said he learned about the city's plan to acquire the mall shortly before the July vote, something he called "confounding" in an interview. The authority has dealt with the site for a decade, including purchasing the majority of the mall in 2020 for $13.4 million and issuing a development request that resulted in three finalists, none chosen by the city.
The sale, Brooke said, was probably the right outcome. He voted for it. But how it came about raises questions for him about the authority's role moving forward.
"My criticism, and I've voiced this to folks on council who I speak to, is not in the outcome, but in the process," Brooke said before the vote, which passed with one dissent. "I feel like we were asked to do this job, and we've been doing a good job...In my mind, it kind of raises the question of “What do we do? What is our role as an Economic Development Authority?’"
Sean Washington, who serves both as executive director of the EDA, a state agency, and head of the city's department of economic development, said "general leadership as a whole" in the city decided it was time for the transfer. Who? "Multiple people, myself involved," he added after the vote. "We've gotten this thing to the point where it needs to just be in the hands of the city so we can get to a redevelopment."
Before the vote, Washington presented a history of the authority's involvement and reasons for the transfer. While the authority purchased the properties, the city has been the financial backer behind the deals.
Some of the out parcels have been demolished, but the remaining buildings require electricity, security, water, and insurance. California retailer Ross Dress for Less remains a tenant with lease options that run through 2036. Demolition cannot proceed without their consent. Washington said he hasn't spoken to Ross in recent months. Asked whether the company had a price the city was not willing to meet at that time, he replied, "That's a good way to put it."
The authority has been covering expenses for the mall from a $2.5million settlement with Cinemark, a tenant that left in early 2021. That money funded consultants and has paid for ongoing costs like utilities. Washington said a projected deficit over the next year would wipe out much, possibly all, of the $293,000 that remains.
"We wanted to take all those factors into consideration, as it relates to why it makes sense that we move this into what we'll call ‘phase two,’" he told authority members before the vote, noting that the EDA had conveyed other smaller parcels into the city's hands.
Now that the property has been transferred, any final decisions on redevelopment and financing would lie with City Council, Washington told the authority. Asked by a member if the authority could still offer input, Washington suggested putting something in writing that reflects what the authority thinks should happen with the site.
In November, during a retreat, the City Council heard from consultants about the site, showing a "concept" that included an ice complex, recreation center, retail, apartments, townhomes, office space and government space. There has been no movement on that since.
In April, during his State of the City address, Mayor Kenny Alexander said a library and fitness center would anchor a mixed-use development at the site. Norfolk has partnered with Lose Design to do a feasibility analysis leading to a conceptual design. The city's 2026 budget calls for $1 million in design funding in fiscal year 2027 for a Military Circle recreation center on the site.
Norfolk City Council has bypassed the EDA before. The 2021 request for proposals from developers set guidelines for how the authority would evaluate each to make a final selection, including a method to score and rank them by a review committee. But a story in The Virginian-Pilot revealed that the review committee was never formed, and the scoring was never done. Behind closed doors, the City Council voted 8-0 to begin negotiations with a proposed Wellness Circle featuring a 200-room hotel, more than 1,100 housing units, and a 16,000 seat arena by a team that included Virginia Beach natives Pharrell Williams and Pusha T. After months of negotiations, that plan was abandoned.
Washington said shedding Military Circle offers a chance for a realignment of the EDA. "It leaves this body to be able to focus on other strategic initiatives that we want to see come to fruition, and that is something that I would love to actually start to have some conversations with as we get into the rest of this," he told the authority.
The Military Circle property was the last large parcel in control of the EDA. Without it, Brooke said the authority mostly acts as a pass-through for grants. But, he added, it has tools helpful to Norfolk, including the ability to float bonds and acquire property quickly.
Brooke noted that other cities use their authorities more, pointing to Virginia Beach, where the economic development authority has been the driving force behind numerous projects, including the Atlantic Surf Park at the Oceanfront.
"It really is a question of philosophy and viewpoint. I think that we have sort of come out like, ‘Why even have one?’ But we are potentially more nimble. We have done deals on the spur of the moment where the city can only act after notice and they go through a whole vetting process," he said, noting that the EDA purchased Dillard's in MacArthur Mall when the City Council was on recess.
"Do they value our opinion?" Brooke added. "Or do they do whatever the heck they want? Other cities seem to have worked through that better than we have."
