THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Friday, December 23, 1994 TAG: 9412230512
SECTION: BUSINESS PAGE: D1 EDITION: FINAL
SOURCE: BY MIKE KNEPLER, STAFF WRITER
LENGTH: Long : 134 lines
Adding a third upscale hotel and making major improvements to two others could be the next thrust in Norfolk's continuing effort to transform its downtown into a major tourist and convention destination.
City Hall is updating its downtown master plan. The document probably will recommend that a top-rate hotel be built near the proposed MacArthur Center shopping mall, Mayor Paul D. Fraim said.
Other discussions concern the large-scale renovation - or reconstruction - of the Howard Johnson on Monticello Avenue and the redevelopment of the old Thomas Nelson hotel on Granby Street.
``The destination concept of Norfolk continues to grow and materialize. That's what makes the market so viable,'' said Robert B. Smithwick, the city's development director.
Fraim said there are no specific proposals yet for a hotel near MacArthur Center. There also is no timetable except to get the concept into the revised master plan, which will be issued next summer, he said.
However, the city does have a location in mind.
Most likely, it's the site of the SMA Building at 254 Monticello Ave. Norfolk bought the building from a division of Travelers Insurance Co., Fraim said.
Meanwhile, B.F. Saul & Co., which owns the Howard Johnson hotel at 700 Monticello Ave., is looking at ideas for upgrading or rebuilding that property. It would remain in the mid-scale price range.
Also, the city is weighing ideas for another mid-market hotel on downtown Granby Street. The owner of one possible site, where the old Thomas Nelson hotel stands, has held discussions with private buyers.
Downtown Norfolk already has 1,319 guest rooms scattered among the Omni, Marriott, Howard Johnson and Ramada properties. There's another 167 rooms in a nearby Comfort Inn, just outside the central business district.
The downtown market could support another major hotel if it was connected to the MacArthur Center, Fraim said.
The $270 million shopping mall, expected to open in October 1996, would feature at least two upscale department stores, Nordstrom and Macy's. A third anchor is yet to be named.
The mayor said he envisions a hotel that would cater to out-of-towners who come to shop at the upscale mall or attend small conferences.
The city would rely on the Norfolk Waterside Convention Center attached to the Marriott, as well as the Omni Waterside Hotel, for major meetings, the mayor said.
The proposals for renovating the Howard Johnson and redeveloping the Thomas Nelson also are in conceptual stages. But city officials already are involved in discussions with the property owners.
Two or three mid-priced hotels would help ensure that staying downtown isn't overpriced and that there are plenty of rooms available for multiple conferences and events.
The city believes that the 344-room Howard Johnson hotel needs to undergo large-scale renovation or, possibly, be rebuilt for the property to be consistent with other downtown improvements, Smithwick said. The hotel used to be a Holiday Inn until the chain withdrew its name in 1992 after proposed renovations were not carried out.
``If it turns out that the cost of renovations is greater than the property's value, then they should start over from scratch with the site,'' Smithwick said. ``But it's a good site, and in our planning for the future of Scope, Chrysler Hall and the MacArthur Center, we need to keep in mind the valuable aspects of the Howard Johnson site.''
The site has been up for sale for a few years and several potential buyers are looking at it, said Terry O'Leary, assistant vice president of B.F. Saul & Co. in Chevy Chase, Md.
The Saul company, he said, also is considering keeping and renovating the property, O'Leary said.
``We're in the process of evaluation. We expect some determination in six to nine months,'' he said.
The current thinking, though, is that ``it's very unlikely that it will be torn down,'' O'Leary said. ``All the properties we have spoken with believe it would be more effective to remodel it.''
Estimates for remodeling range from $2 million to $4 million, he said.
The issues at the Thomas Nelson are more complex.
The seven-story Nelson is 89 years old. It's part of the downtown historic district. Parking is inadequate.
Representatives of owner Arnold Orleans have discussed ideas with the Norfolk Redevelopment and Housing Authority as well as with potential buyers.
One idea is to package the Thomas Nelson with two contiguous properties - the defunct Colonial Theatre on Tazewell Street and a parking lot on Boush Street. The old theater also is owned by Orleans, who lives in Bethesda, Md. The redevelopment agency owns the parking lot.
Orleans' representatives have proposed that the city or redevelopment authority build a parking garage on the theater and parking lot sites. They also would like Norfolk to commit to landscaping improvements along Granby Street.
The garage would enhance the viability of a new or renovated hotel, said William ``Bill'' Hudgins, vice president of the Harvey Lindsay Commercial Real Estate Co., which is working with Orleans.
The new or rebuilt hotel would be developed as an all-suite or mid-market property, Hudgins said.
If it is rebuilt, the project probably would retain the building's edifice to keep the site architecturally compatible with nearby buildings.
``It's in a very conceptual status,'' Hudgins said. ``That block is so dependent on city leadership in master planning.''
Gov. George F. Allen's proposal this week to kill the downtown campus of Tidewater Community College could curtail efforts to revitalize Granby Street. The campus, which is under construction along Granby Street, was projected to enroll 5,000 students.
If the campus plan is restored and the city commits to building a parking garage and making landscaping improvements, Hudgins said, the combination would make the Thomas Nelson more attractive to investors.
``The discussions are ongoing. But we're not going to get any commitments until those three things come together,'' Hudgins said. ``Then the discussions could be elevated very quickly.'' MEMO: DOWNTOWN NORFOLK HOTEL PROPOSALS
New Upscale Hotel: Site: The SMA Building, 254 Monticello Avenue.
Owner: City of Norfolk
Assessed Values: Land $346,690, building $1,014,710
New or Renovated All-Suite or Mid-Market Hotel
Site: The Thomas Hotel, 245 Granby St.
Owner: Arnold Orleans of Bethsda, Md.
Assessed Values: Land $96,470, building $112,220
New or Renovated Midmarket Hotel
Site: Howard Johnson, 700 Monticello Ave.
Owner: B.F. Saul & Co., Chevy Chase, Md.
Assessed Values: Land $326,990, building $1,908,800
ILLUSTRATION: Color file photo by Paul Aiken, Staff
A view of the site of the proposed MacArthur Center in downtown
Norfolk. The SMA Building eventually could be the site of an
upscale hotel.
Color map
by CNB