THE VIRGINIAN-PILOT
Copyright (c) 1996, Landmark Communications, Inc.
DATE: Saturday, September 28, 1996 TAG: 9609280229
SECTION: FRONT PAGE: A1 EDITION: FINAL
SOURCE: BY ELIZABETH THIEL AND MYLENE MANGALINDAN, STAFF WRITERS
DATELINE: CHESAPEAKE LENGTH: 107 lines
Drive past the major construction sites in Hampton Roads and chances are you'll see a familiar sign - green-and-white, with the sleekly designed initials A/H.
Armada/Hoffler's name marks many of the region's highest profile projects.
The newly opened Target store in Chesapeake's Greenbrier area. Lynnhaven Mall in Virginia Beach, where renovations are under way. The MacArthur Center shopping mall, about to be constructed in Norfolk.
Over the past 17 years, the Chesapeake firm has grown from a small-time operator to a major competitor. Armada/Hoffler is now the state's largest commercial general contractor, with about $150 million in work each year.
Officials and contractors who work with the company say Armada/Hoffler has built a reputation for delivering projects on time and keeping customers happy.
``Their success is very evident,'' said Robert Smithwick, a former economic development director for Norfolk, where the company has overseen such big projects as the Waterside Marriott Hotel and Convention Center and the addition to the city jail. ``When you're good at what you do, more and more people come to you. With that work, your presence gets to be bigger.''
Smithwick said that success also has made the firm and it's chairman, Daniel A. Hoffler, a ready mark for criticism - from construction industry competitors and political foes.
``Everyone who does things with a good success record gets to be a target,'' Smithwick said.
Hoffler is no stranger to the politics involved with big business.
Hoffler and the company contributed money to Chesapeake City Council candidates in both of the past two elections. Six of the nine sitting council members count the firm and Hoffler among their most generous supporters, voter registrar's records show.
Vice Mayor John W. Butt got $1,500 during his last campaign in 1994. Councilmen Peter P. Duda Jr. and W. Joe Newman each got $1,000 in 1994. Councilman Dwight M. Parker got $500 in his unsuccessful 1994 bid and another $500 during his victorious campaign in May. Elizabeth P. Thornton got $500 last spring.
Mayor William E. Ward got at least $1,000 for his May race.
Since then, questions have arisen in Chesapeake about the extent of Armada/Hoffler's influence, particularly as it concerns two city projects, a new jail and a proposed conference center.
Hoffler said the questions are unfair.
``Do we have influence? Yeah, by virtue of our size,'' he said. ``Whether it's improperly used, that's ridiculous. The inference is ridiculous.''
Armada/Hoffler is the construction manager for the new city jail, whose cost in 1992 was estimated at $21 million but has risen to $38 million. The city has agreed to pay the firm $1.18 million more on what was supposed to be a guaranteed maximum-price contract. Meanwhile, the City Council has approved a detailed audit of cost overruns at the jail.
Armada/Hoffler said the increased costs were due to changes requested by the city.
Also, earlier this month, the City Council, in a divided vote, approved a plan to enter into a lease-purchase agreement with Armada/Hoffler for a $9 million conference center in Chesapeake's Greenbrier section.
The city will spend $1.2 million on the 5.64-acre property that will hold the center - double its current assessed value - should the city buy the site after construction.
Armada/Hoffler was the only company to submit a bid in response to a request by city officials for companies to make proposals on the conference center. Hoffler said his firm offered the city informal advice on putting together the specifications.
The city's request later was advertised on a limited basis.
Council members have said they were not informed of the deal until August, after the deadline for companies to submit bids and after Armada/Hoffler's was the only proposal received.
Councilman John M. de Triquet is one of several who have raised concerns about the process by which the convention center project has come about, and by which Armada/Hoffler has won preliminary approval to build it. There also are concerns about whether the city is getting a fair price.
``My arguments against this originally were based on three issues,'' said de Triquet, one of three council members to vote on an unsuccessful Sept. 24 motion to delay action on the conference center contract.
``Number one, I objected to the citizens being taxed without their consent,'' he said. ``Number two, this project was and is not a priority for the city, especially when we have other urgent needs, such as roads, schools, firefighters. And number three, the financing of the project was not good business on the part of the city.
``If this was such a great idea, we should have been able to prioritize, find money to finance this outright.''
De Triquet said he has asked other city officials to explain why there has been a rush to approve the project. Council members voted just a little over a month after they found out about it. He has not received an answer that satisfies him, he said.
Dwight M. Parker, who approved of the project, said Armada/Hoffler's contribution to his campaign played no part in his decision.
``Based on what I was told from (city economic development director) Don Goldberg about this project, the pluses of it for Chesapeake, and based on all the information I've seen, read, whatever, it's good for the city of Chesapeake,'' Parker said. ``That's the only reason I'm supporting it. And I've seen nothing that would change my mind at this point.''
Thornton said city officials are anxious to get the project under way so they can begin reaping the benefits as soon as possible.
``I realize that it may appear to be rushed,'' Thornton said. ``But I think that what we're trying to do, is that we're trying to get it online so we can get persons into the convention center.''
Hoffler said Friday that he believes those who are questioning the conference center project have political motives.
``The implication has been that we have not played fair in the game, and that's not the case,'' he said. ``I think it is an extremely fair deal for the city. We were independently selected to do this project.''
KEYWORDS: CHESAPEAKE CONVENTION CENTER by CNB