DATE: Wednesday, November 5, 1997           TAG: 9711050751

SECTION: BUSINESS                PAGE: D1   EDITION: FINAL 

SOURCE: BY JON GLASS, STAFF WRITER 

DATELINE: NORFOLK                           LENGTH:   64 lines

NORFOLK TO SPEND $1 MILLION TO AID WATERSIDE FACILTY MARKETING CAMPAIGN TO BE AIMED AT NATIONAL RETAILERS

Hoping to boost the fortunes of the Waterside Festival Marketplace, the City Council voted 5-2 Tuesday to spend nearly $1 million on the financially struggling waterfront attraction.

The money will be used in part on an aggressive marketing campaign to draw national retail tenants and to reposition the aging facility in preparation for the opening in spring 1999 of the MacArthur Center mall.

But the infusion of tax dollars also will help pay operating expenses, maintenance needs and tenant allowances for store improvements, officials said. The city has been criticized for providing subsidies to Waterside, but council members who supported the appropriation said it has returned more tax dollars to the city's coffers than it has drained.

In fiscal 1997, which ended June 30, Waterside generated more than $1.9 million in tax revenue for the city, according to figures compiled by Norfolk's commissioner of the revenue. The council on Tuesday approved spending $994,198 on the facility.

Since opening in 1983, Waterside has generated nearly $20 million in tax revenue, officials said, and is credited with helping to spark the rebirth that has attracted the $300 million mall and other commercial and residential development. Waterside also has created 900 jobs, 30 percent of them held by minorities, according to management officials.

``It has been a tremendous catalyst for economic development, all across the this city,'' Mayor Paul D. Fraim said.

Added Vice Mayor Herbert M. Collins Sr., who has been critical of the attraction: ``We cannot afford to board it up and leave it abandoned. We're just going to have to continue until we get the right mix in there. You just can't walk away from it.''

Fraim said the council needed to act on the funding request Tuesday to ensure that Waterside continued making its debt payments. The money will be funneled through the Norfolk Redevelopment and Housing Authority, which owns the land and shares the risk on the attraction's outstanding debt.

Councilmen W. Randy Wright and Paul R. Riddick voted against the expenditure. Riddick criticized the council's decision to support Waterside while voting earlier in the same meeting to scale back a proposed 3 percent cost-of-living increase for retired city employees to 2 percent.

``Waterside has been a benefit to this city, but it's become more of a burden in recent months,'' Riddick said. ``I'm not prepared to accept the bricks and mortar mentality of this administration . . . and not do something for the human infrastructure.''

Wright said his problem was with the management of the facility.

``Non-producers shouldn't expect to be rewarded for it,'' Wright said. ``In any sound business sense, they have not cut it.''

City staffers say that Waterside is more of a public amenity and tourist destination and that its economic performance should not be compared to a traditional mall. But Darlene Burcham, deputy city manager, said some of the money will be spent on hiring a consultant to help the city find Waterside's niche.

Vann Massey, Waterside's general manager, said his goal is to ``create a more fun place to come,'' and he hopes to do that in part by attracting national tenants. Landing a Hooter's restaurant earlier this year added life and attracted the attention of other big-name businesses, Massey said.

``We believe that Waterside has been a very positive icon for the city and the region and will continue to be important to the region and the quality of life,'' Massey said. KEYWORDS: WATERSIDE FUNDING

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