Waterside needs $350,000 to cover utility bills, taxes

NORFOLK

Waterside needs $350,000 from the city to help pay its water and electric bills and delinquent property taxes.

The downtown entertainment complex, owned by an affiliate of the Norfolk Redevelopment and Housing Authority, needs the money to cover its bills through June. The deficit stems from falling lease revenues at the struggling facility.

“Waterside isn’t going dark,” said John Kownack, assistant executive director of the authority. “We’re not going to go out and not pay the bills. The board just wants to know there’s a commitment from the city.”

But so far, that commitment hasn’t been forthcoming. The authority has been asking the city for money since October, Shurl Montgomery, the agency’s director, said on Monday.

The deficit has been documented in monthly reports shared with Waterside’s managing board, which is comprised of Kownack, Norfolk Assistant City Manager Stanley A. Stein, and Waterside manager Lane Brown. Stein, however, said the city never received a written request for the additional cash.

Waterside’s operating budget has only about $45,000, Montgomery said. And one of its bills is already late.

According to information from the Treasurer’s office, Waterside’s quarterly $27,000 real estate tax bill wasn’t paid in March. So far, a $2,645.60 penalty has been assessed. If the tax bill remains unpaid, interest will begin to accrue starting on May 1.

Housing authority board chairman Sheppard Miller III said Monday he planned to call city officials immediately and request that Norfolk cover the bills.

“They’re distracted,” Miller said of the city officials, who have been working on the upcoming budget. “They’re really not focused on the fact we’re short. But I’m confident they’ll come together.”

City Council members contacted Monday said they did not know about the deficit or the tax penalty.

“I’m surprised to hear that,” Councilman W. Randy Wright said.

“We have had some preliminary conversations about Waterside,” Vice Mayor Anthony L. Burfoot added. “But we didn’t know it’s running a deficit.”

Mayor Paul Fraim said the city will provide the $350,000. Waterside still generates money for the city from the tax revenues it generates, he said.

Once hailed as a catalyst to downtown revitalization, Waterside has struggled in the last year.

The building’s few shops, food court and restaurants have faced increased competition from the rest of the booming downtown.

In recent years, lease revenues haven’t covered the operating costs, and the city has provided $850,000 annually to pay for utilities and the construction debt on the 25-year-old waterfront building.

In the last year, sales have dipped, and some storefronts have gone empty. The shortfall has risen to about $1.2 million, Kownack said.

The slowdown has prompted calls for city leaders to re-examine the use of Waterside. City officials say in upcoming months they plan to study the facility’s future, including whether they should renovate it or tear it down.

Councilman Paul R. Riddick said at last week’s council meeting that it’s time to consider tearing Waterside down. A developer would pay a premium to build on the site, he said.

“It was great in its day,” he said.

Staff writer Harry Minium contributed to this story.

Meghan Hoyer, (757) 446-2293, meghan.hoyer@pilotonline.com