Local developers are teaming up with powerhouses like music icon Pharrell Williams and former football star Emmitt Smith to compete for the chance to redevelop Military Circle Mall in Norfolk.
To solicit public feedback, the city’s economic development department released executive summaries from three of the four finalists vying to redevelop the mall, which has been open since 1970, on Friday. The three documents each detail the scope and features of each multi-use development proposal, as well as their estimated economic impact and costs.
The redevelopment process has been ongoing for years, despite the mall being purchased just last May, said Jared Chalk, the city’s development director. He said the city wants to enhance the light rail, increase access to the area and diversify the economy.
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Crossroads Partnership — a group made up of 10 companies, including Virginia Beach’s S.B. Ballard Construction — envisions a mix of retail, offices, a hotel, a park and a 15,000-seat arena, among other facilities. The development would be structured around Military Circle’s current-oval shaped Ring Road, which would be transformed into a bike path. The development would also include offices anchored by Sentara Healthcare, 987 multifamily housing units and a 128-room Hyatt House hotel.
“Cris Carter and I are NFL Hall of Famers, so we know a Hall of Fame team when we see it,” former football star Emmitt Smith said in the proposal, referencing the pair’s investment group, which is involved in the project.
The proposal claims the project would create 3,100 jobs during construction and 1,800 more during operations, as well as generate $1.4 billion in arena net revenue.
Justin Ballard, director of business development for S.B. Ballard, said the arena would act as a centerpiece for the entire development.
“There really isn’t frankly anything of that size and stature in our area,” Ballard said. “And we frankly get passed up in Hampton Roads due to not having something like that available.”
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Norfolk MC Associates, which includes Bruce Thompson’s Gold Key/PHR in Virginia Beach and fellow local developer The Franklin Johnston Group, calls its proposal The Well — a $663 million development centered around a 9-acre lake with an island in the center. Along with more than 477,000 square feet of office space, the site would include a 200-room hotel, 864 housing units and more than 159,000 square feet of retail and entertainment space. Rather than an arena, developers would construct a 5,000-seat amphitheater with lawn seating for 3,000 more concertgoers.
Developers say the project would create 2,200 jobs and generate $17.7 million in annual tax revenue for the city. The project would create 40 acres of green space and use on and offsite solar power to make the site have a net-zero carbon footprint, Thompson said.
“I think it’s about time that someone proves that renewable energy is a viable energy source, and it will work hand in glove with a compelling economic development project,” he said.
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Led by Virginia Beach native Pharrell Williams, the last proposal comes from Wellness Circle LLC, which also includes Virginia Beach developers Armada Hoffler and Venture Realty Group and national concert promoter Live Nation. Like Crossroads, the $1.1 billion Wellness Circle proposal structures new development around Ring Road, turning the roadway into a walking path and green space. A 15,400- to 16,500-seat arena would be joined by including 1 million square feet of office space including medical facilities, and a 200-room hotel. For housing, the development would include 708 multifamily units, 147 townhome units and 288 affordable housing units.
Additionally, the site would be the home of at least one location of the YELLOW School — a private school supported by Williams’ nonprofit of the same name. Previously, Williams announced that YELLOW would be opening a private school called Yellowhab for low income families in Norfolk’s Ghent neighborhood.
“We want this project to be the heartbeat of the 757. If they didn’t hear us before, they will hear us now. It’s the reason why we brought a very deep bench to the project. They are the best at what they do,” Williams said in an email through a representative. “Norfolk, let’s do this!”
The fourth finalist, a group of 14 companies called Norfolk Next, did not submit a proposal. Chalk said the group didn’t explain why.
A look at the financial strategies
Crossroads Partnership plans to finance the project privately through tax-exempt bonds and Opportunity Zone tax benefits. A portion of funds from tax increment financing and the tourism investment district would go to meeting underwriting requirements.
The Well would be paid for through a public-private partnership, combining private investment and financing with the use of tax-exempt bonds issued by a community development authority, along with the creation of a special service district, with 75% of generated tax revenue committed to service $187 million in bonds.
Williams’ proposal would include private investment of around $853 million funded by institutional lending and other federal programs, and public investment of approximately $332 million, which would be funded by project revenues and private bonds issued through a community development authority.
Norfolk officials have discussed redeveloping Military Circle for years as major department stores like Sears and JCPenney closed their doors as companies like Amazon grew online shopping. The city bought the former JCPenney location and turned it into offices for Sentara and Optima Health beginning in 2014. Norfolk’s economic development department bought the rest of the mall in 2020, moving the redevelopment process forward.
During the next phase of the process, the economic development department will create both an online forum and a survey for community members to comment on the three proposals. For more info, visit norfolkdevelopment.com/military-circle-mall-redevelopment/.
Trevor Metcalfe, 757-222-5345, trevor.metcalfe@insidebiz.com
Elizabeth Moore, 757-247-4517, elizabeth.moore@virginiamedia.com
