VB to build up Town Center

VIRGINIA BEACH, Va. - With an $81 million budget shortfall, the biggest in the city's history, Virginia Beach City Officials say they plan to build up Town Center; costing tax payers millions.

Times are tough in Virginia Beach. Like many cities across the nation, the economic crisis is hitting city officials hard. The current housing market and a decline in auto sales are just a few reasons cited.

"The economic climate right now requires more investment to ensure continuation of economic growth in Virginia Beach," said Finance Director Patricia Phillips.

That's where officials say the expanding of Town Center comes in to play. The project, which began eight years ago, is now ready for phase four. A phase that will cost $214-million.

"We know that it's going to generate more jobs that pay better salaries," said Virginia Beach Mayor Meyera Oberndorf.

Tuesday night, the city unveiled plans for the next phase, which includes two major projects: a 20 story office tower to stand on the site of the old Virginian Pilot Beacon Office, and on the land next the Cosmopolitan,  a new 162-room hotel. The plans also call for more apartments and retail shops.

"I think the success of Town Center speaks for itself," added Oberndorf.

City Officials say phase four will cost taxpayers $56 million. The developer will foot the rest of the bill. That has some city council members concerned.

"With today's global financial crisis, I'm just a little uneasy that we're going to get involved with a project that for every $2.80 a developer puts in, we're putting in a dollar of tax payer money," said Councilman Bill DeSteph.

In past years, taxes from Town Center hotels went into the city's general spending fund. Next year, an estimated $500,000 will go into paying off Town Center debt. Some city leaders say the bottom line is: You have to spend money to make money.

The city will vote on phase four December 9. It will take two years for the work to be completed.