Willoughby Spit plan hits a roadblock
State could kill a new developer’s revived proposal, use land as part of HRBT project
NORFOLK— An ambitious plan that would have put 300 condos, a marina, a restaurant and shops on Willoughby Spit a decade ago has been revived by a new developer.
Problem is, the new plan may be a goner as quickly as the original one. Just for a different reason.
As originally proposed, The Spectrum at Willoughby Point would have transformed the jut of land at one end of Norfolk formed by a hurricane in the 1700s. But the plan was introduced at the height of the housing bubble, and financing fell through in 2009 — as happened to projects around the country.
Ten years later, a new developer with similar ideas has paid $4 million for the acreage just south of Interstate 64 near the entrance to the Hampton Roads Bridge-Tunnel.
Virginia’s Department of Transportation, however, also has its eyes on the land. It wants the space for construction staging as it readies a multibillion-dollar plan to add a new four-lane tunnel to the HRBT.
And if the momentum to expand the HRBT continues apace, cranes, not condos, are more likely to populate the land.
Land records show Wf Willoughby Spit LLC, a group that includes partners WeldenField and local custom home builder Brian Rowe, bought the two parcels totaling 13.5 acres for $4 million in September from a bank. The land was assessed at $6.3 million this year, having steadily fallen since 2014, when it had been valued at $9.7 million.
Virginia Business first reported the sale and Department of Transportation wrinkle.
Les Griggs with the state transportation department’s right-ofway division said there’s not another piece of land like it. He said what makes it attractive is its size and its location on the waterfront, near barges and very close to where the new tunnel tube will be laid. Griggs said that proximity makes it a safer staging area.
Construction on the $3.3 billion$3.8 billion tunnel addition is expected to begin in 2020.
Right now, the department is waiting for the Federal Highway Administration to approve the state’s environmental plans, an OK they expect any day now, said Griggs. Once that happens, he’ll take the approval back to the project’s team and discuss next steps, including making an offer to buy the land and subsequent negotia- tions.
If the state and WeldenField don’t reach an agreement, the state could seek to take the land by eminent domain, paying either the assessed or appraised value, whichever is larger.
Wells Fargo knew the state might be an interested buyer, but at the time the bank first reached out, it didn’t have the money on hand yet. By the time the project was funded, Wells Fargo had a contract with WeldenField, Griggs confirmed.
Rowe, WeldenField’s Hampton Roads partner, referred questions about the purchase and the project to Grady Palmer, an attorney representing the new property. Asked if this could ultimately turn out to be an easy flip for the group — buying land for $4 million and selling it for more than $6 million — Palmer said the built-out development would have been worth much more.
Plus, the developer group had been in talks with the bank as early as 2012, and Palmer said they reached out to the transportation department about a year ago and said the state told them it didn’t need the land.
“At some point, in the last couple of months, that changed,” Palmer said.
The new owners still hope that the state won’t claim the property, but if Virginia submits an offer, “there’s really nothing left to do,” said Palmer.
Right now, the department is waiting for the Federal Highway Administration to approve the state’s environmental plans, an OK they expect any day now, said Griggs.
Pierceall can be reached by phone at 757-446-2588.