This story was reported and written by our media partner the Virginia Mercury.
Norfolk officials sat down for an interview last week to discuss a sensitive subject: a request by Virginia Beach developer Bruce Thompson to alter the proposed alignment of a floodwall so his firm could move forward with a “transformative” waterfront development of hotels, residences, restaurants and an innovation corridor in concert with Sentara and the Eastern Virginia Medical School.
But City Manager Pat Roberts wanted to first address the weightier issue of how the city viewed its partnership with the U.S Army Corps of Engineers for the $2.66 billion coastal storm risk management plan that could reshape the city’s waterfront with more than eight miles of walls as high as 16.5 feet.
“The Corps has the final say on design,” he said. “We have the final say whether or not we build it. And that’s maybe the simplest I can put it.”
Roberts’ statement and others during an hour-long interview were a public signal that the city has plans to demand significant changes to the plan, the largest infrastructure project in its history, which could increase Norfolk’s share by millions of dollars. Meanwhile, Corps officials say the partnership agreement the city signed last year “codifies” the design in the feasibility study and only allows for changes that don’t significantly increase the cost – unless the city is willing to pay.
Plan background
Norfolk surrendered much of its leverage to negotiate changes to the plan when the City Council approved a partnership agreement that locked in the basics of the feasibility study, including the wall’s proposed alignment through downtown and nearby neighborhoods, and the city’s responsibility for a local share of 35% — roughly $931 million in the current cost estimate. The cost is expected to rise, and the project is likely to take longer than the scheduled ten years.
Under the agreement, the city has review and comment power to request changes, while the Corps has the final word on design. If the city’s requested changes significantly increase the cost, the Corps can label them “betterments” and require the Norfolk to pay the difference, above the 35% local share. Even then, the Corps can refuse to build a betterment.
The city, though, has one final card it can play — refuse to fund its share at any point during the project. If that happens, the Corps can terminate construction unless the assistant secretary for civil works “determines that continuation of such work is in the interest of the United States.”
“Will the federal government come into a community somewhere in the United States and make an investment against the will of the people that live there?’ Roberts asked. “That’s the question. I don’t think so.”
Community concerns
Deputy City Manager Doug Beaver, who took part in the interview, said there are ongoing negotiations with the Corps.
“They have presented us with ideas, designs, (and) schematics that we don’t think are the best for the city of Norfolk to maintain a lively and beautiful waterfront,” he said.
Roberts added the council members, who unanimously approved the partnership agreement on April 25, 2023, have concerns.
“I’ve heard loud and clear from council members that they want to see it designed in a way that does no harm, that we leverage the funding, that we build the project, but we’re not going to destroy the waterfront,” he added.
The comments come after residents in both wealthier and low-income neighborhoods complained that they were not informed about the project’s details, which includes floodwalls, pump stations, a mile-long barrier across the entrance to the Lafayette River and nature-based protections like grasses and oyster reefs.
The plan only protects the city from major storms and a catastrophe like New Orleans experienced with Hurricane Katrina. It will not stop flooding from increasingly high tides and more intense and frequent rainstorms, or improve the city’s antiquated stormwater system. A 2012 study by the Timmons Group identified between $694 million and $782 million in drainage improvements needed in Norfolk over the coming decades, which equates to roughly $1 billion in 2024 dollars.
The Norfolk plan is the first of the Army Corps’ proposed storm risk projects to edge towards construction. New York, Miami, Charleston, and other cities have requested significant design changes to their plans with the Corps, including new feasibility studies in some cases. A $52 billion storm risk proposal for New York and New Jersey was dismissed by state leaders who said the plan only focused on storm surge; the Corps was sent back to the drawing board to create a comprehensive plan that protects against tidal and river flooding, heavy rainfall, groundwater emergence, erosion and sea level rise in addition to storm surge. Miami–Dade County rebuffed a $5 billion plan requested more nature-based solutions and fewer walls after renderings commissioned by the city’s downtown development agency showed 20-foot-high floodwalls blocking waterfront views.
Without the project, a 2019 Corps report estimated that all but a sliver of Norfolk’s interior would be at risk for flooding from a major storm by 2075. With the project, the feasibility study says the city will reap annual net benefits of $122 million from reduced damage to businesses, homes, and critical infrastructure, including healthcare facilities. Norfolk and Corps officials have said repeatedly that only the first portion of Phase 1 from Berkley Bridge to Chesterfield Heights has been designed. But the feasibility study outlines wall alignments and other details to meet the requirement that the benefit-cost ratio be more than one dollar for every dollar spent on the project.
Congress appropriated $400 million to start the project in early 2022. When City Council approved the partnership agreement more than a year later, it also approved a resolution stating that half the local share — roughly $465 million over 10 years — had to be funded by the state. So far, the city has received a $25 million state grant. There is $25 million in the state’s fiscal year 2025 budget, but nothing in the 2026 budget.
City Council, Roberts said, will have a series of votes over the years to decide whether to move forward with the project, fund any betterment, and authorize easements for the wall, utility relocation, and property purchases through eminent domain. It could also require contributions from third parties including Gold Key, the company angling to build a waterfront development. He noted that the city’s agreement with the casino developer requires a $7.5 million payment for the floodwall.
“We want the city share to be as little as possible, but at the same time, if there’s a betterment that makes sense, then the council would consider that,” Roberts said”Council will have likely multiple decisions to make. The big one is, do they appropriate money for that phase? The second big decision, in many cases, will be, does the city acquire real estate?” he added.
Michelle Hamor, chief of policy and planning for the Norfolk district of the Corps, described the comments as a common challenge for local partners.
“The city of Norfolk is nearly fully developed. So how do you, after the fact, now implement measures to secure that way of life that people have expected when they move to a waterfront community, and then also provide that level of risk reduction, risk management that keeps them and their investments more secure than before?” she said.
Hamor and Roberts said they expected future design charrettes in other neighborhoods, including Freemason, where residents have erected yellow poles the height of the proposed walls in protest to the plan.
Funding limits
Kristin Mazur, the program manager for the Corps, said via email that the initial $400 million plus the local share is enough to finish three parts of Phase 1, including the wall from the Berkley Bridge to Town Point Park, but not the stretch from West Ghent to Town Point Park. That includes the Fort Norfolk site Gold Key is considering developing and the proposed wall through the historic Freemason neighborhood.
The Corps has an unfunded backlog of nearly $100 billion in projects. Hamor cautioned that any future appropriations for Norfolk would compete nationally with other requests. Storm risk plans for Virginia Beach,Hampton and Newport News are in the works over the next several years. So are revised studies for New York, Miami, Charleston and other cities.
After residents in Freemason, a neighborhood where condominiums range from $350,000 to more than $500,000, complained about a proposed wall through the city, the Corps held an open house attended by about 175 people at a neighborhood YMCA last month. They were concerned about decreasing property values and waterfront access. Hamor promised the design team would consider their concerns but added a caveat: The congressional act providing funding “codified” the project cost and the wall alignment.
“That’s really important. As we think about moving forward, there’s a limit to what we can do to modify those alignments without exceeding the cost of the project,” she told residents.
Hamor was one of a handful of Corps staffers who attended an all-day design charrette in July to address the wall alignment along a site in Fort Norfolk, a rare undeveloped waterfront plot purchased for $2 million in 1996 by McLeskey, a Virginia Beach company. The Mercury obtained a 20-page draft report of design options and a file of notes labeled “CONFIDENTIAL — DO NOT SHARE OUTSIDE OF THIS TEAM” from the meeting through a public records request.
According to the notes, Thompson, who is McLeskey’s partner, made a presentation offering “a transformative vision for the area, like how the Cavalier transformed a portion of the Oceanfront in Virginia Beach.” Eighteen city staffers and consultants, including department heads, met with Thompson and eight others from Gold Key.
The proposed alignment of the wall, which runs down Front Street and puts luxury condominiums on the water side, would kill the Gold Key development, according to the July meeting notes. The charrette report examines the pros and cons of different wall alignments, including hugging the shoreline, putting it in the river, or a combination. Those likely will increase the cost. Hamor, according to the notes, cautioned that there were limits to changes without the Corps invoking a betterment.
One preferred option runs the wall along the shoreline while the other moves much of it into the water. Both envision a raised public greenspace on the water’s edge of the development with the wall buried inside. A planned September workshop to agree on a final design was postponed until the Army Corps hires consultants for the work.
Kyle Spencer, the city’s chief resilience officer, said because of numerous utility conflicts on Front Street, the cost of those alignments may not be greater and could avoid being considered a betterment. But Hamor, in an interview, said putting the wall in the water raises other issues. It would have to be more robust. There are also water quality and habitat concerns, the fact that the river is a federal navigation channel, and potential conflicts with utilities in the river bottom.
In response to an email seeking an interview, Bryan Cuffee, Gold Key’s vice president of development, said the company was in the exploratory phase to determine project feasibility.
“We are anxious to determine the additional, if any, cost over and above what is appropriated to determine the additional, if any, funding requirements,” he wrote.
Thompson and Gold Key became the focus of a controversy over the development of The Main, a hotel in downtown Norfolk, when The Virginian-Pilot in 2017 reported that the city’s contributions to the project were nearly $103 million, far more than is normal for similar developments.
Roberts and Beaver noted the Corps has negotiated changes to the wall along Lamberts Point docks to accommodate Fairwinds Landing, a marine logistics center to support offshore wind, and the City Council’s concerns about designs for Town Point Park, which are still in development. Spencer has repeatedly said that the Corps has not described those changes as a betterment that would require additional local funds.
But, in an email via a Corps’ spokesman, Mazur said the question remains open. “We cannot make a determination about what is or isn’t a betterment before we have a design,” she added.
With potential changes in the conceptual designs for Freemason, Front Street, Fort Norfolk, Town Point Park, Pretty Lake Avenue, and elsewhere in the works, the City Council will need to decide over the coming years whether to continue funding a plan that protects only against a storm surge the Corps said has a 1.4% chance to occur in any year.
“Our goal is to build the whole project,” Roberts said, “but we have to figure out each phase, one at a time.”
