(Everyone should contact this reporters and warn her that Semblers back in town Reach Meghan Hoyer at (757) 446-2293 or meghan.hoyer@pilotonline)
Out-of-area developers taking an interest in Portsmouth
Betsy Cartier, right, runs a coffee kiosk on the Portsmouth waterfront. The revitalized downtown is drawing attention, including out-of-area development proposals. JOHN H. SHEALLY II/THE VIRGINIAN-PILOT
By MEGHAN HOYER AND BATTINTO BATTS JR., The Virginian-Pilot
© March 30, 2006
PORTSMOUTH - In a booming real estate market, this city may have finally arrived.
Portsmouth is starting to see something it never has before - interest from outside developers.
When the city receives proposals Friday for a Midtown shopping center, two of the four bids will come from companies out of state. Next week, the city will begin weighing three out-of-area proposals to build a skyscraper on the downtown waterfront.
All of this marks a major change for a city that has had trouble in the past getting even local developers' attention.
Local: Kaine talks up his road plan
World: Jill Carroll's Sister Makes Plea
More Videos / Submit Yours
See the complete Pilot, exactly as in print
- View stories, photos and ads
- E-mail clippings
- Print copies
Log in or learn more
"This is very different for Portsmouth," said David H. Downs, a professor of real estate at Virginia Commonwealth University in Richmond who advised the city in drawing up the bid requirements.
"But Portsmouth is also very, very well positioned to be attracting interest. The market is at a place where it recognizes and is willing to value the assets Portsmouth has - and that's a wonderful waterfront with great potential."
As Norfolk's downtown skyline and streetscape have changed in recent years, Portsmouth's have stayed fairly static. However, with Norfolk running out of developable downtown land - and with property prices there increasing quickly - Portsmouth also should draw more attention, economic development director Steven Lynch said.
"We are in a little bit of a race to catch up," he said, "but it puts us in a wonderful position. People who saw the amazing success there are very easily turning and looking across the water.
"We are Norfolk a few years ago. It's almost like it's our turn."
Portsmouth is looking to tackle two major projects on city-owned land.
The first is a downtown tower at least 20 stories high on 2.4 waterfront acres between City Hall and Ocean Marine Yacht Center, along with an office-residential building on 2.5 vacant acres across the street. The second project is a shopping complex on the former site of I.C. Norcom High School along Frederick Boulevard, with additional stores and restaurants on property across from the new Wal-Mart Supercenter.
The city hopes the separate projects will transform Midtown into a retail hub and draw new residents and commerce to downtown.
The downtown tower has drawn the interest of developers based around New York and Washington. Only one - Roseland Property Co. of New Jersey, which also has a satellite office in Portsmouth - has done a project in the city before.
It was that project - The Myrtles at Olde Towne apartment complex - that marked a turning point for Portsmouth in terms of outside interest, Lynch said. In the year since the Myrtles opened, the city has seen interest from outside developers skyrocket, he said.
"Developers watch what other developers do," he said. "These developers out of the region are looking and seeing there is something here."
An official with Republic Property Trust of Washington, another of the downtown contender s, declined to say what drew the company to Portsmouth. A spokeswoman for the Sembler Co. of Florida, one of the four bidders on the Midtown shopping center project, would only say her company is considering expanding into several locations in Virginia.
Downs credited city officials for the increased interest. In the past, Portsmouth had eagerly accepted whatever a developer proposed without weighing other options.
"They've done a very savvy job of marketing the opportunities in Portsmouth," Downs said. "Not giving anything away, but bringing the opportunity before the right kind of players."
Other experts say Portsmouth has potential for office space development because of its location near the center of the region.
"Clearly, Portsmouth has been one of the least active submarkets in South Hampton Roads," said J. Scott Adams, regional president for CB Richard Ellis , a real estate services company. "I believe Portsmouth's greatest opportunity is to capture the dense number of the people who are coming to work from the southern and western parts of Hampton Roads."
Adams said Portsmouth has an opportunity to take advantage of the traffic that cuts through it, particularly on Interstate 264, as drivers head to and from work. Those commuters might be tired of enduring traffic in the Downtown Tunnel, he suggested.
While there may be more interest in Portsmouth development, it might differ from the interest in Norfolk office space, Adams said.
Unlike downtown Norfolk, which has a diversity of tenants from banks and financial services to law practices and consulting companies , Portsmouth's market should be more specific - focusing on its existing maritime business, he said.
The city is working with a consultant to develop a strategy to attract more of those types of businesses.
"One sector of the downtown market that would consider Portsmouth is the port community and the logistics companies," Adams said. "I don't think the same would be true for the majority of financial institutions and leading financial services firms. But that can change over time."
Lynch said he hoped the two projects getting under way would spark more interest in nearby areas of the city. Officials will choose a developer for the Midtown parcels in mid-May, and select the final plan for downtown at the end of May.
"I'm hoping this spurs excitement," he said.
The only hang-ups to additional development, said Adams and other real estate experts, were lingering perceptions that the city's downtown is unsafe. The city would need to continue to address those, Adams said, to attract local and outside companies - much like Norfolk has done.
"Downtown Norfolk didn't have the buzz 20 years ago that it has now," Adams said. "A lot of people didn't want to work downtown looking back to the early 1970s and early 1980s. It takes time and continued investment."
Reach Meghan Hoyer at (757) 446-2293 or
battinto.batts@pilotonline.com