VIRGINIA BEACH, Va. — The City of Virginia Beach has officially bought into the Pembroke Square redevelopment project, with the city council voting in favor of an updated term sheet Tuesday night.
The plan modifications changed how much the city will invest in two parking garages from $23.8 million to $22.3 million. It also increased Pembroke Commercial Realty’s investment from $162.4 million to $163.3 million. Developers first requested the city’s help with paying for the parking in February of 2022.
The vote of 9-1, with one abstaining, means the city will invest up to $22 million for the free parking. There are currently 3,000 spaces at the site. The plan will add 745.
The approval is a victory, according to Pembroke Commercial Realty President Ramsay Smith. He told 13News Now, “it’s a significant step towards progress. Without the parking garages, the feasibility of multi-family and hotel pretty much diminished to nothing.”
Smith added, building up allows for better use of the existing space. “You really want to take as much opportunity to densify a property as you can,” he said. “Otherwise, you’re wasting land.”
The Pembroke Square redevelopment has been in the works for years. In December 2021, the 48 tenants in the mall were told to vacate by the end of January, as owners announced a $200 million plan to redevelop.
Phase I of the project is currently in progress. The senior living complex, Aviva, will have 153 units and is estimated to be completed this fall. Phase II, the 272-unit apartment building, is slated to be built from 2025-2027. The hotel, Tempo, is Phase III. Construction for the 156-room space is set for 2025-2026.
Council members expressed their support for the city’s contribution, especially as the garages will be city property, generating tax revenue.
“We’re not just handing you money,” said Vice Mayor Rosemary Wilson. “We’ve voted on this before. This is actually less money than we voted on before.”
“It will help Virginia Beach be profitable, stay the course, and we’re here to support it,” added Dr. Amelia Ross-Hammond.
The garages are expected to generate real estate tax revenue starting in 2026. Over 20 years, it’s estimated the garages will earn the city $7.5 million from real estate taxes. That value is not adjusted for inflation.