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Buckroe Boom Downtown Bust?
— Local developer Tommy Thompson's Kicotan Co. entered an agreement with the city last year to build a four-story brick building called the Francis Ballard I at the northwest corner of Kings Way and Queens Way in downtown Hampton. It was to feature a clock tower, a restaurant, two floors of office space and condominiums on the fourth floor.
Thompson spent about $150,000 on plans and specifications. Construction was scheduled to start in September.
Then the credit market tanked.
Whispering began around the city about Thompson's downtown property and cast doubt on his ability to develop high-end housing in Buckroe.
Thompson says these are two completely different projects.
His bank changed the terms of his loan for which he had a verbal agreement on the downtown project, he said. The new terms required Thompson to have the building 75 percent leased before construction started. His bank and other lenders were only willing to commit only 50 percent to 75 percent of financing for the $5.2million project, and at a higher interest rate than Thompson originally planned.
The terms were "suicidal," he said.
Ownership of the downtown lot was going to transfer from the Hampton Redevelopment and Housing Authority to Thompson's company, at a cost, once Thompson started development. He asked for an extension. The city agreed in November to a six-month delay and an option to extend it by another six months, to Nov. 12. The land still belongs to the housing authority.
Meanwhile, Thompson's other company, Harrison & Lear Inc., along with the Peninsula Housing & Builders Association, made a pitch last fall to develop a different piece of public land.
Thompson gave the city an unsolicited proposal on a near-empty city block with views of the Chesapeake Bay across the recently renovated Buckroe Beach Park. The plan is to build half of the block into a Parade of Homes — a grouping of high-end single-family houses and condos in mansion-style buildings.
"Now, first of all, I've got builders who have agreed to take all the lots," Thompson said of Buckroe. "What's different about this is I'm developing the lots and selling them to the builders."
Instead of accepting Thompson's plans for Buckroe, the city asked other developers to submit proposals. Three replied.
None of the responses have been released by the city, but two made their intentions known — Thompson and a team of former NFL football stars: Bruce Smith of Bruce Smith Enterprises and William Fuller of Fulco Group.
The third interested developer, Potomac Falls Realtor B.K. Allen, won't comment other than to say via e-mail she has "purposely avoided the media and worked with the citizens."
The City Council will hear presentations from the three developers during a public meeting March 11 in the council chambers at City Hall. The Buckroe land is a public space and can only be sold or transferred if a "super majority" — six of the seven council members — gives approval to do so, said City Attorney Cynthia Hudson. That means two dissenting votes could kill any proposal.
If the council agrees to work with Thompson and the builders' association, Thompson would put in the driveways, parking and other infrastructure. Then 13 to 15 different home builders will individually get loans and each work on constructing a home. If one of the home builders can't get a loan to build a house, Thompson said he will pick another home builder of about 100 who are in the 400-member builders' association. The other members are construction-materials suppliers and subcontractors.
Thompson said in his 55 years as a developer, he has been involved in 20 different Parade of Homes.
"I have more experience in doing this and the bank has more experience in supporting me doing this," he said of the Parade of Homes compared to the mixed-use building downtown.
Thompson is quick to point out that this Parade of Homes would feature a different type of house than in previous events. The key features are intended to be environmentally friendly "green" buildings. Homes would be on smaller lots, priced at about $400,000. As far as the downtown property, Thompson said if November comes and he is not allowed another extension by the city, he'll be out $150,000, which is better than having lost $1million of his investment.
"Let somebody else come in and get rich if they think that it's an easy deal," he said.
"But I wanna do it because I grew up in downtown Hampton, and as a boy I walked by that drugstore, which is what it was, and when I went to church I went there and got a soda.
"I skipped Sunday school and went there and got a soda with friends of mine and then came back by the time Sunday school was over and they took roll and I got credit for having attended Sunday school. So mother never knew the difference."