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Home My WebLink AboutCity Council Retreat Jan 26 2026 Afternoon SessionCity Council Retreat January 26 -27, 2026 Agenda 2 •Major Projects Fund Refresher •Conceptual Central Beach Financing Plan •Recreation Center Modernization Financing Plan •Aquarium Modernization Discussion •Preliminary Budget Guidance Activity Major Projects Fund What is the Major Projects Fund? 4 •Established in FY 2025-26 to provide a sustainable funding source for otherwise unfunded major capital improvement projects primarily by redirecting existing dedications •Currently planned projects include: •Critical Court Facility and ADA Accessibility • Indian River Road Safety Improvements • VB Trail Phase I •Law Enforcement Training Academy •Future projects to be supported by the fund could, with City Council approval, include: • Additional phases of VB Trail •Coastal Resiliency •911 Backup Center •Aquarium’s existing infrastructure rehabilitation. Major Projects Fund Funding Sources 5 Type Dedication FY26 Amount Real Estate Tax 0.3¢$2,476,083 TIF Transfer 40% of total $4,345,789 Meals Tax*0.77%$14,252,046 Total Funding $21,073,915 0.5% of the meals tax is to be prioritized and dedicated to the construction, modernization, or maintenance of infrastructure for the purpose of public safety and judicial administration •Real Estate tax redirected from ARP •0.27% of meals tax redirected from Open Space Major Projects Fund Funding Strategy •Cash (Pay-go) finance primarily the design of projects in the early years of the CIP •Program construction costs once known from design •Reserve capacity for future debt service payments for construction 6 Project FY26 FY27 FY28 FY29 VB Trail Construction 12,300,538 3,129,170 LETA Design 8,773,377 Courthouse Design 15,000,000 Indian River Road Design 9,181,617 Reserve for future use -9,445,044 7,408,506 23,080,761 Discussion 7 Central Beach Conceptual Financing Plan Discussion Central Beach Small Area Plan 9 •Direction provided by City Council to evaluate the area and develop a small area plan •Public engagement occurred June 2024 - December 2024 through a combination of public meetings, interviews with stakeholders and city departments, online survey, etc. •FY 2026 – FY 2027 Focused Action Plan 2.14 •“Work with City Council to understand how to potentially fund elements of the Central Beach District Small Area Plan” Central Beach Small Area Plan 10 The Central Beach preferred plan strategic vision highlights the plan as an aspirational and actionable vision with components to make the area: •Diverse •Place of Events and Culture •Connective •Vibrant •Driving visitation and tourism 11 Vision Includes: MIXED USE GATEWAY SPORTSHOUSING HOUSING HOUSING HOUSING HOUSING HOUSING HOUSING CIVIC HOUSING HOUSING •Parking •Housing •Mixed Use •Sports District •Civic Campus •Open Space 12 Vision Includes: •Sports Venues •Museum •Facilities bettering “Sense of Arrival” •Elevated Connectivity •Stormwater Improvements and Trails •Hotel 13 Various Phases: Summary of Conceptual Combined Phases 14 Summaries Phase I Phase IB Phase 2 Phase 2B Phase 3 Total Hotel Rooms 450 150 - - - 600 Parking Spaces 4,510 2,420 2,180 820 2,950 12,880 Residential sq ft 500 1,145 125 215 590 2,575 Commercial sq ft 120,000 175,000 15,000 - - 310,000 Action Sports sq ft 100,000 - - 60,000 - 160,000 Museum sq ft - - 65,000 - - 65,000 Retail sq ft 55,000 65,000 - 15,000 15,000 150,000 Park acres 2.4 2.4 What would this plan cost and how would we pay for it? 15 •“A plan without a way to pay for it is just ink on a piece of paper”….David Bradley •Too many unknowns remain to fully cost out the conceptual plan as public investment would need to be determined for: •Stormwater •Street Infrastructure •Action Sports, Museum, etc. (privately funded or publicly funded) •Elevated walkways •Park Development •Parking •Action Sports, Museum, etc. (privately funded or publicly funded) •Private development components would generate revenue to help offset. Scenario: Improvements/Buildings Needed to Offset Parking Investment 16 Real Estate Improvement 10,000,000 Taxable 100,000 Tax Bill 97,000 Debt Service 95,000 Investment 1,000,000 Parking Spaces ($35k)29 100,000,000 1,000,000 970,000 950,000 10,000,000 286 1,000,000,000 10,000,000 9,700,000 9,500,000 100,000,000 2,857 12,880 450,800,000 42,826,000 42,826,000 44,150,515 4,415,051,546 Town Center TIF Map - Context 17 Total Improved Value $1.2 Billion In 1998 = $151.9 million Establish Central Beach TIF around Plan Parcels Alone? 18 Summaries Total Revenue Hotel Rooms 600 76,581,600 Residential Units 2,575 608,529,150 Commercial/Retail sq ft 460,000 57,120,000 Existing Improvement Value (104,179,400) Net Improvement 638,051,350 Tax Generated 97¢ per $100 assessed 6,189,098 Realities of Central Beach Financing Plan 19 •Private development of the parcels will not likely generate enough “but for” revenue to cover the cost of infrastructure; however, it could help offset a portion •Tourism Investment Program (TIP) Fund will not have capacity to cover the entirety of this investment, but would likely need to be a combination of sources for consideration: •TIP •Parking Enterprise Fund •General Fund •Etc. •If a desire to establish a TIF exists, the boundary will need to be substantially larger than the plan area. •A sustainable plan based on organic growth for an investment of this size could take decades to mature. Assessments by District for Context District Total Assessment 01 6,726,088,900 02 10,928,230,900 03 7,164,345,800 04 6,734,078,600 05 9,067,368,400 06 14,710,757,500 07 5,953,687,700 08 11,597,029,600 09 8,543,722,100 10 5,302,579,900 Total Assessment 86,727,889,400 20 Hypothetical TIF Scenario •Real Estate Assessor’s Website: 300 parcels •Boundary Tax - $8.1 M* •TIF Calc •$8.1 M Base Year •$8.3 M Year 1 •$0.2 M Increment 21 * Not every parcel captured is taxable simply for context Additional TIF Information •Subject to the citywide levied real estate tax rate. •Adjustments up and down impact revenue •Dedication of revenues that would otherwise potentially go to the general fund to cover growing cost of government services: •Police, Fire, EMS, Inspections, etc. 22 Discussion 23 Recreation Center Modernization Parks and Recreation Special Revenue Fund 25 •Accounts for revenue from fees and charges, dedicated tax revenue for community recreation centers associated with the operation of the Parks and Recreation department. •Established in 1993 to provide sustainable long term funding plan for the recreation centers, including eventual recapitalization •Funding is derived from: •User fees •3.467¢ of the Real Estate tax Modernization Updates 26 •Modernization Study conducted in 2020 •Various cost options and scenarios were provided ranging from basic maintenance “must do’s”, renovation/expansion of existing facilities, and even construction of additional facilities to be operated. •Limitations of fund capacity combined with the age of the facilities has narrowed the discussion to recapitalization of three oldest facilities which are: •Great Neck Constructed in 1990 •Bayside constructed in 1992 •Princess Anne constructed in 1994 Modernization Cost Assumptions 27 •Current Build Cost Estimates •Great Neck - $47 million in FY26 •Bayside - $43 million in FY26 •Princess Anne - $35 million in FY26 •Each year delayed will add a 3% inflationary increase to the cost of the project •Construction timeline is 2 years of downtime per facility with facilities not to be down concurrently Bayside Preferred Great Neck Preferred Princess Anne Preferred Next Steps 28 •Tentative Construction Start •Great Neck Rec Center FY 2027 -28 •Bayside Rec Center FY 2029-30 •Princess Anne Center FY 2031 -32 •This timeline would have one Recreation Center down at a time for approximately six years. •Aligns with a 40-year replacement cycle and capacity would exist to replace the next set of Recreation Centers •Moderate fee increases are anticipated to be necessary for replacement to keep place with natural inflation • consistent with historic revenue growth •Unless direction is provided otherwise, FY 27 CIP will program construction funding for Great Neck Recreation Center Discussion 29 Aquarium Modernization Historical Context of the Virginia Aquarium •The Virginia Aquarium is celebrating 40 years of operation. •3 studies were initiated to determine the future sustainability and operating vitality of the VAQ via interior exhibits, the external structure, and operational model. •Core exhibits including the Seal, Shark, and Turtle are 30 years old having exceeded a design lifespan of 25-30 years. •The original exterior structure is 40 years old, sustained only by periodic maintenance 31 Next Steps •Unless otherwise directed, FY27 CIP will include initial design funding for Aquarium modernization (much like Rudee Loop process) •This is the first step in a long-term solution to replace aging infrastructure and maintain continuity of animal care, facility structural sustainability, and guest experience. •Based on industry standards and our own historical experience: •Planning → Design → Permitting → Construction → Opening •This process takes a minimum of 7 years to complete. 32 Discussion 33 City Council Preliminary Budget Guidance Activity Preliminary Guidance: Hypothetical Allocations •Select a box on the scale for each option to indicate the priority it should be given. •Example : •If an option should be given the highest priority, select the box all the way to the right . •If all options should be given equal priority, select the same box for all options. •If you have a different suggestion than the options included on the handout, write it down in the empty slots provided and indicate the priority it should be given. 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