The developers of the Oceanfront’s proposed surf park disputed key financial details about the project that were unveiled in a city document from the Virginia Beach Development Authority this week.
On Tuesday, the authority approved a resolution, which lays out the intent of the authority to turn over the development and ownership of the planned surf lagoon to a nonprofit organization, P3 Foundation LLC.
The surf park is one aspect of the mixed-use Atlantic Park project on the former dome site between 18th and 20th streets.
The resolution, which was released Sept. 16, stated the project’s developer “encountered difficulty finding conventional financing mechanisms” for the surf park and, as a result, indicated to the authority the success of the entire mixed-use project might be threatened.
Mike Culpepper, a managing partner with Venture Realty Group, the lead partner in the project, wrote in an email Wednesday that that the development group has “never attempted to obtain conventional financing for the surf park.”
He also wrote that he’s “not aware” of anyone in his development group indicating to the authority that difficulty in securing conventional financing for the surf park might threaten the development of the mixed-use project.
Earlier this week, Culpepper also stated it was incorrect that P3 Foundation would be developing the surf park, but would not elaborate.
The city, meanwhile, released a statement Friday, saying it was the city’s understanding that the developer wasn’t pursuing conventional financing for the surf lagoon.
“We were advised by the developer that conventional financing would be challenging to acquire for an unconventional asset like a surf lagoon,” the statement said. “We interpret the language in the resolution as expressing this understanding.”
The statement did not address the detail in the resolution about the potential that the mixed-use project could be threatened.
On whether the developers read the language in the resolution before Tuesday’s meeting, Culpepper wouldn’t answer as to whether he did, but said “many other people reviewed this.”
He added that the development group’s plan to seek unconventional financing is not a new decision. The group selected its bond finance strategy for the surf park more than two years ago to gain access to the tax-exempt market, which typically has lower interest rates than conventional financing, he wrote.
The resolution didn’t require City Council approval, but Councilman John Moss said it’s well-known that the developers encountered difficulty finding conventional financing mechanisms.
“That has been a general conversation, and that is not a surprise to any one,” Moss said.
Stacy Parker, 757-222-5125, stacy.parker@pilotonline.com