Title
Resolution of the Council of the City of Hampton, Virginia Authorizing the Appropriation of $257,000.00 from the Economic Development Fund to the Economic Development Authority of the City of Hampton, Virginia to Finance Certain Infrastructure Costs Payable in Connection with The Phenix Commerce Center Development.
Purpose
PURPOSE/BACKGROUND:
The Economic Development Authority of the City of Hampton, Virginia entered into a Development Agreement with NP Hampton Commerce Center, LLC on November 9, 2022. Pursuant to that Agreement, the City of Hampton, Virginia would be responsible for up to $1,000,000.00 for intersection infrastructure work on Aberdeen Road and $257,000.00 for Pine Avenue infrastructure improvements. In FY24 $1,000,000.00 was appropriated for the intersection work; however, the $257,000.00 was not at the same time. The City has set aside $1.5 million in land sale proceeds for additional investments as identified by the Shell Road neighborhood, and those funds will not be impacted by this appropriation and will remain completely intact to support the identified neighborhood priorities.
Discussion:
The development, The Phenix Commerce Center, transformed the former Virginia School for the Deaf, Blind and Multi-Disabled site (closed in 2008) into active industrial use, potentially mitigating blight and underutilization. Being sensitive to the surrounding neighborhood, it incorporates a 10-acre park or buffer zone between the industrial buildings and neighboring residences to reduce the noise, traffic and visual impacts. Together, the two buildings form an integrated industrial park that totals approximately 834,000 square feet.
The Center is expected to generate around 250 permanent operational jobs. The development represents a $113 million capital infusion by NorthPoint and Elegran Capital. Once the project is completed and tenants are in place, it is estimated to generate significant new annual tax revenue.
As part of the Development Agreement, the developer donated 5,600 square feet in Building One for a city-operated Workforce Training Center, intended to enhance local employment readiness. The project's location offers high-quality Class A industrial space and is less than two miles from Interstates 64/664 and within 30 minutes of the Port of Virginia. On May 1, 2025, US Elogistics Service Corp. (also known as Cirro Global) signed on as the first tenant. The company leased approximately 149,685 square feet in Building Two, marking the largest lease in the region for a newly constructed Class A industrial space in over a year.
Impact:
The Phenix Commerce Center aligns well with Hampton's goal and planning efforts supporting job creation, redevelopment and workforce training. It supports the Hampton 2040 Strategic Plan and area-specific master plans by delivering economic growth, workforce opportunity and high quality public-private coordination, with minimal public capital burden. It is a strong example of how redevelopment initiatives can execute the Council's long term vision.
Recommendation:
Rec
Staff recommends Council approve the funding request.
Body
WHEREAS, the Authority entered into a Development Agreement (the "Agreement") with NP Hampton Commerce Center, LLC (the "Developer") dated November 9, 2022 to purchase and develop the former Virginia School for the Deaf, Blind and Multi-Disabled site on Shell Road (the "Property");
WHEREAS, the Agreement provides that the Authority shall pay for certain infrastructure costs, including up to $1,000,000.00 for the design and construction of a signalized intersection at Aberdeen Road, and up to $257,000.00 for the construction of a terminus and cul-de-sac at Pine Avenue;
WHEREAS, the proceeds from the land sale transaction were paid over to the City, but intended to pay the cost of aforesaid infrastructure improvements;
WHEREAS, the City of Hampton has set aside $1.5 million in land sale proceeds for additional investments as identified by the Shell Road neighborhood;
WHEREAS, the City of Hampton will benefit from additional development of The Phenix Commerce Center in the form of real estate, sales, personal property and other taxes;
WHEREAS, the $1,000,000.00 was appropriated to the Economic Development Authority of the City of Hampton, Virginia ("EDA") in FY24 for said infrastructure improvements; an additional $257,000.00 is required for the EDA to be able to fulfill its obligations under the Agreement.
NOW, THEREFORE, BE IT RESOLVED, by the Council of the City of Hampton, Virginia as follows:
1. That the sum of $257,000.00 be appropriated from the Economic Development Fund to the Economic Development Authority of the City of Hampton, Virginia; and
2. That the use of said additional sum by the EDA shall be solely to fulfill its obligations under the Agreement, specifically its obligation to fund those certain infrastructure costs set forth herein.