The city bought Military Circle for $10. That land is the subsidy — the financing instrument that makes everything else possible. A Community Land Trust holds it permanently, removes it from speculation, and enables housing at 43–49% below market rates without ongoing city subsidy. Three developer proposals have been shelved. The library and fitness center placeholder is not a plan. This is.
Military Circle is 73 acres at the I-264/I-64 nexus — the highest elevation in a city sinking 4–5mm per year. All prior proposals (Pharrell Williams, Emmitt Smith, Bruce Thompson) required the city to sell or lease the land to a master developer. Each was shelved. The common thread: private ownership of a public asset.
The commons model inverts this. The city retains land ownership via CLT. Small developers build under ground lease. Residents own condos at cost basis. Retail operators lease at 43% below market. No master developer, no extraction, no 50-year lease to a single entity.
The Eastside Civic League named the alternative correctly in March 2025: "Downtown Tunnel Vision 2.0." The city has a narrow window before another placeholder becomes permanent.
The financing works because CLT ground leases eliminate land cost — typically 25–40% of construction cost. That gap is filled by LIHTC equity (~$68M site-wide) and VHDA below-market construction loans. No ongoing city subsidy required beyond the land already owned.
Phase 1 (2026–28): 1,535 units · $284M · LIHTC + VHDA + CDFI
Phase 2 (2029–32): 1,689 units · $312M · adds CLT ownership condos
Phase 3 (2033+): 1,894 units · $398M · Tide extension unlocks transit density
NOI at stabilization: $43.5M/yr. The commons pays for itself.
The site is subdivided into ~0.3ac parcels under CLT ground lease. Each parcel is a standalone deal — sized for community development organizations, cooperatives, credit unions, and small operators. Not requiring institutional capital.
| Item | Per parcel | Notes |
|---|---|---|
| Avg units | 25 | ~0.3ac, 4–5 stories |
| Total construction | $4.6M | $185k/unit affordable cost basis |
| LIHTC tax credit equity | $375k | Federal program, 9% credit |
| VHDA construction loan (65%) | $2.8M | Below-market, Virginia Housing |
| Developer equity required | $1.5M | Credit union, church, co-op scale |
| Land cost (CLT ground lease) | $0 | City retains land permanently |
| Total storefronts | 2,120 |
| Reserved small operators | 1,590 |
| Market lease | $2,100/mo |
| CLT lease | $1,200/mo |
| Below market | 43% |
| Buyout option | $906/mo own |
SBA 504 at 10% down. Operators own their space for less than rent.
| Units available | 1,357 |
| Market price | $295k |
| CLT price | $150k |
| Discount | 49% |
| Monthly PITI (FHA) | $1,270 |
| vs. market rent | $1,650/mo |
| 10-yr equity built | $36,583 |
Resale-restricted. Owner keeps 25% appreciation. Permanently affordable.
| Elevation | 8–12ft |
| Flood zone | Zone X |
| Norfolk subsidence | 4–5mm/yr |
| Sponge park functions | 4 |
| Stormwater capture | 70% runoff |
| Wuhan precedent | −10× floods |
Highest ground in Norfolk. As sea level rises, this site becomes more valuable — not less.
Military Circle is zoned C-R: Regional Commercial. The ordinance's stated purpose includes "high-density mixed-use development" — this plan is exactly what C-R is designed for. But C-R carries a structural trap: any multi-family development over 24 units requires a Conditional Use Permit (§4.2.3.D). With ~200 parcels averaging 25 units each, that means 200+ individual CUP applications, each requiring a separate City Council vote, spread over 20 years. That is not a development path. It is a mechanism for indefinite delay.
The correct vehicle is a Planned Development (PD) district rezoning — a single Council vote that replaces all individual CUPs with a master plan. The PD path is explicitly designed for sites of 3+ acres with innovative mixed-use programs (§3.8.2). At 73 acres, Military Circle is the textbook case. A PD sets custom dimensional standards, raises the 60ft height limit, eliminates parking minimums, and defines the CLT ground lease structure in one action. Every major Norfolk mixed-use redevelopment — East Beach, Harbor Walk, Broad Creek Renaissance — used this vehicle.
| Path | Council votes | Timeline | Risk |
|---|---|---|---|
| 200+ individual CUPs (status quo) | 200+ | 20+ years of hearings | Any hostile council kills it piecemeal |
| PD district rezoning (recommended) | 1 | 12–18 months to approval | One vote, then master plan governs |
The 15.6-acre parcel at 824 N Military Hwy (GPIN 1457375898) is owned by MPB, Inc — the incumbent mall operator. MPB purchased it from the EDA in July 2020 for $20 million. The EDA had acquired it from JC Penney in 2014 for $2.5 million. That same EDA also holds the 19 parcels (73.4ac) in the commons plan. MPB holds approximately 45 additional acres at the site, assessed at ~$230M total — including what is believed to be the Ross Stores anchor space.
Ross Stores holds options on MPB parcels running to 2036. After 2036, as mall retail continues its national decline, MPB faces a stranded-asset scenario on 45 acres of commercial space with no viable single-tenant replacement. The CLT should establish a right-of-first-offer relationship with MPB now. A CLT ground lease converts MPB's liability into a guaranteed income stream — below-market but permanent. This conversation gets harder after any public redevelopment announcement raises MPB's expectations.
Note on the 2020 EDA sale: the EDA sold the JC Penney spine parcel to MPB for $20M during the same period the city was publicly discussing redevelopment. That transaction warrants scrutiny as a matter of public accountability.