31st Street developer gets city project manager 'fired'
Claims city failing to meet contact terms and construction schedule

City Director of Public Works Dean Block acknowledged Tuesday that he has been removed as project director for the 31st Street hotel project at the request of convict-developer Bruce Thompson to City Manager Jim Spore.

Block, recognized as a hardworking, dedicated public servant, would merely say that there "was a conflict issue between himself and Thompson that made interactions more difficult in getting things done."

He has been replaced by a 'reluctant' Public Works Director Clarence Warnstaff.  Block said he will continue to work on the project 'with Mr. Warnstaff.'  Block said he was 'not out of the project completely.'

City hall sources, however, said Block 'was fired' after Thompson raised 'hell' with Spore in a stormy meeting just before Christmas over a series of meetings with Block on the project that became confrontational and eroded into personal attacks.  "Thompson was calling the shots with Spore," said one source.  

Thompson was reportedly upset that the city side of the project - a parking garage and public park - was suffering a series of timeline delays that were jeopardizing his construction schedule and blamed Block.  "He called Block incompetent," said a city hall source.

VNS was told that Warnstaff, who'd earlier served a 10 month interim term as Spore's chief of staff, did not want the job or responsibility and told Spore that in no uncertain terms.  Spore, however, a source said, ordered Warnstaff to take the job. (Spore likewise has a fiery temper and doesn't suffer dissent or opposition well. See:  Spore aggressively attacked citizen movement last year.)  

Of the exchange, Warnstaff said, "I don't know that is the correct way to characterize that.  I serve at the pleasure of the city manager and he asked me to take on the project and I've done that and we'll certainly give it our very, very best." 

Some of the problems that got Thompson's ire up with Block, who has been a long time and vocal supporter of the project, was a difference of opinion as to what impediments there'd been and how those delays occurred or may have occurred.

There's also a difference of opinion with Thompson over how the public park at the end of 31st Street was  designed and where various parts of it will be located.

Asked if he was surprised that Thompson had 'turned on him' after his long time support, Block said, that after 34 years working for the public, 'there's little that surprises me.'

Neither Block nor Warnstaff Tuesday could state what the status of the project is.  Ground has been broken, however, and construction has begun.  Warnstaff said he hasn't met with Thompson since being named to takeover the project.

Warnstaff did say that he was going to follow the letter of the contract documents that have been approved by City Council (revised several times to meet Thompson's additional demands) and that he'd be representing the best interests of the citizens.  "My goal is to live up to the city's obligations to that contract (between the city and Thompson's company)."

Warnstaff, who was key to getting the Lake Gaston water project completed, came here in 1985 from Dallas, TX.  Asked what his plans for retirement were, he said, "I haven't nailed it down.  I've been here 18 years....  I have high regard for the city of Virginia Beach. I think it, the city of Virginia Beach, is a great organization....  Virginia Beach is our home now.  When I reach that point of retiring and I don't when that is going to be...."

Warnstaff has a reputation of being a professional, thorough, tough, independent-minded public servant.  Said one source, "I don't know whether Thompson jumped out of the frying pan into the fire when Clarence was named project director."  "I approach each job in a professional manner," Warnstaff said, "and try to do the very best for the citizens of Virginia Beach."  He said Spore has the same philosophy he has in working for the citizens of the city.

"My focus is public infrastructure, getting the facility properly designed in a timely manner in accordance with the city's contractual obligations.  And we're going to get that project designed and make a contract award and we're going to built it," Warnstaff said.  The city is responsible for the public park, parking garage, and street improvements on the 31st Street corridor leading into the hotel's entrance.

[No other hotel has ever had taxpayers foot the bill for any such supporting infrastructure in the city's history.]

Warnstaff has his job cut out for him.  Thompson has had an aggressive, outspoken, and, even at times, belligerent relationship with the city - threatening to sue the city on more than one occasion in the last 4-5 years and withdrawing from the project.

After getting the plan originally approved, Thompson came back to the city later with a request to modify the height restrictions because he learned he could not build the number of contract-required rooms without raising the height to 200-feet from the city's 150-foot limit.

In March of 2002, in a series of threatening email exchanges with city officials, Thompson threatened to pull out of the deal.  In reviewing revisions that would have given him the extra height, Thompson wrote council members and officials:

"I came to the conclusion that  it was and is the worse than [sic] any document since the Louis Jones land lease you offered and running a close second [sic]...there is no way I can perform under that agreement and even if I could I could not accept the level of risk that is suggested in that document.

"I will restate my feeling that it would be only fair that if I, we do not get either the amended and restated document...then I believe the city should reimburse us for our costs in some manner as I believe the city had an obligation to give us an amendment consistent with the term sheet (of the project)."

Kevin Martingayle, who represents a group of businessmen who said they were not satisfied with the way the deal at that time was being handled said:

"One thing is for certain:  This project has been a mess. The public doesn't want it, the city and developers have been bickering, financing remains an unresolved issue, and there's still no announcement of a franchise award. This is about as stable as Enron stock."

The council gave Thompson the extra 50-feet of height that he wanted.

Sold to the citizens as a 4-star hotel, Thompson has since said he has a franchise with Hilton to build, not a 4-star hotel,  but a 'Top Drawer Hotel.'  Attempts to reach Hilton officials for the chain's definition of a 'Top Drawer Hotel' were not successful.

In the meantime, regardless of fault, the clock continues to tick on the construction timeline.  Warnstaff said March, 2005 is the scheduled target date for opening of the hotel and parking deck.  "Time is of the essence," said Warnstaff.

There are still many, many issues to be resolved, said a source at city hall.  And to date (see below) the project has had a long, controversial and sordid history. 

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