If it wasn't for bad luck, Ruffin and Thompson wouldn't have any good luck at all 

Edmund C. Ruffin and Bruce R. Thompson have to be among the luckiest businessmen in the world.  They bought an old hotel on the oceanfront in 1997 for $2,321,000.  

Despite the worst imagined string of bad luck, a 1998 hurricane and adjacent city construction that resulted in its demolition at taxpayer expanse, the duo ended up with net gain from damages totaling $179,452 more than they paid for the  property, according to city records. Thompson said he couldn't dispute any of the figures.

And they are now building an all-new 90-room Boardwalk Inn hotel on the site.  Thompson said the facility will be 50/50 timeshare/hotel rooms.  He hopes to have it open for business by start of the season (generally considered to be Memorial Day), Thompson said. 

Thompson said he didn't have a recollection of the specifics of the damage payments, but added the insurance settlement was sizeable.

After buying the hotel, he said, they spent $500,000 renovating it and "we had to carry the debt service against it for about 18 months while it was shut down."  Thompson said, "It cost us $22M to replace it (the old building with the Boardwalk Inn).

Ruffin and Thompson bought the old Tradewinds Hotel at 16th & Atlantic  in May 1997 for an addition and renovation into a new time share/hotel complex.

Who are Ruffin and Thompson?

They are principals in Professional Hospitality Resorts, owners/managers of several oceanfront hotels.

They are the city's partners in a project to build a 4-star hotel on city property at 31st Street and Oceanfront.

City voters in a referendum in 2000 voted against the project by 57%, but City Council ignored the election contending the voters were too stupid to know they were voting against the hotel project.

Along came Hurricane Bonnie in August '98, little more than a year after the purchase and closed the hotel for damages.

According to conflicting information in city records, they were paid $187,236 by Nationwide Insurance Co.

Bruce J. Tamin, Nationwide Insurance Services Inc., in a report to Linton Willis of the Chesapeake Nationwide office, wrote on 9/30/98:  

"Conclusion:  Hurricane Bonnie caused minor damage to this building. A torn roof covering membrane and water intrusion via wall mounted air-conditioning units are attributed to the storm. The other deficiencies...are not attributive to the hurricane."

Then less than two months after the hurricane, the Army Corps of Engineers began excavation beside the hotel, in the part of 16th Street between Atlantic Avenue and the boardwalk, for a storm water pumping station as part of the hurricane protection project. 

City 'lost' records on Tradewinds deal

It was shortly after the first of the year that Virginia News Source started seeking the records detailing the paper trail in how the city was notified, responded to, and handled each step of the process to awarding Ruffin/Thompson $1,550,000 in tax dollars. 

The head of the zoning office had passed away and Cheri Hainer, building codes administrator,  was unable to find any records, except the demolition permit, dealing with the property.  She referred us to Public Works.

There a very helpful employee when told the files we wanted to see said, "Oh, that's the one with all the weird stuff in it."  Fifteen minutes later she informed us it couldn't be found.

Initially City Attorney Les Lilley said the files can't disappear, he had a set in his office, but they were 'litigation' files that were not public.  Later he ordered the records be made available

VNS was given a box of files that contained a drawing of a 'smoking gun.' Other than the drawing, no 'smoking gun' was found, but it appeared the file had been sanitized.  This story is taken from what was left for VNS's review.

Before work was started, city engineers 'walked by the Tradewinds' and made a 'visual inspection' of the building's exterior condition.  Based on that cursory inspection, it was deemed sound and no problems reported.

City records document that engineer Steve Shirley called in a report of cracks in the Tradewinds, but there was no time or date on the record.  But it was in early October, 1998.  The cracks were attributed to vibrations of the construction from pile drivers being operated by Tidewater Construction and Middle East Builders (MEB), subcontractor, for the Army Corps.  Work was stopped on the pump station.

Structural engineers were called in to assess the extent of the damage.  Engineer Shelton Leavitt reported the building could be stabilized and restored.  

GAB Robins North America, insurance adjusters, on 11/20/98 estimated the damage from the pile driving to be $8,230.47.  

Built as a 55 room facility in 1972, R. T. Brown, regional general adjuster for GAB Robins North America Inc., said in a report dated November 30, 1998:  "It was brought to my attention the north wall of this hotel gave way a number of years back and was in fact replaced with stucco." 

But on March 31, 1999, Alfred E. Abiouness, a structural engineer, reported the damage was confined to the south 1/3 end of the building, but he wrote Karl Denison, CCPA, executive vice president, Hoodman-Gable-Gould Adjusters International of Rockville, MD that in order for the Tradewinds to be restored, it would have to be demolished.

Boardwalk Inn
Artist rendering of the Boardwalk Inn now being built on the site of the old Tradewinds Hotel @ 16th St.

Abiouness later was hired as the structural engineer for the new Boardwalk Inn. (See below for more information about Abiouness).

City records indicate that in a letter from Robert Tayloe Ross, a lawyer with the Richmond firm of Midkiff, Muncie, & Ross, representing Nationwide Insurance, Ruffin and Thompson were paid  $763,216.60 for damages from the construction.

The City Council in April 1999 passed a resolution condemning the property so the building could be demolished, the workplace made safe, and construction could continue on the pump station project.  

(VNS was originally told that city officials knew before construction started on the pump station that it would cause damage resulting in the demolition of the Tradewinds.  Later that statement was withdrawn. Assistant City Attorney Richard Beaver who handled the case said construction of the pump station couldn't continue once damage was discovered due to unsafe workplace conditions without the city stepping in and condemning and demolishing the hotel.) 

The city demolished the building, but left the piles.  C. J. Smith III, vice president, W. M. Jordan Co. Inc. estimated the cost of removing the pilings that were left in the ground.  The city paid $40,000 for removal of the piles.  Smith's company, W. M. Jordan Co., was then hired as the primary contractor for the new Boardwalk Inn.

The city appointed viewers (viewers are supposed to help establish fair market value for property being condemned) in the condemnation case included Richard Maddox.  Maddox was head of the Resort Leadership Council, a trade group with close ties to Ruffin and Thompson, which was found guilty in 2000 of making illegal campaign contributions in an effort to influence city council elections.  

DQ & Boardwalk Inn
Maddox's 17th St. Dairy Queen abuts Ruffin & Thompson's Boardwalk Inn

Maddox is currently a candidate for City Council from the Beach District. He was caught this week illegally running his political sign campaign out of a city trailer on property he leased the city for a city park (See:  Signs in city trailer ; City says use inappropriate and orders use stopped and Candidates scolded for use of city property

He  is Ruffin & Thompson's adjacent business neighbor with his 17th Street Dairy Queen and he lives just a couple houses from Ruffin in Croatan.  Maddox also anticipated having a business relationship in a deal to put one of his luxury Dairy Queen Restaurants on the site of the proposed 4-star hotel that Ruffin and Thompson are scheduled to build at 31st Street.

Another viewer was Vern Burlage.  Burlage's family was involved in the public-private partnership that built the city's 9th Street Parking Garage.  Construction of that facility was the first time in recent memory where the city closed a city street and gave the property in its entirety to one landowner. The property owners also got reserved parking in the facility for their properties on the beach side of Atlantic Avenue and the ground level portion for retail shops.  In the first three (3) years of operation it was being subsidized by taxpayers for a loss of more than $800,000 per year for a loss of $2.4M.

John L. Gibson III, was another viewer.  He was one of the owners and developers of the 9th Street Parking Garage which he leases back to the city.

But the condemnation case never had to go to court.  The city settled.  Virginia Beach paid Ruffin and Thompson $1,550,000 for the losses and damage to the Tradewinds, after demolishing and carting off the debris at taxpayer expense. 

Who's at fault?  Who'll pay?

Asst. City Atty. Beaver who handled the case for the city says the Army Corps will pay 65% of the damages.  But there is nothing in writing in the city's files confirming that deal.

The contract between the city and the Army Corps states:  The city is to hold the U.S. government harmless for "all damages arising from the initial construction...except for damages due to the fault or negligence of the government."

Col. Allan Carroll, district engineer for the Army Corps, wrote City Manager James K. Spore on Nov. 3, 1998 that the responsibility is the city's because the damage was not caused by negligence of the Corps or its contractor.

A handwritten note in the city's file dated 3/17?? states: "Bob Oswald said 'to pay this within the contract & cost sharing, the government has to be 'negligent.'  If we condemn the building to buy it and complete the project, Oswald said, it would then be 100% city items as the city's responsibility to provide right of way and easements."

Beaver says otherwise and the Corps will settle as soon as the hurricane protection project is completed.

Either way, the damages will come out of the pockets of taxpayers.

The amount of damages were based on an appraisal by Thomas Tye (See: Below for more information about Tye) who said he could only appraise the property from offsite because the owners (Ruffin and Thompson) refused to allow him on the property to inspect it and refused to give him access to income and expense data.

William E. Franczek, a lawyer with Vandeventer Black LLP, who represented Tidewater Construction Co. and MEB, wrote Evelyn Rowland, contracting agent for the Army Corps, that his clients would not accept blame for damaging the Tradewinds.

He wrote on Feb. 19, 1999:  

"Tidewater and MEB believe that the cause of the problems at the Tradewinds Hotel is not because of construction activities...but is because the hotel was not properly constructed in the first place.

"Our current understanding is that the Tradewinds was constructed without tying in the walls with the grade beams, without tying them to each other, and with the concrete slabs allowed to float.  In other words, it appears the building may be a 'house of cards'."


The city calculated its losses as follows:

Cost of loss of building


Rent of land


Reimbursement of engineering plans


Real estate taxes


Interest on building


Removal of pilings




But Ruffin/Thompson, using the data they refused to provide Tye,  wanted $1,804,039.  After much haggling, and avoiding the courts, the city settled for $1,550,000.  Thompson said he thought it was closer to $1.6M 

According to city records, here is how Ruffin/Thompson made out on their $2,321,000 purchase of the Tradewinds:

Damages from the city


Hurricane settlement


Nationwide settlement for construction damage




Less cost of Tradewinds in 1997


Net gain to Ruffin/Thompson


*Figures given in a letter from R/T's lawyer James Pickrell
**Figure taken from Robert Tayloe Ross's letter
***All figures based on city records

For other information on Alfred E. Abiouness:

For more information on Thomas (Tom) Tye: