Judge rules city must honor 6-year restaurant lease for Neptune's Corner

The City of Virginia Beach lost another round in its long and frustratingly unpopular battle to promote development of a 4-star hotel at the corner of 31st Street and Atlantic Ave. when the court denied the city's motion to evict tenants from Neptune's Corner the city acquired as part of the project.

James H. Pickrell Jr., said, "I am very pleased with the judge's ruling today."

Mark D. Stiles, assistant city attorney, said the ruling by Circuit Court Judge H. Thomas Padrick means the city will now have to face a trial on its efforts to break a 5-year  lease with the owners of Neptune's Corner.

Stiles said the city will file an answer to Padrick's ruling next week and after that a trial date to hear the merits of the case will be set.  Had Padrick ruled in the city's favor Friday, the case would have ended there, unless appealed.

The city wanted the property, located at the southwest corner of 31st Street and Atlantic Avenue, for construction of a parking garage to accommodate a planned 4-star hotel across the street.  When the owners wouldn't sell, the city initiated condemnation proceedings, but constitutionality of that action was challenged.

When Padrick, in that case ruled the city's condemnation attempt was illegal, the city then acquired the property by upping the ante and paying the owners $2.45 million.  The city allowed the restaurant, owned by a member of the family that sold the property, and two other businesses to remain in operation pending demolition, at reduced rent.

The restaurant owner had a lease on the property until December 2006.  His attorney, James H. Pickrell Jr., pointed out that Neptune's lease would terminate under threat of condemnation or actual condemnation.  If sold, the lease would have to be honored.   Since this was a sale and not a condemnation, Pickrell alleges, the lease remains in full force and effect. The city disagreed, thus the suit.