Is Resource Bank in Town Center's future; vying for low rent and naming rights?

Reports are that Resource bank, whose largest stockholder is City Councilman Louis R. Jones, is negotiating to be a major tenant at Town Center.  Sources said the bank's headquarters, now scattered among offices over several locations in Virginia Beach, will have the lowest rent and will get naming rights to the building now under construction.

 Louis Jones & Company:  An unholy alliance?  From the City Council to Lotus Creek buyout to Resource Bank

Russell Kirk, Al Abiouness, Dan Hoffler, chairman of the board of Armada Hoffler; and Louis Haddad, president of Armada Hoffler Corp., were members of the partnership of Lotus Creek Associates.  (See:  Chart of Interlocking Relationships).  Lotus Creek had, swampy land for a housing development that the city recently tried twice to illegally broker a deal with the U.S. Fish & Wildlife Service (FWS) to acquire so the city could dodge a lawsuit from bureaucratic bungling of development permits.

After the city's was found in violation of state law on two occasions, the FWS bought the property with tax funds for far in excess of its assessed value. (See:  Chart showing how property sold for much more than assessed value

And City Mis-manager James K. Spore suckered the City Council into voluntarily kicking in $160,000 of city tax dollars to complete the deal.  (See:  Graphic showing area purchased) Abiouness, the managing partner, on the witness stand told the court that the partnership had not and would not make any claims to the city for compensation.  Spore did it anyway.  (See:  Editorial - An illegal deal city couldn't refuse).

Jones found he had to abstain from voting on the deal because it would have been conflict of interest.

"Usually," one source said, "a company pays top dollar (in square footage rent) to get naming rights."

Lawrence Smith, Resource's president, when contacted by Virginia News Source said, "I can't comment on that."  Asked if he could deny the report, Smith said, "No comment."

Smith said Resource has gone from zero square footage to 25,000 square feet of office space in 10 years.  It is considered a statewide bank with full service offices in Virginia Beach, Newport News, Chesapeake, Richmond, & Herndon.

One source close to the situation said Resource had bought property for construction of a new headquarters office off Bonney Road, just east of the Clarion Hotel.

According to sources,  Jones, Arthur Russell Kirk, and Al E. Abiouness wanted the bank to be headquartered in  the new Town Center office.

All three men are on the bank board of directors and have close relationships.  Jones, the banks largest stockholder,  is the city councilman who negotiated the deal to create Town Center and signed on the builder - Armada Hoffler.  Kirk is the 3rd largest shareholder in the bank and  is president of Armada Hoffler Holding Corp.  Abiouness is the bank's 4th largest shareholder and is the structural engineer for Armada Hoffler on the Town Center project.

Town Center:  
Its own financial center

Town Center, a controversial complex from the start, was carved out of the regular tax base (all  tax increases will go solely to finance the development  for the developers), has been constantly changing in scope, is behind schedule, has lost the luxury hotel designated for the area, has failed to announce the new tenants with jobs, promised if the city would help finance the deal, and has refused to identify who, if any, tenants have been signed.  It appears the tenant base the developers are putting together are more retail shops and simply offices being re-located from other buildings around the area.

Between the three (3) of them, Jones, Kirk, & Abiouness, they own about 18.6% of the bank's stock, enough to exercise considerable influence in the bank's decision in selecting a new headquarters site. (Bank president Smith is the 2nd largest shareholder with more than 150,000 shares of bank stock).

In their last insider share purchases, Jones added 30,000 shares @ $14/share to his portfolio  while Kirk and Abiouness added 10,000 each for the same price.

Other prospective tenants have already complained they are being asked premium prices (reportedly in the $26/square foot plus range) and now Armada Hoffler and the city are discussing cutting the number of parking spaces available to the complex.  One tenant and other developers have said that a project without adequate parking for tenant needs is doomed to failure.

Smith indicated he expected it would be sometime before a decision (that he will discuss publicly) is made on a location for Resource Bank's new headquarters.  The City Council elections are in May and Jones, representing the Bayside Borough, is the only candidate running unopposed and assured of re-election.

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