(The following story by Deirdre Fernandes appeared on The Virginian-Pilot website on December 30, 2009.)
VIRGINIA BEACH, Va. — The city will be a crucial step closer to owning the land for a possible light-rail project Wednesday, but the final deal likely won’t close until sometime next year.
Virginia Beach’s long-anticipated purchase of the 10.6-mile Norfolk Southern right of way has been slowed by the down economy and complications in receiving state and federal money, city officials said.
The final closing was initially planned for the end of this year.
The city, state and Hampton Roads Transit all agreed to contribute to the $40 million purchase price of the land. Under a deal announced in March, the city pitched in $10 million, the state gave $20 million, HRT put in $5 million and the remaining $5 million came from easement payments.
But the state hasn’t issued the transportation bonds for its share, because it doesn’t have all the money to pay off the debt service, said Virginia Transportation Secretary Pierce Homer.
“We can’t spend money that we don’t have,” Homer said.
However, he expects that the bonds will be issued in the coming months.
HRT is waiting for the federal budget to be finalized before it can access the grant money.
Virginia Beach will put its $10 million into an escrow account Wednesday and sign the initial closing documents, Mayor Will Sessoms said.
The city has received letters of assurance from both the state and HRT, Sessoms said.
But if the money isn’t together by Sept. 1, the deal would be off. Virginia Beach would get its $10 million back, though the railroad company can keep any of the interest earned on the money.
“I’m very happy where we are today,” Sessoms said. “But I’ll be opening a bottle of champagne upon receiving the money from the state and HRT.”