Published April 25, 2005  - Inside Business - Hampton Roads

A new view: Chamberlin will morph into
  retirement  community

By Philip Newswanger

After juggling negotiations with the Army Corps of Engineers, a buyer and seller, a bankruptcy court, the Under Secretary of the Secretary of Army, the commander of Fort Monroe, the seller’s lender, attorneys and the Virginia Department of Historical resources, Tom Waltz was able to sell the Chamberlin Hotel and consummate a ground lease with the federal government for the property.

For his 20-month effort, Waltz, director of commercial sales and leasing for Drucker and Falk LLC, was honored last month for having one of the significant transactions of 2004 by the Virginia CCIM chapter at its fourth annual conference. CCIM stands for Certified Commercial Investment Member, and is a certification earned through the CCIM Institute.

“There were a lot of equal hurdles,” said Waltz, whose office is in Newport News. “Once we got on the same sheet of paper, it was a fairly smooth negotiation. The first step was getting everyone on the same page.”

Less than 60 days after Waltz was named the listing agent, the Chamberlin’s owner declared Chapter 11 bankruptcy. Since the Chamberlin sat on government property, there was a lease between the Army Corps of Engineers and the owner. When the owner went insolvent, the lease was null and void. To sell the property, though, a new lease had to be negotiated. But any change in the lease had to be approved by the General Assembly.

Waltz also had a tough time selling the property. It had been shut down since 9/11 and it suffered from neglect and Hurricane Isabel’s fury.

“When conducting property tours, I mentioned that this property is a lot like the Clint Eastwood movie ‘The Good, the Bad and the Ugly,’” Waltz said. “The good: the beautiful views. The bad: a lot of transaction hurdles. And the ugly: all of the deferred maintenance and neglect.”

But it occurred to Waltz that perhaps the marketing push needed a new angle since he realized that the 280-room Chamberlin, built in 1928, could no longer serve as a hotel.

“The light comes on one day as I am at the property,” Waltz said. “Why not turn the guard at the gate into a positive and re-market the Chamberlin as a gated community like no other? Rehab the property as a retirement community focused on military retirees and utilize the available tax credits.”

Waltz said that it took awhile for the Army Corps of Engineers to have a warm and fuzzy feeling about negotiating a new lease with new owners. There were numerous drafts and trips to Washington, D.C., to meet with government officials.

“There was a whole lot of negotiation,” Waltz said. “We certainly spent enough time with.”

Finally, the deal closed in November 2004. The sales agreement had eight addendums and went through nine working drafts but was able to close on its scheduled date, Waltz said.

Investors associated with Drucker & Falk bought the property and plan to convert it into an independent-living retirement community, focusing on military retirees.

The cost of acquisition and renovation will exceed $50 million, according to Waltz, who said it will open during the winter of 2006.

The group will renovate 130 rooms in the existing Chamberlin and will build 36 assisted living units in a new tower, with another 40 independent living units on top of a new parking lot.

When putting together this deal, Waltz was amazed at how many people had a memory or connection to the Chamberlin.

“There are very few people in Hampton Roads who don’t know the Chamberlin,” Waltz said. “It’s a mystical place. The views are unbelievable.”
 

Copyright ©2005 Inside Business - Hampton Roads