Norfolk Seawall State Funds Contingent on HeadWaters Casino Opening

Posted on: December 22, 2023, 10:20h. 

Last updated on: December 26, 2023, 11:27h.

Norfolk will soon begin construction on its $2.6 billion project to better protect the city from coastal flooding caused by nor’easters, hurricanes, and other significant weather events. The federal government will bankroll the bulk of the project, with state and city funds accounting for 35%, or an estimated $910 million.

Norfolk casino seawall Glenn Youngkin
Virginia Gov. Glenn Youngkin (R) is willing to provide additional state funds to Norfolk for the construction of its coastal protection project. However, the money will only come after the city opens its HeadWaters Resort & Casino. (Image: AP)

In introducing his budget this week, Virginia Gov. Glenn Youngkin (R) surprised Norfolk officials by including an additional $21 million in state funds allocated for the city’s Coastal Storm Risk Management Project. The $21 million is in addition to nearly $74 million that Youngkin’s administration already set aside for the infrastructure undertaking.

A condition of the added money, however, is that Norfolk will only receive the funds after the city’s casino finally opens. Norfolk voters during the November 2020 election signed off on a more than $500 million commercial casino resort pitched by the Pamunkey Indian Tribe in partnership with billionaire Jon Yarbrough.

The destination will be called HeadWaters Resort & Casino, and will be built along the Elizabeth River, adjacent to the city’s Harbor Park Minor League Baseball stadium.

The tribe and Yarbrough this week unveiled a new blueprint for the casino resort that moves the development a bit inland from the river. Jay Smith, a spokesperson for the project, told that the change is because of the seawall project.

Norfolk Casino Concepts

The Norfolk Coastal Storm Risk Management Project is a collaboration between the city and the U.S. Army Corps of Engineers. The multiyear project includes developing and implementing storm mitigation through structural barriers like levees, living shorelines, pump stations, and seawalls.

The Infrastructure Investment and Jobs Act signed by President Joe Biden in November 2021 kickstarted the project with $400 million in federal funds.

Youngkin is willing to dedicate more state funds to help Norfolk cover its project share. But he first wants to see HeadWaters open. The project has been repeatedly delayed because of design setbacks.

The tribe initially proposed opening a temporary casino inside Harbor Park during the construction of the resort on the stadium’s approximately 13-acre parking lot.

Legal concerns, however, were raised, because the Virginia statute that allowed Norfolk to ponder a commercial casino mandates that a temporary casino only operate “at the same site referenced in the referendum.” During their 2020 referendum, Norfolk voters approved a casino “on property east of Harbor Park Stadium.”

The project then pitched a phased development. But city officials fired back at that time line on demands that they want the full resort built concurrently with the casino.

Smith said because of the seawall project, HeadWaters had to again amend its blueprint. The project would be built from the north to the south, with the casino first opening as the hotel and resort amenities are finalized.

Casino First, Money Second

Youngkin didn’t mention the Norfolk seawall in his budget address. But specifics of the $21 million in surplus money for the project were detailed in the 669-page spending plan.

Youngkin said in addition to the $73.85 million set to be allocated to Norfolk’s Coastal Storm Risk Management Project next year, the city can receive additional funds.

The Secretary of Finance is authorized to provide an additional $21,000,000 of state support to the City through a treasury loan to further contribute to the non-federal match, contingent upon the City applying revenues generated by a casino gaming establishment,” the budget reads.

A Youngkin spokesperson told WAVY the casino condition is “to maximize the economic development associated with the Commonwealth’s continued investment of taxpayer resources in the project.”