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Real estate, development boom reawakens Cape Charles; 'Eco-industrial park,' 2,000-acre golf resort fuel town's resurgence

THE BALTIMORE SUN

CAPE CHARLES, Va. -- More than a century after two railroad men from up north put the place on the map -- literally -- the future is beginning to look a lot like the past in this bay-front town near the southern tip of Delmarva.

"For Sale" signs are sprouting on residential and commercial properties, and newcomers are snapping up second homes, investment properties and rentals so fast that local real estate agents can barely keep up.

There's not a block among the perfectly square 644 lots laid out in 1883 by New York, Pennsylvania & Norfolk Railroad executive William L. Scott that hasn't attracted interest.

Isolated for years by a $10 one-way toll to make the 30- to 40-minute trek across the Chesapeake Bay Bridge-Tunnel to Norfolk, Virginia Beach and other Hampton Roads cities, the southernmost town on the Delmarva Peninsula is no longer a secret.

Cape Charles' pristine Chesapeake Bay beach and stately late-Victorian homes are drawing increasing numbers of well-heeled investors looking for weekend getaways, says Kim Starr, a New Jersey native who first came to Virginia's Eastern Shore 15 years ago.

The weekenders are coming not only from the Hampton Roads area, about 25 miles away, but also from Baltimore, about 205 miles away.

"People say that the bridge-tunnel toll is our serenity tax," says Starr, who is married to six-term Town Councilman Frank Wendell. "It has kept us from becoming a bedroom community of Virginia Beach. But more recently, people have discovered that despite the toll, we have the benefit of living in a small town that's just a hop, skip and a jump from a major metropolitan area -- the best of both worlds."

Investors willing to take a chance have found Cape Charles a good risk, Starr says, citing a Charlottesville, Va., couple -- both lawyers -- who bought two small homes for about $83,000, then sold them for $132,000 in just a few months. The couple used the profit to buy a second home close to the town's public beach.

After decades of decline that left Cape Charles a ragged shell of the booming rail, steamship and ferry hub that once was the Virginia Shore's most important town, business and community leaders say their newfound optimism is fueled by more than a surging real estate market.

The bed-and-breakfast inns, restaurants and shops that have opened in the past few years have provided a boost, merchants say. But it is an innovative "eco-industrial park" and a nearly 2,000-acre golf course community, conference center and resort that will soon lift Cape Charles and Northampton County -- one of Virginia's poorest -- into prosperity not seen since the town's pre-World War II heyday, supporters say.

"When you consider all the years we have fought for economic development, this is amazing," says Mayor E. A. "Alex" Parry III. "Ten years ago, Cape Charles was practically a ghost town, and now we're looking at tremendous potential for employment and tourism."

But in Cape Charles' northeast section, community activists worry that longtime residents, many of them elderly and poor, will be forced out of their homes as investors buy rundown rental units, rehabilitate them and raise rents.

Lenora Mitchell and other members of Concerned Citizens of Cape Charles say that many residents have been living in sub-standard housing and have few options if rents continue to increase. In Northampton County, where 10 percent of 13,000 residents lack indoor plumbing, decent low-income housing is scarce.

"This town has been dead for 20 years or more, and we recognize that change had to happen." Mitchell says. "But nobody realized that change would come so quickly. When we look at what's happening, we can see this isn't going to be a place for poor people."

Last week, officials announced the arrival of the first tenant at the industrial park. The 200-acre park, which began five years ago with a federal grant from the President's Council on Sustainable Development, is designed for energy-efficient, water-conserving, non-polluting industry.

Eventually, economic development officials hope, the park will include nearly 800,000 square feet of manufacturing and research-and-development space for firms that will provide much-needed jobs for impoverished and rural Northampton County, without damaging the fragile environment near the mouth of Chesapeake Bay.

"What we're really talking about here is industrial ecology, where the waste product of one industry becomes the raw material for another," says Tim Hayes, the industrial park's director. "The idea is that we can create jobs without sacrificing the environment. I suspect a lot of people thought that maybe this was a little too visionary, but it is becoming a reality."

By summer, Energy Recovery Inc. will be working in the first 30,000-square-foot building put up by the town-county industrial park authority that is marketing and managing the project. The 6-year-old firm manufactures pressure exchange pumps used in desalinization, the process of turning salt water into fresh water.

The company plans to hire 50 workers, virtually all of them at wages above the $23,000 median family income in Northampton County.

Town leaders say the golf course project being built by Virginia Beach developer Richard S. Foster will have a double benefit -- providing hundreds of jobs and pumping millions into the local economy as people visit the resort.

Foster's Baymark Construction Corp. plans to build an Arnold Palmer signature golf course and another designed by Jack Nicklaus. The development will include a 200-room hotel, a marina, nearly 120,000 square feet of commercial space and half a dozen swimming pools.

So far, county land records show only a small portion of the property has changed hands. Brown and Root Inc., a Houston-based company, bought the land more than 20 years ago, planning to manufacture offshore oil rigs. When prospects for East Coast oil exploration went sour, the company spent two years laying the groundwork for a lavish golf course development, but abandoned the plan.

Baymark officials will not say how much they will ultimately pay for the property, which was an- nexed by Cape Charles in 1991, but real estate brokers say Brown and Root had sought as much as $12 million.

Over the next 20 years, project manager Thomas Saunders says, the development, which forms a three-sided crescent around Cape Charles, could grow to 3,000 units.

"There's really no way to tell how many units will be built; it's all market-driven, and it depends on how much interest there is in single-family homes," Saunders said.

"What we do know is that the baby-boom generation is coming. Whether the economy is good or bad, the boomers are coming. And it would take some cataclysmic economic problem to prevent them from retiring in style. That's our market."

Town officials hope that rising property values are only one element of the town's improving fortunes. With development of the golf course and the industrial park, new higher-wage jobs should reverse the decline that has seen the town's population drop from 4,500 in the 1940s to fewer than 1,300 today.

"I've seen buildings that have been boarded up for 30 years, almost my lifetime, that are now bustling with commerce," says 41-year-old Town Councilman Frank Wendell, who works in the beverage distributing business that was founded by his great-grandfather before the turn of the century.

"To think that within a few years, we could see the business district restored to the kind of vibrant place I always heard about is amazing," says Wendell.

Pub Date: 2/07/99

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