The Norfolk Airport Authority canceled a deal with a development team to build a 168-room on-site hotel at the Norfolk airport, delaying the project, after an airport leader said the developers violated a contract.
However, the lead developer denied the allegations and said the contract was never breached.
Norfolk Airport Authority CEO and President Mark Perryman said the contract was terminated after airport leaders discovered one of the project developers had pulled out of the project and the remaining partner failed to immediately notify the airport.
“This is going to put us a couple years behind,” Perryman said about the decision.
The Norfolk Airport Authority board of commissioners voted in 2023 to move forward with negotiations to build the hotel at Norfolk International Airport, planning a Courtyard by Marriott with a rooftop bar. Around two years ago, the Airport Authority signed an agreement with a development group that included Virginia Beach-based LTD Hospitality Group and Arizona’s Caliber Cos., a real estate investment firm, according to Perryman.
A rendering of the hotel design originally proposed at the Norfolk Airport. The Norfolk Airport Authority has terminated a contract to design and build an on-site hotel, saying a developer breached the contract. The developer denies the allegation. (Handout Rendering / Norfolk Airport Authority)
Development progressed until Perryman said he heard a rumor last fall that Caliber had left the development team. Perryman said LTD was evasive at first, but the Airport Authority was eventually able to confirm Caliber had left the project.
Perryman said he then gave LTD a 60-day cure period to attempt to get Caliber back on board the project. When that failed, Perryman sent a letter to LTD letting the company know the Airport Authority was terminating the contract.
In an interview, LTD Hospitality Group Managing Principal Neel Desai denied that the contract had been breached, saying Caliber was never a legal part of the development partnership. Rather, he said Caliber was part of the group that responded to the original request for proposals for an airport hotel. Desai said the development could have proceeded without Caliber, and said LTD had already spent around $1 million on design and other preliminary work.
Desai said he believed the Airport Authority was leaving the deal to develop the project on its own.
“We were trying to do what’s best for the public and for this region,” Desai said.
Airport spokesperson Chris Jones said the Airport Authority declined to respond to the Desai’s comments.
Moving forward, Perryman confirmed the airport is looking into developing the project itself, then having a third party operate the hotel, much like what currently happens with food and retail at the airport. Perryman said it was too soon to tell how much costs would increase by the delay.
He said the Airport Authority plans to contact an architect and consultant later this year and try to break ground in 2026.
The setback comes as the airport has seen a surge in passengers. The airport saw its busiest month ever in July, with more than 500,000 passengers. Roughly 2.8 million people have used the airport this year through the end of July.
Trevor Metcalfe, 757-222-5345, trevor.metcalfe@pilotonline.com
