NORFOLK, Va. (WAVY) — Norfolk’s Economic Development Authority (EDA) is exploring a new way to take down the old Military Circle Mall before the site’s ongoing needs takes out all of their cash.

In the authority’s monthly meeting Wednesday, the property manager explained how the mostly shuttered shopping center will continue to cost the EDA tens of thousands of dollars annually. The buildings still need electricity, security, water and and insurance as long as they stand.

Initial plans to begin leveling the site have been held-up by the mall’s last remaining retailer: Ross Dress for Less. The mini-anchor, whose lease is up in 2026, has veto power as part of an old operating agreement that governs the property.

Their is hope that presenting a more phased demolition approach, may be able to get the wrecking ball “rolling.”

“We’re looking at taking it to a phased process where we’ll take down the Cinemark, the Sears building and the Sears Auto initially,” Tami Simonds, with Divaris Property Management, said.

It’s estimated that taking down those three sections of the 935,000 square-foot property will cost just under $1.5 million.

At the same time, Simonds proposed an asbestos abatement for the property constructed in the 1970s. It’s estimated this will cost $3.6 million.

“We are currently working through putting together an RFP, a request for proposal,” Simonds told authority members. “Once that goes out, then it’ll be about 60 to 90 days before demolition can start, if everything goes smoothly. So we hope that we can start phase one by May 1 of this year.”

The authority, which has its members appointed by Norfolk City Council, first purchased the majority of the mall property for $13.4 million in 2020, with the eventual plan for redevelopment.

At the time, the 50-year-old mall was operating at a yearly $400,000 deficit, with an increasing vacancy rate.

The EDA was able to break even without real estate tax payments, and the city was actively entertaining plans to transform the area with a new regional arena or other entertainment anchored development.

But by 2023, talks had long stalled, and the proposals eventually shelved. The EDA made the call to have the mall close by Feb. 2023 in order to try and prevent a $1.3M operating deficit.

The only businesses that remain in the main mall building now are Ross and Sentara. The later of which is not an EDA tenant, as Sentara owns the former JCPenney box store.

While the EDA and Norfolk City Council are now actively exploring a new redevelopment plan, possibly centered around housing an ice rink for sports tourism, no concrete plans are in place.

The EDA, which is a political subdivision of the Commonwealth of Virginia, doesn’t receive a steady stream of taxpayer dollars to operate. Rather, a majority of its income comes from selling and leasing real estate.

Last year, the authority chair warned City Council that their money to throw at the site could be gone in a year-and-a-half if nothing changes.

“We are still running negative every month, but we’re doing everything we can to keep all of our expenses down,” Simonds said. “We’ve discontinued gas to the property. We had an opportunity to sell boilers and switch gears, which gave us an income of $57,000, which is wonderful.”

Still, the EDA will have lost nearly $23,000 on property in the the second half of last year. Its estimated the property will lose an average of $13,000 each month.

Michael Paris, the assistant director for Norfolk Economic Development, said the EDA still has a little more than $700,000 remaining as part of its settlement with Cinemark to use on the losses.

Economic Development Director Sean Washington confirmed efforts are still underway to try and find a new space for Ross.

Nonetheless, there is also the opportunity for new revenue streams ahead of redevelopment.

Washington confirmed he, as well as Simonds, are negotiating to lease parking lot space to Norfolk Casino developer Boyd Gaming for off-site construction parking.

Even though the casino site is five miles to the West, parking in the Harbor Park area is extremely limited.

“We think this would be a great alternative to leverage some of the extra space that we have,” Washington said.

The potential revenue could be $65,000 annually.