Virginia Beach Development Authority delays deciding fate of Pungo housing project for adults with disabilities

Virginia Beach — The Virginia Beach Development Authority will take a month to decide how to best deal with a nonprofit organization that has failed to make good on building a residential complex in Pungo for people with intellectual disabilities.

The development authority might require the nonprofit, Vanguard Landing, to immediately repay a $2.9 million no-interest loan for missing key deadlines for the project.

In a unanimous vote, the development authority said it would take one month to evaluate options before making a final decision on whether to cut ties with the project or give the nonprofit an 18-month extension. The development authority plans to make a final decision during its June 15 meeting.

Virginia Beach’s auditor, Lyndon Remias, discovered that Vanguard Landing had defaulted on its 2014 loan from the development authority by failing to meet certain conditions, such as completing construction of the project’s first residential building by 2019. The nonprofit is not required to begin repaying the loan until 2022.

Remias also concluded in a report that the development authority failed to properly notify Vanguard Landing of these issues and did not try to reclaim the money, as the agreement specifies.

Vanguard Landing plans to create a community where individuals with intellectual disabilities can live and enjoy activities such as gardening and horseback riding. With the money from the loan, Vanguard Landing acquired 75 acres near Princess Anne and Sandbridge roads to develop the $40 million residential community for 185 disabled people ages 18 and older.

In 2016, Vanguard Landing’s executive director, Debra Dear, told The Virginian-Pilot that the organization was ready to break ground in 2017. But, four years later, no construction has occurred, and Vanguard Landing submitted site plans to the city for the first time about a month ago, according to Eddie Bourdon, a lawyer hired by the nonprofit’s board.

Today's Top Stories

Daily

Start your morning in-the-know with the day's top stories.

Bourdon blamed the delays on new city stormwater regulations that were put in place after a neighborhood in Pungo flooded during Hurricane Matthew in 2016.

Vanguard Landing held off on submitting site plans until after those regulations were finalized, Bourdon said.

The nonprofit has applied for a loan with Virginia Housing but it won’t be finalized until the site plan is approved by the city, which could take more than one year, he said.

Bourdon also told the development authority that Vanguard Landing has greater than seven figures in the bank, and pledges also greater than $1 million.

Remias, however, said he did not see that amount of money in Vanguard Landing’s bank accounts when he was given access to the group’s financial information. As of Feb. 25, Vanguard Landing had $274,000 on hand, according to month financial reports provided to Remias. In March, the expenses exceeded the revenue, Remias said. Unless there’s an account the organization did not turn over to the auditor’s office, Remias said, “they are no where close to seven figures in their account.” The organization’s only capitalized asset is the land, which is estimated to be worth $4 million, Remias said.

“The revenue they are bringing in on a monthly basis is barely enough to cover monthly expenses,” Remias said.

Alissa Skelton, 757-995-9043, alissa.skelton@pilotonline.com