Contaminated water drives costs up again for Atlantic Park project as developer, VB disagree on who should pay

VIRGINIA BEACH, Va. (WAVY) — There is hope that construction on the more than $350 million Atlantic Park Project will continue in full swing next month when new equipment arrives to treat contaminated water.

Since late September, groundwater at the 2.67-acre surf lagoon hasn’t been able to be removed after it was discovered that high levels of iron was being pumped into nearby Lake Holly in the process.

“A brownish tint and film” on the water’s surface was observed by both city crews and Department of Environmental Quality personnel. The latter issued a warning letter to the Atlantic Park development team.

“The discharge from the facility has altered the physical properties of state waters at Lake Holly,” according to documents obtained using the Freedom of Information Act, “with the lake observed with rust colored water and solids. This is prohibited by State Water Control Law.”

VB Atlantic Park, despite construction challenges, still on track to open in 2025

While the minerals are naturally occurring, the remedy to the issue has been anything but.

Mike Culpepper, manager for Venture Waves LLC, which is a partnership that includes Virginia Beach native and musician Pharrell Williams, said new equipment is on its way that will work to filter the groundwater: a sand filter and clarifier filter.

“We hope to be able to continue with the dewatering process next month,” Culpepper said.

However, what has been a point of contention is who should pay for it.

The development of Atlantic Park is the largest public-private partnership in the history of the city of Virginia Beach.

The more than $350 million mixed-use entertainment district will include an up to 5,000-seat indoor/outdoor concert venue, apartments, office space, restaurants and retail space. It will all be anchored by a first-of-its-kind surf park in the United States.

Known as the former “Dome site” between 18th and 20th streets between Pacific and Baltic avenues, the 12 acres is owned by the Virginia Beach Development Authority.

Culpepper thinks that is why it should be the city that pays for what could be an extra $1 million cost to remove the groundwater.

However, the city, which has already pledged more than $150 million for the construction of the entertainment venue, parking garages, streetscape improvements and infrastructure upgrades, feels this is the developer’s cost to bear.

Deputy City Attorney Chris Boynton said the developer knew the soil conditions going back to 2019, and that the issue was never brought to the city’s attention during the due diligence phase.

“At this point, the developer has agreed to front the costs and reserves the right to try and recoup them later,” Boynton said.

Atlantic Park is still set to open sometime next year.

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