The History of a Bad Deal

Care4Suffolk — Wed, 06 May 2026 15:24:32 +0000

Let me tell you a story about a curious plan in the heart of Suffolk. The plan started with the City receiving a piece of property as a gift. It was a property with an old building on it that needed a LOT of work. Instead of improving this free property, the City sold it to a company for an amazingly low price. The company promised to renovate the building to modern office space standards and, as part of the deal, the City agreed to rent the building back again because they were in need of office space for the Suffolk Public Schools (SPS) administration.

Does any of this sound familiar? If you were following the recent Riversbend rezoning project, it probably rings a bell because part of that rezoning application included the developer giving the old VDOT administration building to the City of Suffolk for use as new SPS administrative offices. When trying to convince the school board to support this plan, City Manager Kevin Hughes explained that the building would then most likely be turned over to a different developer who would modernize it and then lease it back to Suffolk Public Schools for a period of 10 years.

Despite the similarities in these two scenarios, this story is not actually about the Riversbend project. It is about something that happened back in 2002: how the SPS offices ended up where they are now.

For some background, the SPS Administrative Offices are currently housed in a downtown building at 100 North Main Street, called the Professional Building (also known as the American Bank and Trust Company building.) They have been in this location since March 2003.

During the Riversbend rezoning, we heard multiple city leaders like City Manager Hughes, Council Member Rector, Council Member Ward, and Superintendent Gordon state that there are serious issues with the Professional Building.

Council Member Rector (Suffolk Borough) speaking about the Professional Building at the City Council Meeting on December 17, 2025.

Council Member Ward (Nansemond Borough) speaking about the Professional Building at the City Council Meeting on December 17, 2025.

According to the reports, the HVAC doesn’t always work, leaving staff to deal with high temperatures and elevators that frequently don’t work in a building with seven floors. Additionally, when it rains, water can be heard running down the walls. That definitely sounds far from an ideal work location.

During the February 9, 2026 Education Committee meeting, while discussing problems with this building, City Manager Kevin Hughes stated, “He’s not the greatest landlord,” as if that excuses the horrid office conditions for the employees that work there. It is understandable that the SPS would not want to continue in that location, but how did they end up there in the first place?

The Professional Building has an interesting history when looking at the change of possession.

Here is the property card from the City’s website:

Here is the history of transfers:

The Sale #5 states 01/01/1900, but the city has that date for each record entered into the system when they began to process these records electronically.

You can see that the building was gifted a total of three separate times. In Sale #4, the building was gifted to the Western Tidewater Community Service Board in 1994 from Holland and Jackson Incorporated. I wasn’t able to find any information about the corporation that gifted the building, except by word of mouth that the Jackson party was Mr. G. Phil Jackson Sr. The property was previously conveyed to Holland and Jackson Incorporated back on February 1,1963 from The American Bank and Trust Company.

Less than a year after it was given to the Western Tidewater Community Service Board, the building was again gifted, this time to the City of Suffolk in 1995. That’s right – the City used to own the Professional Building at 100 North Main St. The City held onto the building until March 28, 2002 and then gifted it, along with the two adjacent buildings: 120 and 122 East Washington Street. (pictured below from Google Maps)

These three buildings were gifted to the City’s own Economic Development Authority Board (EDA), which was called the Industrial Development Authority at the time.

Just a year later, on February 27, 2003 the EDA sold these three prime downtown commercial buildings to 100 North Main LLC for the bargain price of $100,000.

Interestingly, 100 North Main LLC was created on September 6, 2002, just five months before it purchased these three buildings from the EDA and just six months after the EDA received the land from the City. This company was set up specifically to purchase and maintain these properties.

There are two names that have been found connected with the 100 North Main LLC. The first is Frank T. Gadams, also known as Buddy Gadams, who signed the first lease listed as Managing Member of 100 North Main LLC. The other name is Michael P. Zarpas, who signed the second lease as a “Member” of 100 North Main LLC.

The purchase agreement is dated September 16, 2002, just 10 days after the formation of 100 North Main LLC. Along with the purchase agreement between the EDA and 100 North Main LLC, there was a lease agreement.

This lease agreement, dated March 7, 2003, was between the 100 North Main LLC (Landlord) and the City of Suffolk (Tenant). The Lease stated the reason for selling the building was to revitalize the Downtown Historic District and provide office space for the administrative offices for the Suffolk School Board.

It was “determined that the Project would not be economically feasible without the commitment of Tenant.”

The lease agreement included an eleven-page “Schedule D” entitled “Landlord Work” that detailed all the work that needed to be done to bring the building up to modern office standards. These items included landscaping, electrical work, roofing, insulation, doors, framing, acoustic ceiling, interior demolitions, asbestos and lead paint abatement, just to name a few. In all, there was about $3 million in renovations listed.

At this point, you might be thinking that this was a good deal for the City, because $3 million is a LOT to spend on renovations. However, take a look at this excerpt from the contract:

According to this, the Landlord (100 North Main LLC) only had to pay up to $233,600 of renovation costs, and then the Tenant (City of Suffolk) had to pick up the rest!

How was this a good deal for the City of Suffolk? After the Landlord put up the $100,000 (which was for three buildings, remember!) and $233,600 in renovations, he was only in for $333,600 and the City had to pay for the majority of the work!

Remember: It was “determined that the Project would not be economically feasible without the commitment of Tenant.” What a lucky Landlord to get a Tenant to pay both rent and the extraordinary renovation costs!

So how much did the Landlord make in rent? It averaged just under $30,000/year for the first 10 years (length of first lease) for a total of $298,416.25. Then in the 11th – 20th years it averaged about $434,000/year for a lease total of $4,338,488.80. The years 2024-2026 include rent in the average amount of $470,000/year for a total of $1,410,280.

By the end of this year, the City of Suffolk will have paid in total $6,047,185.05 in rent for this building that it previously owned. This does not include any renovation costs the City paid for, which we are still investigating.

This was a horribly conceived plan. It’s a good thing the Riversbend rezoning application failed, because thanks to our City Manager Kevin Hughes, we were about to repeat this horrible mistake. That was a close one!

Documentation:

Industrial Development Authority – Care4Suffolk

The History of a Bad Deal