​Cavalier Hotel

​The original Cavalier Hotel was built in 1927. It is a Virginia Beach icon, like the Cape Henry Lighthouse, Town Center and King Neptune – a charming, graceful symbol of the city’s early resort days.

Cavalier HotelThe Cavalier Hotel is a special place in Virginia Beach. Located in the Virginia Beach Resort Area, the Cavalier actually consists of three separate properties: the 115 room Cavalier on the Hill (built in 1927), the contemporary Cavalier Oceanfront and Beach club, a 282 room beachfront hotel dating to 1973, and a third parcel that was used as a parking lot as well as tennis courts.

The Cavalier on the Hill was a major player in Virginia Beach’s original resort scene. Nine U.S. presidents stayed at or visited the Cavalier. So did celebrities like Judy Garland, Bette Davis, Frank Sinatra, Benny Goodman, Glenn Miller and Scott and Zelda Fitzgerald.

In 2012, a judge ordered the hotel complex to be sold. Subsequent inspections revealed significant concerns about the property’s structural condition, as well as the relative obsolescence of its amenities. The inspections also reflected high cost estimates for renovations, which created concern that the historic Cavalier on the Hill would be demolished.

Following a series of public meetings and upon the recommendation of a City Council-appointed citizen task force, Virginia Beach City Council expressed its strong support for restoring the Cavalier on the Hill, and preserving key elements of its landscape, by endorsing a series of incentives to be available for anyone who bought and preserved the landmark hotel.

In 2013, after an open bid period of several months, the court approved the proposal submitted by Virginia Beach developer Bruce Thompson and his company, Gold Key/PHR to acquire all three of the Cavalier properties. Since then, the company has been working with the City and local stakeholders to create a master development plan that would provide for the preservation of the Cavalier on the Hill and maintain key elements of its historic landscaping, while also allowing the redevelopment of the oceanfront properties.

Frequently Asked Questions

Why should Virginia Beach help save the Cavalier Hotel?
Tourism is the city’s second-biggest industry. It generates $1.28 billion a year, and $102 million in city and state taxes. More than 12,000 jobs are tied to Virginia Beach tourism. About 5.9 million overnight visitors come to our city every year, plus 6.8 million day visitors. Virginia Beach would be a poorer place – literally and figuratively – without tourism.

But this doesn’t happen by itself. Virginia Beach, like any tourist destination, needs new attractions and hotels to keep drawing visitors and conventions. A series of public meetings and reviews by City Council and the Citizen Task Force revealed a strong level of support for municipal participation in the Cavalier Hotel project.

Who is the developer?
Cavalier Associates LLC, which includes local Virginia Beach investors and businessman Bruce Thompson and Gold Key/Professional Hospitality Resources. 

What does the developer own?

A total of 21 acres, including the old Cavalier on the Hill at Pacific Avenue and 42nd Street, the newer Cavalier Oceanfront hotel on Atlantic Avenue at the Beach, and the surrounding property.

How much is the developer investing?

$260 million

What is the plan?

There are three pieces to the Cavalier Hotel project:

  • Restore the Cavalier on the Hill hotel. Construction has begun. It is scheduled to open in 2016.
  • Demolish the Cavalier Oceanfront hotel on the beach and build a modern 300-room hotel in its place. It is expected to open in 2017.
  • Build 82 new homes on the grounds of the Cavalier on the Hill, while preserving the historic entrance and lawn facing Pacific Avenue.

Besides the old hotel itself, will anything else be preserved?

Yes. The expansive front lawn on Pacific Avenue, with the iconic Cavalier name, and the Cavalier Drive entrance with its old serpentine walls will be preserved. A permanent easement has been placed on these elements so they can never be built upon.

Is the city paying for any of this?

The City Council in 2013 granted a series of incentives to the developer to help preserve the Cavalier on the Hill, totaling $18 million, to include:

  •  $8.2 million in a performance-based economic development incentive grant
  • $2.37 million for a green space easement over the lawn and entrance drive, so they can never be developed
  • $2.449 million to rebuild Cavalier Drive, a public street
  • $5 million rebated from taxes collected on the increased value of the hotel properties

Why is the city paying for part of this?

After a series of public discussions, City Council made the strategic policy decision to incentivize the preservation of the Cavalier on the Hill.  Because of the extensive renovations required, cost estimates for restoring the Cavalier on the Hill into a viable, tax revenue-generating hotel property were viewed as prohibitive by potential new owners.  Public participation was deemed necessary to preserve the historic structure and landscape of the Cavalier on the Hill.

The investment will provide financial returns for the city. Projected new tax revenues from the Cavalier project will exceed the public investment over time. City incentives to the developer total $18 million. The project is expected to generate approximately $41 million to $52 million in new taxes in the first 20 years. It also is expected to create 200 year-round jobs and 330 seasonal jobs.

The public investment plan was designed to protect legitimate public interests:

  • The economic development performance grant requires the developer to meet certain thresholds of investment. It is based on the number of jobs created and the amount of private investment in the project.
  • The green space easement preserves in perpetuity an important and historic landscape in the heart of the city’s resort area
  • The rebuild of Cavalier Drive will be a significant improvement to a public street
  • Tax rebates will be generated solely by the project itself

Will any of this $18 million come from city services or projects?


  • The $8 million economic development incentive grant comes from a program that’s dedicated to attracting new jobs and businesses. It is funded entirely by cigarette taxes.
  • The $2.37 million to save the lawn and entrance comes from the city fund dedicated to preserving open space.
  • The $2.449 million to improve Cavalier Drive comes from the city’s site acquisition fund.
  • The $5 million comes from future taxes generated by the Cavalier project itself – taxes that wouldn’t exist otherwise.

Are there any other public incentives?
Yes. In July 2014, the state approved $18 million in special financing to help restore the Cavalier on the Hill and create a new resort destination in Virginia Beach. The money will come from taxes generated by the project itself, once it is complete – 1 percent of state sales taxes generated at the Cavalier, 1 percent of city sales taxes there and an equal contribution from the developer.

Does any of that money come from Virginia Beach taxpayers?

Only if you eat at or stay at the Cavalier Hotel. This is new sales tax money that would not exist without the Cavalier project. This captures some of those new taxes to help pay for the project’s financing.

How can I stay up to date on the project?

The city will regularly update this website with details of the city’s part of the project – roads, utilities, etc. In addition, the developer has its own website for the project at www.thecavaliercollection.com

The termsheet is available for download.​