Virginia Beach scoops up Oceanfront Dairy Queen property for more than $12 million

Without any public fanfare late last month, the city scooped up a critical piece of property at the Oceanfront.

Virginia Beach bought the Dairy Queen and the adjacent 17th Street Park for a whopping $12.8 million. Public restrooms on the site next to the Boardwalk are also included in the deal.

The money was allocated last spring for “resort area site acquisition” in the city’s fiscal year 2023 budget. The capital improvement program item was earmarked for “preservation of the 17th Street Park and improvements.”

The budget was originally going to include a larger pot of money — $45 million — for additional resort-area land purchases, but the City Council walked that amount back when residents questioned it. The Dairy Queen site, however, made it into the final draft.

The city had leased the public park since 1995 from Richard Maddox, whose family has owned the land since the 1960s. Live performances are held on the park stage throughout the summer.

Maddox is now leasing it back from the city for $100,000 a year and will continue to operate the ice cream shop. Under the terms of the new agreement, Dairy Queen can remain for five years, and Maddox has the option to renew every two years.

“I can’t pump ice cream forever,” he said by phone Thursday.

Maddox, a former City Council member, announced earlier this year that he wanted to sell the land. Under the original lease agreement, the city had the first right of refusal if he got an offer from another entity.

The land was home to a motel for decades before the Maddox family razed it and paid $1.2 million to develop the park, which they then leased to the city in 1995.

That same year, Maddox built the Dairy Queen, and it became the brand’s highest-grossing store in the country.

Stacy Parker, 757-222-5125, stacy.parker@pilotonline.com