NORFOLK, VA. -- Officials are considering a $15 million revenue bond sale to refinance the debts of the Waterside in Norfolk and to build a 60,000-square foot second phase of the popular tourist attraction.

But Norfolk officials aren't moving too fast just yet.

In an effort to get the best possible interest rate, city finance experts are going to spend the next 60 days analyzing the unstable bond market before making a decision.

"There's no question we can sell the bonds," Mayor Joseph Leafe said Friday. "The question is whether we can sell them at an interest rate that will make all our figures work."

"If the decision to sell the bonds comes within the next two months, Leafe said, ground could be broken on Waterside II by this fall. The development could be open by summer 1989.

"Nine percent {interest rate} would be our objective," said Evan Becker, Norfolk Redevelopment and Housing Authority assistant director for development. "We're not going to have too much latitude as far as interest rates are concerned. We're probably going to need some help to attain that, from the market."

City council members recently gave the housing authority permission to examine the market.

If the authority can find an interest rate between 9 percent and 9.75 percent, Leafe said, the taxable bonds would be sold to repay $2.5 million in outstanding bank debts and cover Waterside II's development.

Most of the proceeds from the sale, $11.5 million, would be used to finance the construction of Waterside II.

Another $2.5 million would be used to pay back money borrowed from banks to finance part of the current Waterside's $13.8 million price tag, Leafe said.

The rest would go to cover landscaping and other costs.

Although Waterside is behind schedule on its loan repayments, Becker said, it is not losing money. He said the shortfall results more from faulty predictions made before the center opened.

"It's not losing money," he said. "It's paying its debts, but at a lesser rate."