VIRGINIA BEACH -- A new privately financed $200 million arena at the Virginia Beach Oceanfront would cost taxpayers about $53 million in infrastructure costs. Those numbers as well as other details of the arena plan were released during a media briefing Thursday by city officials and the arena developer, United States Management.
The latest plan would have USM take on all financial and operational risk and get 1/8th of existing hotel tax as well as arena admissions and concessions tax revenues to pay debt service, enter into a 40-year land lease, and the city would keep excess tax revenue after the debt is retired.
The arena could include features that would make the building capable of supporting NBA or NHL teams in the future. However, the city and developers say the facility is not dependent on a professional sports team.
"This facility works, these numbers work without a team." says Virginia Beach deputy city manager Doug Smith. "There are no current conversations with an NBA or NHL team.
Developers say they will work with SMG management, who runs facilities including Washington D.C.'s Verizon Center, to make sure the arena has enough shows and events to be profitable. They anticipate 15-20 major concerts per year, family shows, sporting events, and trade shows.
"This is my hometown, this is our hometown. We aren't here to try and build a facility that will not work. We will make this facility work." said Andrea Kilmer representing USM.
City Council was briefed on the arena term sheet in a closed session on November 18th. The term sheet spells out the responsibilities of each party.
Information released up to this point shows the arena itself would cost $200 million and would be funded entirely by USM.
The city would be responsible for infrastructure, which includes parking, road work, a plaza and utilities at an estimated cost of $53 million. That money will come from a fund that comes from hotel taxes, meal taxes, and franchise fees in the tourist district. The city says no general fund revenue will be used.
Earlier this year, Virginia Beach Deputy Manager Dave Hansen said the cost could be higher -- as much as $100 million. That sum would include expanding parking, re-aligning 17th and 19th streets, reconfiguring the Birdneck Rd. interchange with I-264 and other work to prepare stormwater and sewer infrastructure.
City Council will receive a public briefing on the proposal at the November 25th City Council meeting. A public hearing will be held on December 2nd and a council vote is expected on December 9th. A public meeting with the Arena Committee is set for December 3rd.
Developers say they hope to break ground on the arena in Fall 2015 and open the building in Fall 2017.