New Virginia Beach arena?

[mikecubs]

Virginia Beach City Council will hear from developers about $200M arena near Oceanfront

City officials are waiting to hear when the financing will be ironed out for construction of an arena near the Oceanfront.

Today, the private company chosen to build the $200 million venue will update the City Council on its progress and will announce a new source of financing for the project.

United States Management said last year that it planned to privately finance the arena, seating up to 18,000 people, with a $170 million loan from The Export-Import Bank of China and $40 million of private equity. Joel Rubin, a spokesman for the developers, said Monday that they will announce “ a new source of financing for the project.”

The developers have been trying to secure financing since the majority of council members voted in December to let the company move forward with the project.

The city would not take on any debt or spend money from the general fund, but it would funnel tax revenue generated by the arena back to the developers to pay off their debt over 30 or more years.

Mayor Will Sessoms said the developers have been working hard to secure the financing, and he looks forward to hearing an update.

About a week ago, Andrea Kilmer, president of United States Management, said her company plans to close the deal by the end of the summer, with construction starting before the end of the year. The developers set a goal to open the venue by 2018.

The agreement approved by the council gives the arena developers until September to secure the loan and until May 2017 to close on it. The city could also grant extensions on those deadlines if the developers request more time.

The City Council has agreed to give the developers 5.8 acres of land near the Convention Center at 19th Street and Jefferson Avenue. The city plans to provide $76.5 million for improvements to streets, parking and underground utilities nearby.

pilotonline.com/news/government/virginia-beach-city-council-will-hear-from-developers-about-m/article_bef1baa3-ad04-5442-a3c4-f32fe848404a.html

[mikecubs]

An older article from December

Opinion: Virginia Beach's pursuit of NHL team will require taxpayers to step up

Four times over the past two decades, Hampton Roads tried and failed to lure major sports teams. Each bid had its own set of flaws, but there was a common denominator among them all: the lack of a major sports facility.

“You need a building,” said Bob Cavalieri, senior vice president of business development for SMG, a Philadelphia company that manages arenas and works with major sports franchises. “Scope and the Hampton Coliseum are too small, even as a temporary facility. You need a larger building.”

It would appear that a larger building will rise at the Oceanfront in the near future.

Virginia Beach City Council voted 10-1 on Tuesday to approve a deal with United States Management to build a $210 million, 18,000-seat arena. It is slated to open in 2018 and will designed so it can be upgraded to be the home of a major sports franchise.

You can call it the house that Will Sessoms built – the Virginia Beach mayor worked overtime to make sure the arena happened.

The arena finance package is designed to work without a major sports tenant – concerts, religious shows and perhaps college basketball tournaments will be staple events.

But USM officials made it clear at a Town Center news conference on Wednesday that they are determined to attract an NHL team.

Build it and they will come, seemed to be their message.

“We feel confident that this market is right for an NHL team,” said Andrea Kilmer, President and CEO of USM. “We have had discussions with NHL officials themselves about this possibility, about what we are doing. Now that we have our approval, we can certainly pursue that more aggressively.”

USM is composed largely of Virginia Beach natives who hung in there through two years of sometimes frustrating negotiations, Kilmer said. They did it because they love their hometown and want to see it become a major league city.

Yet, before any pucks are dropped at the Oceanfront, some heavy lifting would need to be done, and much of it by taxpayers.

The city of Virginia Beach and/or the state would have to provide millions of dollars to attract an NHL team – a public contribution that surely would be contentious.

The Virginia Beach arena finance deal is unusual in that the building would be owned by the private sector, not the city. The financial model was structured so most of the revenue that would normally go to a major sports team would instead be earmarked for arena developers.

USM will invest $40 million in private equity and borrow $170 million from a Chinese bank. Virginia Beach is chipping in $76 million for infrastructure and a portion of the city’s hotel tax.

That seems like a pretty good deal for Virginia Beach.

USM will pay its debt and operate the arena in part with concessions, club seat and luxury suite revenue.

Therein lies a potential rub: major sports teams nearly always claim at least a portion of those revenue streams.

Kilmer agreed that the current deal would need restructuring if USM is successful in luring an NHL franchise.

“This facility works without a team,” Kilmer said. “That’s why we came to the city and said, ‘We can make this work,’ because we can capture all of those revenues.


“To be very candid, if we move forward with any national franchise, there’s no question that all of that will be up for discussion. How can we replace those revenues? How can we make it work?”

Joe Gelardi, a vice president for USM, said his group estimates it would cost about $80 million to upgrade the arena for a major league team. He said he’s convinced the arena-finance deal can be restructured in a way that makes sense for the city and for his investment group.

“There is really no set model for these types of deals,” he said. “Every deal has a unique structure.”

If you’re wondering why USM isn’t focused on the NBA, which seems a better fit for this market, it’s because officials recognize the league isn’t expanding and has no teams that appear remotely likely to relocate

The NHL, meanwhile, is well on its way to adding expansion teams in Las Vegas and Quebec City in 2016. It also has ailing franchises in Raleigh, N.C., suburban Miami and Phoenix that are candidates for relocation.

SMG will book events and run the arena for USM and Cavalieri will assist the group in pursing a major sports team.

He has 30 years of experience running arenas and working with major sports teams, having worked at Madison Square Garden and for the Detroit Red Wings before joining SMG. He also assisted the Charlotte Hornets in moving to New Orleans.

Norfolk, you may recall, made a pitch for the Hornets, but New Orleans had a ready arena and all Norfolk had were plans to build one.

“We know what needs to be done to accommodate a major sports franchise,” Cavalieri said.

Most major sports franchises don’t make a lot of money on year to year operations, he said. “The appreciation of franchises is where you make your money,” he said. And that’s in part why a billionaire might be persuaded to take a chance on putting a franchise in Virginia Beach.

Nineteen years ago, when Hampton Roads sought an NHL expansion team, the cost for a franchise was $50 million. Las Vegas and Quebec City are expected to pay $500 million apiece for expansion teams.

Cavalieri said he believes a major sports team would work at the Oceanfront. With 1.7 million people, Hampton Roads is larger than nine other regions with major sports teams.

But the Oceanfront is on the eastern edge of the metropolitan area – on a good day, an hour’s drive from Williamsburg.

There have long been legitimate questions as to whether the region has enough people and corporate support for a major sports team to survive in downtown Norfolk, the geographic center of the region. Those questions become even more germane when looking at an arena on a site that’s not particularly accessible.[/u] (Gary will love this sight and market)

I also wonder about parking near the arena. Virginia Beach officials say there could be as many as 6,600 parking spaces within a mile of the arena, which sounds like a lot. However, Councilwoman Barbara Henley in part voted against the arena deal because the city will have to construct parking decks to make it work.

That would certainly be the case if the NHL decides to call Virginia Beach home.

Even without the NHL, the arena would add much to the sports menu of the region. The Atlantic 10 is a likely candidate to move its men’s basketball tournament here. Conference USA, Old Dominion’s home league, likely would make a bid as well.

SMG will bid to bring NCAA first-round regional games, as well as NBA and NHL exhibitions. Developers have talked to the Arena Football League, and there will be plenty of gymnastics, indoor soccer and smaller basketball tournaments.

But there’s a long way to go before we’ll see any slap shots at the Oceanfront.


pilotonline.com/sports/opinion-virginia-beach-s-pursuit-of-nhl-team-will-require/article_3496f18c-afcb-587b-823a-f7a2a8b0bd05.html

[mikecubs]

Virginia Beach/Norfolk has only 3 fortune 1000 companies and it's NOT growing either. It would be the smallest US NHL market other than Buffalo but realistically Buffalo is bigger due to help from Canada.

Gary has moved on from mid sized oversaturated cities that will be really big someday like Phoenix/Florida/Atlanta. He's going after smaller sun belts now like Vegas though in fairness Vegas is growing at a fast clip. Could smaller non-growing rust belt like sun belts like Virginia Beach be next? How long until Memphis and New Orleans are considered? LOL

[Deleted]

excuse my ignorance, where is Virgina beach? Google Map link please. can you play hockey on a beach?

#joke #whynotSaskatoon

[mikecubs]

It's 209 miles southeast(ish) of Washington DC.

www.google.com/#q=washington+dc+to+virginia+beach+distance

[Deleted]

Jun 28, 2016 15:09:30 GMT -6 mikecubs said:

It's 209 miles southeast(ish) of Washington DC.

www.google.com/#q=washington+dc+to+virginia+beach+distance

It's closer to Raleigh, NC. Which happens to be SE of Virginia Beach. The city is on the Atlantic Ocean, at the far east side of Virginia, just north of the Carolinas.

[mikecubs]

You are correct! It is closer to Raleigh by 7 miles

www.google.com/#q=raleigh+to+virginia+beach+distance

[Lions67]

Dumb place to go.
The NHL is really missing out....in MEXICO CITY!

[Deleted]

Isn't there enough teams in the East already? If VB gets team before QC, I suggest the Canadian teams start their own league.

^ better yet, with a Vegas Flare....Puerto Vallarta!!

[mikecubs]

Jun 28, 2016 18:07:27 GMT -6 Lions67 said:

Dumb place to go.
The NHL is really missing out....in MEXICO CITY!

Silence!!!! Don't give Gary any more bad ideas!

[mikecubs]

Jun 28, 2016 21:57:17 GMT -6 @jetsfan77 said:

Isn't there enough teams in the East already? If VB gets team before QC, I suggest the Canadian teams start their own league.

^ better yet, with a Vegas Flare....Puerto Vallarta!!

If Virginia Beach gets a team even if Quebec gets a team I give up!

I like the idea of a Canadian league. Take some of the northern US teams and the few successful sun belts(LA,SJ, Dallas). Add Houston to the new league. Gary can have his own league with Arizona, Florida, Virginia Beach, Mexico City, Honolulu, Venezula, Havana, New Orleans, Memphis, Birmingham, San Diego, Albuquerque, Tulsa, El Paso, Little Rock, Columbia(South Carolina) Bagdad, Kabul etc...