Proposals continue for Virginia Beach arena
Jordan Crawford | 2/26/2014, 2:33 p.m.
Newport News-based W.M. Jordan Co.’s proposal to build an 18,000-seat sports arena at the Virginia Beach Oceanfront now has competition from another business team that plans to use financing from a Chinese bank.
By Monday, Virginia Beach-based United States Management submitted the second proposal to build a similar sized $200 million arena across from the city’s convention center that the company says would not rely on public money. USM is majority owned by The ESG Cos. based in Virginia Beach and was created specifically for the venture.
“We recognize that the arena has the potential to be an anchor in the Oceanfront for economic development,” said Joe Gelardi, USM’s arena program director said. “I think the No. 1 selling point is obviously the fact that it does not increase the tax burden on the community.”
The two plans take different approaches in the proposed financing and ownership of the arena, although much of that information won’t be released until Virginia Beach reviews the plans and releases the proprietary information within 10 days.
The plan from W.M. Jordan’s team would rely mostly on Virginia Beach financing the construction by selling bonds while the USM plan would fund the build-out privately with a loan. That’s also because Virginia Beach would continue to own the arena in the W.M. Jordan plan, while USM’s parent company would own the arena in its plan.
If construction starts later this year, both proposals said an arena could begin hosting events by the end of 2016.
A sports arena plan gained traction in 2012, but its business model relied on recruiting a major league sports team. When attempts to attract the NBA’s Sacramento Kings fell through by the start of 2013, the project was thought dead. That’s until major Virginia developer W.M. Jordan Co. submitted an unsolicited proposal to the city on Nov. 8 to build an entertainment and sports arena that could operate without a major sports franchise. Virginia Beach City Council then gave any other interested companies three months to submit a proposal.
Like the W.M. Jordan plan, United States Management said the project would be viable if designed with the flexibility to accommodate a wide range of events, including college and youth sports tournaments, concerts, trade shows, monster truck rallies and shows on ice.
Both proposals also cite the ability to easily renovate the facility for an NBA or NHL team, if recruitment is successful. Both also project attracting roughly 150 events a year, particularly ones they say bypass Hampton Roads for not having a large enough venue. The next largest venue is the 12,000-seat Hampton Coliseum. Both project leaders say an arena would help turn the city into a year-round resort by garnering visitors to fill local hotels from the October to May off-season.
A key partner with USM is Beijing-based China Machinery Engineering Corp., which would oversee the design and construction of the facility. That international contractor’s relationship with an undisclosed Chinese bank helped secure financing for the project, Gelardi said. The team also includes Clark Nexsen architects in Norfolk and Virginia Beach-based S.B. Ballard Construction Co. Partner Minnesota-based Mortenson Construction has built more than 150 sports and entertainment venues nationwide. AECOM Architects of Kansas City, Mo., has designed 95 arenas.