Proposals continue for Virginia Beach arena
Jordan Crawford | 2/26/2014, 2:33 p.m.
After paying back the loan, the arena would be majority owned by The ESG Cos., Gelardi said, adding the Chinese contractor is not an investor. According to its online proposal, the arena would revert back to city ownership after 40 years. Meanwhile, the company would lease the city-owned land.
“It’s really completely different,” said Lawson about the competing proposal.
W.M. Jordan, which also built the Virginia Beach amphitheater, said Comcast Spectator subsidiary Global Spectrum would commit to operating the arena with a 25 year-lease. Lawson said his proposal allows for more city control, including a say on programming and naming rights, while tax revenue and rent would pay back the debt the city would take on to build it. Lawson didn’t disclose the cost, although he has said it’s cheaper than the $400 million proposed in the 2012 project.
“The city is not going to have any operational losses if ours is accepted. They won’t lose the money,” Lawson said. “They own it. In 25 years, they will have a debt-free facility.”
Both plans could also end up asking for a portion of the tax revenue generated by operations to pay back the arena development debt. The USM proposal additionally mentions the possible allocation of 1 percent of the collected hotel tax revenue, but Gelardi said any use of a portion of tax revenues to pay back the loan would depend on the city. He said that using private financing would lessen risk for the city and free up Virginia Beach to finance other priority projects.
The USM team would also cooperate with the city, convention center and business community, Gelardi said.
“All the principals in USM, we’re all locals and natives,” Gelardi said. “This is personal to us.”