A major vote will take place on Tuesday for a proposed Virginia Beach arena, as the Virginia Beach City Council will consider the project’s financing.
United States Management (USM) is looking to build an arena in Virginia Beach, and plans to cover a portion of the funding by taking on $240 million in debt. Over a 33-year period, developers of the Virginia Beach arena could receive a total reimbursement of up to $476 million through a variety of sources, including 1% of the city’s hotel tax, revenues generated by the arena, and construction incentives. The city would not be liable if the developer defaults on the project, which calls for the arena to be constructed on city-owned land and leased to the developers.
Some local officials believed that the funding would be approved by the council last month but, as was noted here last week, the developers had still not obtained a bond grade rating that was sought by the city. Now the council will vote on several stipulations, including whether to allow the developers proceed with unrated bonds.
Part of the agreement mandates that the city must keep USM’s proprietary information confidential. While that is not turning out to be a major issue for some council members, other are expressing anxiety over the proposal. More from The Virginian Pilot:
Vice Mayor Louis Jones, who has served on the council since 1990, said the confidentiality agreement is unusual and makes him uncomfortable. He said he has concerns about the deal but can’t express them.
“I would prefer to be able to tell the public what is going on,” he said.
Councilman John Moss, who has backed the arena project, chafed at not being allowed to explain the full picture to Beach residents. He likened the confidentiality agreement to being in a straitjacket.
“It troubles me that I can’t have the kind of conversation I would like to have with the public,” Moss said. He said the City Attorney’s Office advised council members that if they don’t keep the developer’s proprietary information confidential, they could be sued individually for damages.
“I am not going to go out and incur a liability for the taxpayers,” he said.
There is not a sports tenant lined up for the arena, though the possibility of eventually attracting one has not been ruled out. Previous projections have called for the arena to open in 2018.
RELATED STORIES: Virginia Beach Still Considering Arena Funding; Virginia Beach Confident in Arena Funding Model; Suites Already on Sale for New Virginia Beach Arena; Virginia Beach Approves Arena Funding Deal; New Virginia Beach Arena Funding Plan Emerges; Status Update on New Virginia Beach Arena on Tap
