A new Virginia Beach arena funding source was revealed last night, as United States Management announced a tentative $200 million commitment from Chicago-based B.C. Ziegler and Company.
B.C. Ziegler and Company usually focuses on the health care and senior living sectors. The commitment from an American bank replaces the original plan to borrow $170 million from The Export-Import Bank of China. With U.S. interest rates low (the project should carry a 4.5 percent loan rate, as opposed to the 6 percent rate offered by the Chinese bank) and the Chinese economy struggling, the decision to switch was an easy. In addition, by switching from a Chinese bank, the project loses an onerous requirement to build the arena with Chinese-sourced materials — a requirement that surely would have rankled residents down the road. From the Virginian-Pilot:
“It’s a made-in-the-USA loan alternative,” USM President Andrea Kilmer told the City Council on Tuesday….
Switching to a domestic bank, Kilmer said, addresses “perceived security concerns” from the public and protects the project from international political uncertainty.
“We’ve seen what’s happening around the world,” she said in reference to Britain’s vote last week to leave the European Union.
The information provided to the City Council didn’t lead to any action. However, the council could approve the project as soon as a July 12 meeting. If the funding plan is finalized and the city approves, the new 18,000-seat arena could open in 2018.
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