Plans for a new Virginia Beach arena hit a roadblock on Wednesday, when the Virginia Beach City Council voted against the funding proposal.
There have been some setbacks for the arena proposal in recent weeks. United States Management (USM) needed the council’s approval to more forward with a funding plan that called for the company to take on debt to finance the arena. Under the latest terms, USM would have taken $240 million in debt and used a series of reimbursements–which came from sources such as tax revenue from the arena, 1% of the hotel tax, and construction incentives–to pay down the debt.
One of the issues at hand for the council was to vote on whether to grant USM a 60-year lease for the arena land. As was noted here yesterday, members of the council were expressing certain reservations about the plan, including a provision that would have prevented the city from sharing proprietary information on USM and another that would have allowed the plan to proceed without a bond grade rating.
Ultimately two of the council members featured in that story–Louis Jones and John Moss–voted against the proposal, and were joined by a third in Barbara Henley. In order to be approved, the plan would have needed nine yes votes from the 11-member council.
USM is not ruling out another run at the project, and Virginia Beach mayor Will Sessoms says that he is still interesting in pursuing the arena. More from The Virginian Pilot:
“I am not going to throw in the towel,” he said. “I am going to talk to council members who voted ‘No,’ see what it will take to get them on board.”
During the council meeting, Sessoms said that as much as he would like to see the city finance the arena on its own, it can’t because of competing priorities. He said he was drawn to this proposal because the developers agreed to take on the debt to protect the city’s credit rating.
Councilman John Uhrin said the project has been looked at for years and was not rushed.
“The developer assumes all responsibility and is the sole entity that is responsible for all of the debt service,” he said.
RELATED STORIES: Major Vote Set for Virginia Beach Arena; 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
