Mid-Atlantic Arena, the developer that was to have built a new Virginia Beach arena, has filed a lawsuit against the City of Virginia Beach. This comes months after the city council voted to terminate its agreement with the developer.
In a November vote, the Virginia Beach City Council decided by a 9-1 margin to terminate its agreement with Mid-Atlantic Arena. When making this decision, the city claimed that Mid-Atlantic Arena had failed to complete several steps by its November 7 deadline, including the closing of a $150 million loan from JPMorgan Chase or the obtainment of $70 million in equity.
Now, the developer has filed suit against the city for $140 million. Among its claims, Mid-Atlantic Arena states in the lawsuit–filed in Virginia Beach Circuit Court on Tuesday– that it completed the loan documents on time. More from The Virginian Pilot:
In the lawsuit, Mid-Atlantic argued that it delivered the loan documents on time and that the contract did not require the developer to have the $70 million in the bank. It also said that it had deposited “tens of millions in equity” into an escrow account.
“The city pulled the rug out from under the developer, causing a substantial waste of time, money, goodwill and other resources,” according to the suit.
“Making matters worse, the city immediately embarked on a public relations campaign to wrongfully blame the developer for the arena’s demise in a blatant effort to control the narrative in the media and divert the public’s attention from the city’s wrongful conduct.”
Since the city voided the deal, the lawsuit says, several of the equity partners have demanded and received refunds of their contributions, which had been placed in an escrow account. The lawsuit named Anschutz Entertainment Group, Stephen Ballard of S.B. Ballard Construction Co. and an unnamed university as investors.
Under its agreement with the city, the developer would build a privately operated arena on city-owned land near the convention center. Mid-Atlantic Arena was to have been eligible for as much as $476 million over 33 years, with the funds being issued through several tax incentives.