VIRGINIA BEACH- A consortium led by Virginia Beach-based ESG Companies has submitted plans to the city to build a privately financed 18,000-seat arena across 19th street from the city's convention center.
Plans were officially unveiled at a press conference Monday afternoon.
The company says the $200 million project would rely on private financing for construction. However, the project calls for 1 percent of the existing hotel tax in the city be used towards infrastructure improvements in the area. "We are asking the city to assist with the infrastructure, the parking and the road access that needs to be done," said Andrea Kilmer, CFO of The ESG Companies.
The plan also asks the state for sales tax revenue from arena operations.
Those costs are still unknown, but city council member John Moss is confident this is a favorable deal for the city. "The key will be if the cash flow justifies the infrastructure," said Moss. "We will have to see...but this is the private sector borrowing all of the money and taking all of the risk."
The consortium planning the arena includes Virginia-based SB Ballard Construction Company, Minnesota-based Mortenson Construction and Pennsylvania-based SMG.
SBBCC built the Ted Constant Convocation Center, the expansion of Foreman Field at ODU and the new Kellam High School in Virginia Beach. Mortenson Construction has built over 100 arenas and stadiums across the country. SMG provides management services to more than 230 public assembly facilities including the Verizon Center in Washington DC as well as the John Paul Jones Arena in Charlottesville.
Financing for the arena would come from banking interests in China through a "relationship with China Machinery Engineering Corporation (CMEC) of Beijing," according to a press release issued by the consortium.
CMEC would provide some construction management services and help procure materials.
"At the request of the state, we spoke with CMEC about several potential projects in our area and mutually agreed that the arena would be the most viable and a good fit for our two firms,” says Andrea Kilmer, Chief Financial Officer for The ESG Companies
The arena would not be dependent on a major sports league anchor tenant, according to the arena proposal. Instead, the arena would rely on major concerts, regional and national sporting events, motor sports, rodeos and other events. However, arena backers say they would not rule out the idea of an NBA or NHL team calling the building home.
A task force will review both proposals and brief the Virginia Beach City Council. At that point, they choose one of the plans to try and strike a deal.