City contribution for proposed Virginia Beach arena likely to top $50 million

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by 13News Now

WVEC.com

Posted on July 8, 2014 at 5:52 PM

Updated Wednesday, Jul 9 at 5:44 PM

VIRGINIA BEACH -- The city of Virginia Beach estimates its portion of a potential deal to build an 18,000-seat arena next to the Virginia Beach Convention Center at the Oceanfront will likely top $50 million. Deputy City Manager Doug Smith presented those costs to a work session of City Council on Tuesday afternoon.

In May, council members decided to pursue a proposal from United States Management that would build an 18,000-seat arena adjacent to the city's convention center on 19th Street.

The USM proposal calls for private investors to foot the bill to build the arena, which is expected to cost roughly $200 million. In exchange, the proposal calls for the city to give USM one percent of its hotel tax and any taxes generated from the operation of the arena itself.

In addition, the proposal calls for the city to complete a list of projects to improve the infrastructure around the proposed arena site. Those costs are part of the $52-53 million estimate that Smith presented to council.

Included in that number is more than $4 million for parking improvements, $4.7 million for utilities/water/sewer, and other infrastructure including road improvements.

Other optional costs for the project including enhanced landscaping could take the city's cost to just shy of $79 million, according to Smith.

"I am cautiously optimistic right now," said Mayor Will Sessoms, who stressed that while it is important that any project be done in the most cost-effective way, it is just as important that the city do the project right.

"If we can do $52 million, and it is like the other projects we've done, more power, move on, but if another $10 million could make a difference between making it first class or good, we must not forget, you know, to take that into consideration." 

READ THE USM PROPOSAL TO BUILD THE ARENA

Although the city will need to add some parking spaces near the arena, all parking would not take place in the arena area. The plan would include using lots, including privately-owned ones, that stretch down to Pacific Avenue. By doing so, the city, in part  thinks people attending event may spend more time at the Oceanfront.

"Spread out, a lot of people be coming by here, and it will generate more business to the Oceanfront," said Cecil Browne, a cook at Beach Bully BBQ. "There'll be a lot of revenues come in, and stuff like that."

"If it's not very far, if it's a few blocks -- five, six, ten blocks -- I don't think that's a problem. I just think if you get a couple miles where you have to shuttle people in, then it becomes a different issue for locals," said Donna McCoy, recognizing the parking situation could deter some people. "If I wanted to go bad enough, it probably wouldn't, but if it was kind of sitting on the post -- maybe/maybe not -- and I knew that I was going to have to walk 30 minutes to get there, I might be thinking about it, especially if it's in the wintertime."

Councilman Bob Dyer shared in Sessoms' optimism. He also pointed out the importance of making sure the Citizens Action Committee and the general public are updated.

"I think that they've been patient, and I think we had a really good first meeting. They asked a lot of questions. We now have the answers. Now, we have more information to give them, and I think their valued opinion will be a very important part of the discussion process," Dyer noted. 

The city hopes to have the framework of a deal in place to move forward with the arena by late fall.

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