VIRGINIA BEACH — Virginia Beach is poised to build a $220 million arena on six acres of land across the street from the convention center.
Mayor Will Sessoms announced that city council struck a deal with United States Management the night before his State of the City address Wednesday at the Virginia Beach Convention Center.
“Picture March Madness two years from now,” Sessoms said. “Wouldn’t it be amazing to have that happening right across the street at our new Virginia Beach arena?”
Sessoms said this enterprise wouldn’t accrue a debt of more than $150 million and will earn $70 million in equity.
JPMorgan Chase is the lead lender for the arena, the city will lease land to the developer for the next 60 years at $1 per year and spend $67 million in infrastructure improvements in the area to support the arena, according to a Facebook post by councilwoman Jessica Abbott’s.
Abbott also writes that the city will match taxes it collects from the arena and dedicate one cent of the eight cent citywide hotel tax generated at the venue to the arena at $3.2 million a year. The annual tax incentive totals could reach up to $14.6 million and the city plans to provide up to 2,700 parking spaces for the arena.
Sports and entertainment promotion company Anschutz Entertainment Group will manage the arena.
“With the arena, we jump-start our expanding entertainment district, which will translate into more jobs, additional amenities for residents and tourists alike,” Sessoms said. “… the revitalization of 19th Street corridor and increases to our tax base that help pay for service delivery in neighborhoods from Pungo to Shore Drive and from the Oceanfront to Centerville.”
Councilman John Uhrin, who represents the Oceanfront, said the arena deal is better than what the city had hoped for with USM’s equity contributions.
“I think it makes a lot of sense for the largest city in the Commonwealth of Virginia to host the largest arena in the Commonwealth,” Uhrin said in an interview.
“To really have something of this magnitude I think adds the opportunity to add an awful lot of entertainment opportunities to the public that have been just skipping the entire region, not just the city.”
Uhrin said he’d like to see The Rolling Stones perform or an NCAA basketball quarterfinals game at the arena someday.
The arena could fit up to 18,000 people and is projected to take two years to finish construction.
“We are required under our agreement with the city of Virginia Beach to close by this September,” Andrea Kilmer, president and CEO of USM said in a press release. “We certainly plan to expedite closing, with groundbreaking soon to follow. Construction should take 24 months, meaning our arena, the largest in Virginia, will be hosting events in 2019.”
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