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Va. Beach reaches tentative agreement to build arena that could host pro sports franchise


VIRGINIA BEACH, Virginia — A local company has tentatively agreed to the city's terms to build an oceanfront arena that could accommodate a professional sports team in Virginia Beach, though city council approval is needed, officials said Thursday.

The $200 million arena would be paid for by United States Management LLC with private financing from China. The arena would sit on city-owned land just off Interstate 264 across the street from the Virginia Beach Convention Center. An arena would likely provide an economic jolt at the oceanfront during the typically slow fall and winter tourist season.

The arena would initially have 16,500 seats and could be expanded to 18,000 if an NBA or NHL team moves in. Past efforts to land a pro sports franchise in Hampton Roads have faltered, in part because an arena wasn't already built. New Orleans and Oklahoma City both landed NBA teams after building an arena.

"We will be primed to be the home of a pro sports franchise should an owner or league come calling, not that we won't be knocking on their doors," said Andrea Kilmer, president of The ESG Companies, which would be the project manager. "But there are arenas operating in the United States successfully without one."

Kilmer noted that Kansas City and Lincoln, Nebraska, both successfully operate large-scale arenas without a major pro sports franchise. Officials expect the Virginia Beach arena to attract numerous concerts, tournaments, conventions and family programming that currently bypass the region because there isn't a venue large enough to host them. The largest arena in the region is the Hampton Coliseum, which opened in 1970 and has 12,000 seats.

"As we have looked at the types of activities and events that bypass not just Virginia Beach, but all of Hampton Roads, it's remarkable in terms of what it is that we our citizens and our visitors do not have access to because there is no facility in this market that can house these types of events," said City Councilman John Uhrin, who represents the oceanfront area.

USM estimates the arena would host 156 events a year without a pro sports team, including 23 concerts, 44 family, ice and entertainment shows, 36 sporting events, 16 graduations and 37 other events.

Under the preliminary deal, the city would contribute about $53 million toward infrastructure outside the arena. That includes parking, a plaza and utilities. The city would pay for those costs with public facility revenue bonds, which would be repaid from the city's tourism investment program. That program includes money from taxes on amusement, hotel stays and meals.

The city council still must approve the terms of the agreement. If the term sheet unveiled Thursday is approved by the council in December, the arena could open in the fall of 2017. A vote on a comprehensive development agreement would take place in the spring with construction slated to begin in 2015.

Under the terms of the deal, USM would pay the city $1 a year for 40 years to lease 5 acres the arena would be built on. At the end of those 40 years, the city would own the arena.

The agreement says if there are cost overruns, USM is responsible for all costs. The city is also not responsible for USM's debt if it defaults.

Brock Vergakis can be reached at

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