Monday was the deadline for proposals to build a sports arena in Virginia Beach — I know, I’m kicking myself for not finishing my application on time, too — and two different developers threw very different hats into the ring. In one corner, developer W.M. Jordan Co. sent in its arena plan that was first floated in November; what was then only vaguely described as a “public-private partnership” turns out to be a plan for the city to pay 75% of the construction cost and get “repaid” by increased taxes from additional visitors.
If that doesn’t float your boat, the competing plan is simultaneously more promising for the city and even more crazy:
“We agree that a major arena is the right decision for Virginia Beach and are exploring options that are best for our community, such as shifting the risk from the City and citizens to private investors,” [ESG Companies VP Andria] Kilmer told WAVY.com in November. “We are finalizing our analyses in anticipation of making a proposal that will be for a locally-owned, privately-financed arena which incorporates national and international players to provide Virginia Beach with an iconic world class venue.”…
The $200 million or so needed to build the project will come from a bank in China. ESG would pay the loan back over time.
This apparently would not be an EB-5 cash-for-green-cards plan (or if it is, ESG isn’t saying), but rather a direct loan from a Chinese bank. The hook for the bank is apparently that construction would be overseen by the Beijing-based China Machinery Engineering Corp., which appears to mostly build coal-burning plants.
Of course, the fact that a bank would be fronting the money doesn’t say much about how the loan would be paid off, and ESG hinted that the public could still be on the hook for some of that: It mentioned a possible contribution of city hotel tax revenue, plus there’s a complicated lease deal for the arena (ESG would own it, but lease city-owned land, but ownership would revert to the city after 40 years) that makes it unclear to me whether they’d be in line for property tax breaks.
You can see details of the two proposals here (ESG) and here (W.M. Jordan), though since the ESG proposal hasn’t been fully made public yet, in their case “details” just means “clip art of hockey player silhouettes.” (And W.M. Jordan offloaded all their financial details into a separate “volume two” document that doesn’t appear to be online.) The Virginia Beach city council was set to meet last night to hear presentations on the two plans (according to WAVY-TV, at least), but I can’t find any reports on what, if anything, was discussed there, either. Maybe they avoided holding a real meeting by having half their members stand in the hall. All the kids are doing it!