Maybe because of the approaching holidays (not that all of them are still approaching), everyone everywhere voted on everything last night, so let’s get right to it:
The Virginia Beach city council voted 10-1 last night to approve the plan for developers United States Management to build a new $200 million arena, which would (at least at first) be just for concerts, not any sports teams. Here’s how WAVY-TV described the financing:
USM would pay for the $200 million facility and the city would take care of the infrastructure costs of about $76 million.
And here’s how the Virginian-Pilot described the financing, way back in May of 2014:
USM’s plan calls for it to spend more than $200 million of its own money to build the arena, then receive up to $7 million annually in tax revenue to pay down its debt.
That $7 million annually actually turns out to be more like $8.5 million, including kickbacks of all property taxes, business license taxes, admissions taxes, arena meals taxes, construction sales taxes, and the city’s share of arena sales taxes, plus the top 1% off of the city’s 8% hotel tax. (It’s all spelled out on the Virginia Beach Department of Economic Development’s website, albeit hidden in a subsidiary “Revenue Fund Agreement” document.) Add it all up, and the arena developers will actually be getting about $206 million in subsidies for their $200 million arena — with about $130 million of that going directly to pay off the money that the developers plan to borrow from a Chinese government-owned bank for arena construction.
Now, I know that finance is confusing, but you’d think the news reports would have found somewhere to mention the tax kickbacks, even if they buried it way down at the bottom. (The Virginian-Pilot’s article on last night’s vote was similarly silent.) Presumably it wasn’t mentioned in the media because it wasn’t mentioned by any of the elected officials at the hearing, but come on, journalist people, you are allowed to actually read and report things on your own — even Wikipedia is okay with that.