Va Beach/Kings/Arena Details worked out

November 27th, 2012 at 6:44 pm by under News, Personalities, Sports, Uncategorized

After months of negotiations it appears the details have been worked out to build an arena in Virginia Beach, and bring a major league sports team with it.

But the deal is far from being done.

A plan to build a $350 million arena on the Virginia Beach oceanfront, with an NBA team as its anchor tenant, moved forward during Tuesday night’s Virginia Beach City Council meeting.

Virginia Beach Mayor Will Sessoms announced that he has been advised by Peter Luukko, the President and CEO of Comcast-Spectacor that a proposal is ready for the city to build the arena in the Virginia Beach resort area.

Today, the city staff under the direction of the Mayor sent to state officials a request for $150 million dollars to help with construction costs and moving expenses for the unnamed team.

As I reported earlier this month, George Maloof Jr., one of the owners of the NBA’s Sacramento Kings met in Richmond with Gov. Bob McDonnell and other state officials to talk about moving his team to Virginia Beach if an arena was built there. No one involved in the negotiations, including the Kings have ever confirmed the Kings are the “major league sports team” being referred to.

Before and since that meeting, Mr. Luukko, has been negotiating a deal with Beach officials and presumably the Kings to bring the three groups together.

The city would own the building, Comcast-Spectacor in partnership with concert industry giant Live Nation would manage and book the arena, provide lease payments and all operating costs. In partnership with world-wide concert promoter Live Nation, the operators would count on the major league sports team as it’s principal tenant. But the majority of the dates would be filled by major concerts, large religious functions and other sporting events. These events range from ACC and NCAA basketball tournaments, Olympic trials, NCAA swimming championships, and pay per view wrestling and MMA shows. Comcast-Spectacor would kick in $35 million to make the deal work.

The Kings would be the main tenant.

But the deal hinges on the Virginia General Assembly agreeing to borrow $150 million, with that money expected to be paid back over time via state tax revenue that would be generated by the arena.

$70 million of the requested state funds would go towards arena capital costs, and $80 million will go to the team for moving expenses. That would include an estimated $30 million dollar relocation fee the Kings would have to pay the other NBA owners, and for potential loss of income the Kings would face by having to play two years at the Old Dominion Constant Center while the arena is being built.

Already one consultant report, given to state officials, concludes an arena with an NBA team in Virginia Beach could generate as much as $182 million in visitor spending each year, with the state alone taking in almost $11 million a year in tax dollars.

Virginia Governor Bob McDonnell has long supported efforts to bring a professional sports franchise to Hampton Roads. But will he have enough sway to convince state leaders that the state tax revenue the arena will bring in will pay off the loan? In addition to the money, McDonnell believes the national exposure of a “major league team” will be good for the state.

The city would be responsible for borrowing $195 dollars. The council it would seem, has to be convinced money generated by the arena on the local level will be enough to pay back that loan without the city having to use current or future tax dollars. In addition city hotels, restaurants and shops both in the resort area and nearby would look forward to increased business especially during the non-tourist season from September through April.

Mr. Luukko is expected to come before the Virginia Beach Council next week to make Comcast-Spectacor’s formal proposal. Mayor Sessoms told Jason Marks of WAVY-TV Tuesday night he and Mr. Luukko believed the chances of this all coming together was about 50-50.

12 Responses to “Va Beach/Kings/Arena Details worked out”

  1. JC says:

    $182 million in visitor spending? Eh, my understanding is that the spending is more in line with money that would be otherwise spent on other entertainment. The idea that the government would pitch in $150million is outrageous when other cities aren’t contributing anything more than loan guarantees. Worse, the deal would depend on the Maloofs as owners, as they have already double crossed Sacramento. Any politician who would cozy up to those bankrupt idiots is out of there mind and should be thrown out of office.

    1. Cedric Odom says:

      isn’t that the truth.

  2. MARJORY says:

    I REALLY LIKE THIS IDEA, DO WE HAVE A TRAFFIC PLAN??? HOW ABOUT A CHESAPEAKE BAY SUPER FERRY TO DROP EVERY ONE OFF AT THE BEACH??? TRAFFIC PLAN PLEASE?

  3. Dirkula says:

    Want the real scoop on the Maloofs? Just look here http://www.sactownroyalty.com/2012/11/28/3701212/virginia-beach-reportedly-reaches-deal-with-comcast-kings-may-ask-for
    and see for yourself. Is this the type of people you want to put your faith in!?

  4. Swifty says:

    As someone who grew up in Virginia Beach and now live in Sacramento. Good luck with the Kings. The Maloofs are not trustworthy. Just last year we were going to build a new arena over the old rail yards. The Maloofs lead us on just like they will VB. I’m seeing them play next week, probably for the last time.

  5. Savo says:

    We do not have the money. I say again, we do not have the money. Every financial analysis of the “positive” fiscal impact of sports teams I’ve ever seen says they’re nothing but a money pit. Look what this team is doing to Sacramento. They’ve gotten the taxpayers on the hook for hundreds of millions of dollars, and now they’re leaving them holding the bag. What a racket!

    And of course the developers…oops, I mean Virginia Beach City Council….will push and shove until they get their way, just like they did with light rail.

  6. Cedric Odom says:

    Wow You guys in the south are smoking some serious crack. The NBA will not come to VA Beach before it comes back to Seattle.. you guys have no one living there this post is evidence… no one replied lol. Hey VA Beach residents please put down the moonshine and go back to working you don’t need a Basketball team you are a small market I mean real small..

    1. Matt says:

      Cedric, you guys in Seattle sure seem frustrated with not having a team, considering the fact that it was your poor attendance that made you lose your last one.

    2. Ralph says:

      You can have them in Seattle. Please take them, and get our leaders to stop wasting money on this. It will be the best thing Seattle has done since, well, ever.

  7. colin says:

    I do like the idea of VB having a professional sports team. But as a former intern for the Norfolk SharX, I can tell you, it’s going to take a huge effort to get fans in Tidewater into seats at a new arena. While yes, basketball is more popular than indoor soccer, I think that the team would struggle to find 20,000 fans willing to buy season tickets to the “Kings.”

  8. DC says:

    As a Sacramento native who no longer cares if the Maloofs choose to stay or go, it’s important you all realize what you’re getting into. The Maloof bros inhereited their dad’s distributorship business and then got into the casino business. Well, they ran both into the ground and all they have left is the Kings, so now they are looking for a bailout to save them. Don’t expect them to pump their own money into a big payroll that lures top talent, because they are broke. Instead, they will live off revenue sharing and non-basketball revenues generated by a new arena. If David Stern actually cared, he’d force the sale of the team to reputable and solvent owners, but he doesnt. Anyways, good luck Virginia, whatever you decide to do.

  9. Balddawag says:

    Deal with the Magoof’s your playing with DEVIL !

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