Feasibility and bond rating studies for the planned $210 million Oceanfront arena are likely to satisfy the requirements Virginia Beach City Council previously identified in order to approve the development agreement, Deputy City Manager Doug Smith said in a council briefing Tuesday.
The finance plan, by developer United States Management LLC (USM), requires the Virginia Beach Development Authority to serve as a conduit issuer of bonds USM would use to finance construction. City Finance Director Patti Phillips said in a phone interview in July that council’s approval of the development agreement, including the finance plan, is contingent upon results of a revenue feasibility study and bond rating study.
The feasibility study assesses whether or not the estimated value of the arena and its revenue projections are fair and accurate, Smith told the Development Authority during a July meeting. During the briefing on Tuesday, Smith said a very recent look at a draft of this study indicates fair revenue projections.
“In terms of the appraisal, it’s frankly a good validation of USM’s pro forma,” Smith said. “When you look at the number of shows, attendance, income, expense per capita – all key indicators – USM is right on the mark.”
During the briefing, Smith said he and Phillips did not yet have copies of the studies, but they reviewed a draft of the feasibility study, and he expects the bond rating letter to be in this week. If all goes well, which Smith anticipates, the development agreement would come before council for approval Sept. 20. It would also be presented to the Development Authority earlier that day.