After green light from city, Oceanfront arena now in developer’s court

United States Management LLC President Andrea Kilmer talks to reporters Wednesday about the Virginia Beach arena project.
United States Management LLC President Andrea Kilmer talks to reporters Wednesday about the Virginia Beach arena project.

VIRGINIA BEACH — It took United States Management LLC more than two years to get the city’s approval to build an 18,000-seat, $210 million Oceanfront arena, which will be the state’s largest. It plans to get the rest of the project done in three.

“The ball is now in our court,” USM President Andrea Kilmer told reporters Wednesday, less than 24 hours after the City Council OK’d the project.

Separately, a spokesman for Gov. Terry McAuliffe released a statement from the governor in which he said the proposed arena will be “an economic asset for the entire Hampton Roads region.”

“Once complete, this project will boost our tourism industry and further establish the Hampton Roads region as a premier destination for sports, music and entertainment,” the governor said in the release.

Before construction can begin, developers must secure a $170 million loan from the Export-Import Bank of China, which is owned by the Chinese government, and have final design plans and some loan agreements approved by the city. Kilmer said she expects most of that to be finished by mid-2016, allowing construction to begin by 2017. Doors could open in 2018, she said, adding it would be nice to have a major artist who is from Virginia Beach, such as Pharrell Williams, perform the first show there.

Developers can now “more aggressively purse” an NHL team, Kilmer said, adding that they have talked to the league about bringing a team to Virginia Beach but have not spoken with a specific team about relocation.  She would not say what the NHL told USM, citing a confidentiality agreement.

The NHL is currently considering adding two teams to its list of 30.

The Associated  Press reported this week that the NHL is unsure it wants to add them — to Las Vegas and Quebec City –and has no timetable for deciding. The league is not considering opening expansion to other cities, according to the AP.

The arena is designed for hockey but could suit an NBA team, too.


If a pro team does move into the arena, it could drastically change developers’ revenue streams from it.

Currently, USM plans to pay off its $170 million loan in part via a 30-year incentive package that uses tax revenues generated at the arena and 1 percent of the citywide hotel tax. The amount of those incentives for USM will be capped at $476 million. USM is also counting on direct revenues from naming rights and concessions, which pro teams often demand.

“There is no question that all of that is going to be up for discussion,” Kilmer said, adding developers had been focused getting to this point up until now.

The developers also addressed concerns about the project that had been voiced by some residents. The arena, to be built by the Convention Center on 19th Street, will not be in the Navy’s flight paths, and the Chinese steel used to construct it will meet American standards, they said.

Kilmer also said the city’s plan to improve infrastructure at a public cost of more than $76 million will alleviate much of the traffic issues some predict, although there will be an element of “trial and error” to perfect crowd and traffic management.

Joel Gelardi, a USM vice president, introduced the team that will design, build and operate the private arena. It includes S.B. Ballard Construction, Clark Nexsen, SMG Management, Mortenson Construction and AECOM.

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