Copyright 2014 Virginian-Pilot Companies LLC
All Rights Reserved
AS I SAT listening to the competing proposals for a new arena in Virginia Beach, I realized both teams have experience designing, building and managing major sports complexes around the country.
Both sides Monday night boasted folks of some renown: Eddie Garcia with the ESG Companies and United States Management; and Bruce Thompson, a consultant for the group headed by W.M. Jordan.
Both offered informative slides, confident pitchmen and eye-catching renderings to nearly 150 people at the city's Convention Center, including folks on a citizens committee. The 18,000-seat arena would rise near the center.
Here's the thing:
It's impossible to overlook that one faction (Jordan) needs a huge amount of cash from taxpayers, while the other (USM) would build the sports and entertainment facility primarily with private money.
The latter is willing to take most of the risk, while the former wants to gamble with a boatload of money from taxpayers.
"When the risk is privatized, both the lender (and developer) have every reason to be conservative, and more realistic about attendance and revenues generated," Beach City Councilman John Moss told me. "When the risk is taken by the public, there isn't the same discretion."
Moss hates dipping into the public coffers on some projects, while I think government must pay for certain priorities. We rarely agree on such issues.
This time, we do.
Yes, the arena can generate revenue and be an asset for the city, helping to spur more hotel stays, visits to the Oceanfront and spending by tourists. Construction would create hundreds of jobs.
That shouldn't mean state and Beach taxpayers get socked with the cost - especially when one bidder is willing to take that gamble.
Jordan wants Virginia Beach and the state to pay $300 million, including $10.5 million in annual debt, according to a story by The Pilot's John Holland. If the arena doesn't meet revenue projections, the city would be responsible for the shortage.
Of that total, the Jordan group seeks $25 million from the General Assembly. That's probably a nonstarter - as it should be.
Why should the rest of the state cough up that much money for a facility that will primarily benefit the Beach, and to some extent, South Hampton Roads?
Besides, state spending on core services should come first.
Del. Ron Villanueva, a former Beach councilman, has sponsored sports-related legislation in Richmond. Requests for outright subsidies for sports facilities have been "a difficult sell at the state" level, he told me Wednesday.
USM would spend $200 million of its own cash for construction and $10 million for costs connected with opening the arena. It would get about $7 million annually in tax revenue to pay down debt, and it would be responsible for shortages.
Under both proposals, the city would pay about $50 million for infrastructure improvements. A city spokeswoman said Wednesday, by email, that it's too early to know whether that total is accurate, or what that work would include.
But the city, Jordan contends, would own the arena under its proposal.
Basketball fans and concert-goers won't care. They want to see the teams or the entertainers.
If the private sector is willing to own and manage the place, more power to it.
Beach officials should scrutinize both proposals, and they should consider the track records of all the principals.
The decision, though, should be a slam dunk.