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The Virginian-Pilot(Norfolk, VA.)
By John Holland

A team of businesses behind some of the most successful sports complexes in the country - including the Barclays Center in Brooklyn and the Pepsi Center in Denver - proposed Monday to build an 18,000-seat arena in Virginia Beach and pay for it themselves.

Their plan emphasizes what developers call the need for a major concert venue in Virginia to lure top musical acts, national political conventions and events such as the Ice Capades and NCAA tournament basketball. Project officials said the $200 million arena would be paid for entirely with private money, mostly from a Chinese construction giant, and would require no taxpayer funding.

The ESG Cos. of Virginia Beach is at the center of the plan, presented as a counterproposal to one initiated in November by construction firm W.M. Jordan Co., which involves Beach developer Bruce Thompson as a consultant. Both proposals would build on city-owned land near the Convention Center, and both would need major infrastructure improvements by the city.

Last year, an attempt to lure the NBA's Sacramento Kings to Virginia Beach fizzled when the state legislature refused to spend $150 million of public money to finance the arena. Virginia Beach spent nearly $1 million for consultants and public relations.

"Having a professional team is not essential to this being a successful arena," said Joe Gelardi, project manager for ESG. "Last year's effort failed because resources they were counting on never materialized.

"We have the financing in place. We had to prove to ourselves and our bankers that this made sense financially and we can carry it out, and we've done that."

ESG and a subsidiary, United States Management, are the local faces of the group, but much of the experience building and managing arenas comes from around the country. AECOM of Kansas City, which designed the Time Warner Cable Arena in Charlotte, FedEx Forum in Memphis and 93 others around the country, and Mortenson Construction of Minneapolis would lead the project, backed by S.B. Ballard, the Virginia Beach construction company.

SMG, which operates 230 arenas worldwide including in Oklahoma City and New Orleans, would manage the facility. In those two cities, the arena was built first and then attracted an NBA team.

City Council members Bob Dyer, John Moss and Rosemary Wilson attended the announcement. Moss said the group's concept was far superior to any proposal so far, noting that the group was willing to pump hundreds of millions into construction, jobs and materials.

"You have to say, 'We're open for business,' " Moss said. "I'm very excited because this is a case where the private investor is taking all the risks."

W.M. Jordan's proposal was given to the city in November, and the council agreed to accept competing proposals for 90 days. Only the ESG proposal came in by the deadline, 5 p.m. Monday.

John R. Lawson II, president and CEO of W.M. Jordan, said Monday that he hadn't seen the ESG proposal but that his group is local and in tune with the needs of Virginia Beach.

"We have a lot more experience as a team than they have, and we've tackled hospitals, a critical care center in Richmond and other major projects," he said.

Lawson declined to say how much his proposal would cost or how much his group is asking in taxpayer support from Virginia Beach or to name its financial backers, saying those details will come out.

"Both proposals are a good solution," he said in an email Monday night, "just different approaches with different levels of control by the City. The main objective is to get an arena built. Everyone wins if this is accomplished."

Dyer and ESG Chief Financial Officer Andrea Kilmer called for a transparent selection process.

"It's very important that we get out in front of this and share all of the financial information, and the entire plan," Dyer said. "I want us to start with town hall meetings right away.

"Put both projects side-by-side, let the public see every aspect, and then they can see our thinking and what was behind our decision-making," Dyer said. "Last year everything was done behind the scenes, and information wasn't available until too late. We can't let that happen again."

A city task force will review the plans and brief the council, according to the city manager's office.

John Holland, 757-222-5047,

header header

The $200 million arena would be paid for entirely by private investors, mostly from a Chinese construction giant.

two proposals

The ESG Cos. of Virginia Beach is at the center of a plan to construct an 18,000-seat multipurpose entertainment and sports arena on city-owned land.

Construction firm W.M. Jordan, which proposed an arena in November, has not said what its project would cost or how much public money would be sought.

previous plan

A bid early last year to lure the Sacramento Kings fizzled when the state legislature refused to spend $150 million of public money to finance the arena.


Steve Earley | The Virginian-Pilot Joe Gelardi, project manager with the ESG Cos., describes the arena plan during a briefing Monday. "Having a professional team is not essential to this being a successful arena," he said. united states management rendering The latest proposal for an arena in the Beach, unveiled Monday by a team of national and local businesses, would require major infrastructure improvements by the city.


February 18, 2014




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