Virginia Beach City Council approves extension for arena financing

Posted at 1:05 PM, Jan 03, 2017

VIRGINIA BEACH, Va. - The Virginia Beach City Council voted 8-3 to approve an extension to work out financing for the proposed arena near the Oceanfront.

United States Management asked for a 60-day extension Tuesday night. The locally-based developer is working on a traditional financing model and is making progress, but needs another extension, according to the agenda.  Tuesday night's vote only required a simple majority.

City council previously voted to give the group a 60-day extension in November. That extension was set to expire on January 7.

"We're working diligently with a lender who has financed arenas and stadiums across the country, who's worked very closely with our promoter and operator AEG and so we feel very confident we're gonna bring this commitment prior to the deadline," said Andrea Kilmer, President and CEO of USM.

If that doesn't happen by the end of this new 60 days, council could direct the City Manager to end the deal with USM, but Councilman John Moss doesn't think that would happen.

He voted down the extension because he says it wasn't necessary to keep the deal on the table.

"What happens if on the 61st day they are just 48 hours away from [securing the funding]? We're gonna write a letter terminating the agreement? No," said Moss.

City council approved an arena deal in December 2015 that included financing from a Chinese lender. In October, city council failed to have a required super majority to approve changes to the financing. USM wanted to finance the project through bonds with backing from a Chicago-based investment bank. The vote failed 8-3 as 9 votes were needed.

Since the vote, USM has continued to try to work a plan, even asking for a legal review on whether nine council votes were needed in October, instead of a simple majority. The city attorney responded, saying nine votes were required.

USM is now back to the original agreement and Kilmer says she's confident an arena will be built in Virginia Beach.

The new deadline to secure funding is in March.