Virginia Beach developer teams with Chinese company for private financing of a sports arena
- February 17, 2014
United States Management, (USM), a firm that is part of the Virginia Beach-based ESG Cos., said Monday that it has lined up $200 million in private financing to build an 18,000-seat, multi-purpose entertainment and sports arena that could be ready by 2016.
Under USM’s conceptual proposal, submitted to the city today, private financing would come from banking interests in China; namely through a relationship with China Machinery Engineering Corp. (CMEC) of Beijing. CMEC will provide construction management and procurement support and join with USM to oversee a design/build team that includes other local players.
CMEC’S relationship with ESG is the result of outreach efforts conducted by the Commonwealth of Virginia through an initiative to attract business to the Old Dominion from Asia. “At the request of the state, we spoke with CMEC about several potential projects in our area and mutually agreed that the arena would be the most viable and a good fit for our two firms,” Andrea Kilmer, CFO for The ESG Cos., said in a statement.
ESG, started 64 years ago by Eddie S. Garcia, has worked on many projects in Virginia Beach. If its proposal wins city approval, the Virginia Beach Arena would be one of few in the nation that does not rely on public financing for construction.
The city of Virginia Beach, however, would be asked to contribute land and parking spaces, offsite improvements, and related city services. To finance public infrastructure, the USM proposal envisions a 1 percent allocation of the existing local hotel tax as well as use of a state provision that permits the capture of sales tax revenue attributable to arena operations.
“We believe Virginia Beach and the Hampton Roads region are ready for a world-class arena,” Kilmer said. “Our company has always seized opportunity when we believed it would benefit the local area, whether it was the first hotel to directly serve the Virginia Beach convention center or a water park like Ocean Breeze to entertain visitors at the oceanfront. “
The company’s plan locates the arena across 19th Street from the Virginia Beach Convention Center. It said the venue would be capable of supporting a variety of attractions, from rock concerts to monster truck rallies, trade shows, religious events and basketball tournaments. Among its amenities would be premium seating with suites, an LED screen scoreboard, box office/ticketing and guest services and accessibility for the disabled.
USM said it would rely on a development team for construction and operations, most of whose members have worked together on other major projects. They include:
Clark Nexsen Architects of Norfolk (now moving to Virginia Beach Town Center). Some of its local projects include the Half Moone Cruise Terminal in Norfolk, the RISE Center at Norfolk State University and the Virginia Beach Convention Center.
SB Ballard Construction Co. of Virginia Beach. Ballard built the Ted Constant Convocation Center and the expansion of Foreman Field along with the new Kellam High School in Virginia Beach.
AECOM Architects of Kansas City, Mo. The firm has designed 95 stadiums and arenas nationwide including in its home city (Sprint Center), in Charlottesville (John Paul Jones Arena) and the expansion and renovation of Foreman Field at Old Dominion University in Norfolk.
Mortenson Construction of Minneapolis Minn., Currently ranked as the second largest builder of sports facilities in the nation, Mortenson has built more than 100 sports and entertainment venues in the U.S. to date.
SMG, West Conshohocken, Pa. SMG provides management services to more than 230 public assembly facilities including convention and exhibition centers, arenas, stadiums, and other venues worldwide, including the Verizon Center in Washington, DC
If construction gets underway by late 2014, USM said the arena could be ready to host its first event by the end of 2016.