NORFOLK, Va. (AP) — Virginia Beach's economic development director requested a $150 million commitment from the state on Wednesday to help attract a pro sports team to town.
The city is debating whether to build an 18,500-seat arena near the oceanfront in hopes of persuading an NBA or NHL team to relocate to the state's largest city as soon as next year.
In a letter to the Virginia Economic Development Partnership, Warren Harris wrote that the state would need to provide $70 million in funding to help build a $300 million arena. The partnership is a state authority dedicated to helping businesses expand within or relocate to the state.
Another $30 million would be needed to pay the unnamed franchise's league relocation fee while $42 million would be spent to offset the team's financial losses while it plays in a smaller, temporary arena for two years while a new one is built. A study commissioned by the city has suggested that an NBA team could relocate to Virginia as soon as next year and play in various unidentified arenas around the state while a new one is constructed.
The other $8 million would be spent on moving expenses for the team.
"Without financial participation from the Commonwealth, this project cannot move forward," Harris wrote. "This will be a facility for the entire Commonwealth, and the team will be the Commonwealth's team."
The city's study says the state would reap about $10.9 million in annual taxes if a pro team were to move to Virginia Beach.
The city has been working since August with Philadelphia-based sports and entertainment company Comcast-Spectacor on the possibility of relocating a pro franchise. The company is the owner of the NHL's Philadelphia Flyers and the Wells Fargo Center, where the Flyers and the NBA's Philadelphia 76ers play.
However, a potential target would not be the Flyers or 76ers, but perhaps the Sacramento Kings, which has failed to reach an agreement with the city for a publicly financed arena there.
Comcast-Spectacor President Peter Luuko will make a formal presentation to the city council on Tuesday.
Harris wrote that the company has agreed to pay $35 million toward the construction costs of the arena, while the city could pick up the rest of the tab without negatively affecting its bond rating or debt capacity.
Harris also wrote that Comcast-Spectacor has agreed to ensure a major professional sports franchise is the arena's tenant, with a guaranteed 25-year lease.
The city council would have to vote to approve the project. If it chooses to move forward, Virginia Beach Mayor Will Sessoms has said he expects a formal vote to take place in February or March.
Harris wrote that in order to meet the prospective team's operational and playing schedules, construction on the proposed arena would have to begin in 2013.