VIRGINIA BEACH, Va. (WAVY) - The Virginia Beach City Council voted 9-2 Tuesday in favor of continuing negotiations for a proposed arena that could attract a major league sports franchise to the area.
The vote marks the council's first formal vote on the project. The two opposing votes were cast by councilmen John Moss and Bill DeSteph.
Sources tell WAVY.com the anchor tenant is the NBA's Sacramento Kings. At Tuesday's work session, Vice Mayor Louis Jones definitively said the anchor tenant is an NBA team.
However, the entire proposal depends on how much money the city can get from the state. Mayor Will Sessoms maintains the $426 million arena cannot be built without help from the state.
The most recent term sheet showed the city contributing $195 million, Comcast- Spectacor contributing $35 million, borrowing costs of $46 million and $150 million in state funds.
The Virginia Beach Development Authority has requested $150 million from the state. As of Friday, the governor did not make room for that amount in the state budget. But, Beach council members say they aren't surprised.
"We never expected the governor to have budget amendments for $150 million," Councilman Glenn Davis said. "We didn't have the details on the deal structure yet. The governor has been very supportive of an arena and a professional team, but he wants to see the deal structure run through the Virginia Economic Development Partnership."
The city will have to get the money through a budget amendment.
First, the city will have to get a commitment, on paper, from all the players, including Comcast-Spectacor and the anchor tenant. Sessoms said he plans to get this "term sheet" done before the legislative session convenes Jan. 9.
"Certainly within a close time frame of that date," Sessoms said Tuesday. "No question in my mind. We're going to have to."
At that time, Sessoms said the anchor tenant and the lease agreement will be revealed.
From there, the term sheet will go to the Virginia Economic Development Partnership and eventually be introduced by Virginia Beach Senator Frank Wagner in the Senate and Delegate Ron Villanueva in the House.
If successful, the whole floor will vote on it.
"I think the biggest hurdle getting to the arena is to be able to provide our delegation with the details of the deal structure," Davis said. "Right now everyone is working on hypotheticals."
Davis said the one number that is not a hypothetical is the $150 million price tag, being asked of the state. Davis also said the state will get $11 million annually in revenue as a return on that investment.
Now, it's up to the delegation to sell that story in Richmond.
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