THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: THURSDAY, June 23, 1994 TAG: 9406230520
SECTION: SPORTS PAGE: C10 EDITION: FINAL
SOURCE: BY EARL SWIFT, STAFF WRITER
DATELINE: 940623 LENGTH: Long
So much so, in fact, that they have ``had discussions'' with officials in the National Basketball Association, the National Hockey League and the Canadian Football League about the city's prospects of luring a franchise.
{REST} And they're serious enough that they are negotiating with a Seattle consultant to explore the city's big league appeal, and last fall made an overture to Al Harazin, former chief operating officer and general manager of the New York Mets, about working on the city's behalf.
``It's not back-burner,'' said Robert B. Smithwick, the city's development director. ``I've spoken with people in the NBA arena. I've had talks with people in the NHL arena.
``I'd say hockey requires the fewest of the big dollars. NBA is next.''
``I really think that's the next level for Norfolk, myself, if the retail center comes to fruition,'' Councilman Paul D. Fraim said, referring to the mammoth MacArthur Center project planned for downtown.
City Manager James B. Oliver Jr. informed the City Council this month that his administration hoped to contract with the Seattle consultant to research whether Norfolk ``should pursue a major sports initiative.''
The consultant - whom Oliver and Smithwick declined to name, pending a formal agreement - would be paid a maximum of $30,000, plus pre-approved expenses, to devote three to four months to the question.
``I can tell you that the discussions have been ongoing, and I do expect to receive from him in some reasonable time frame what he thinks he can bring to the table,'' Smithwick said Tuesday.
The consultant was made known to Smithwick in the course of his years-long courtship of the Seattle-based Nordstrom department store chain, he said. He would provide no further details of the talks.
Harazin, who worked closely with Norfolk officials on the deal that spawned Harbor Park, had been purged by the Mets before Smithwick and Oliver spoke to him.
``We tried to carve out a way that he could put his talents to use for us,'' Smithwick said. The discussions ended when Harazin declined the overture before the job was further defined.
Smithwick said he had ``had some discussions with the Canadian Football League'' about its potential, but ``concluded that if we're really serious about this, we ought to be looking at the NBA and the NHL.''
He declined to provide specifics about his contact with those leagues, but Fraim said he believed the city would probably fare better seeking an existing franchise, rather than ``getting into a bidding war'' over an expansion team.
Norfolk might be able to scare up enough money to finance a new arena, Fraim suggested.
Typically, a city pays for a new building the same way a homebuyer pays for a house: Both wrestle with a mortgage, the city's in the form of promissory notes called general obligation bonds. A city makes payments on these long-term notes from its annual operating budget.
Borrowing too much will land a city and homeowner in the same sort of trouble: Before long, so much of their cash will be locked up in mortgage payments that they won't have enough left to buy food and keep the lights on.
Not surprisingly, the use of general obligation bonds to finance a 20,000-seat arena - conservatively, a $60 million to $80 million item - doesn't hold much appeal in the halls of municipal power.
But Norfolk's ongoing effort to finance the MacArthur Center project has opened its eyes to ``more creative ways'' to cover such whopping outlays, Assistant City Manager Darlene Burcham said.
By breaking a project into pieces, each piece financed separately, cities can amass large pools of cash without relying too heavily on debt that must be repaid from the same budgets that cover police protection and other essentials.
Parking garages, for instance, could be financed with revenue bonds, through which the garages would be forced to support themselves. Arena parking income would be devoted to paying off garage debt, placing the financial burden for parking on the drivers using it, rather than the public at large.
Optimally, the same approach could be applied to the arena itself.
If, on the other hand, the arena was not expected to draw enough income to pay all its own bills, a portion of it could be financed through general obligation bonds and the remainder through revenue bonds, so that the taxpayer did not shoulder the entire load.
What if Norfolk can't make the numbers work? That might not kill the idea, provided the city doesn't insist that the arena be built downtown.
The Hampton Roads Planning District Commission and Old Dominion University have pooled $100,000 to research whether ODU could be home to an 18,000- to 20,000-seat facility if the building won regional support.
Such a civic-university partnership could offer the region a route to build a major league facility before luring a team, because it would enjoy immediate campus use.
``You have to move your mind into a larger perspective,'' former Mayor Joseph A. Leafe said. ``If that indoor team is really for the region, you look at that and say, `Well, OK, it's not actually that far from downtown.'
``I'm not making a case for it, it's just that nothing in this world is perfect.''
{KEYWORDS} MAJOR LEAGUES FRANCHISES
by CNB