THE VIRGINIAN-PILOT
Copyright (c) 1997, Landmark Communications, Inc.
DATE: Thursday, January 2, 1997 TAG: 9701020148
SECTION: SPORTS PAGE: C9 EDITION: FINAL
SOURCE: BY HARRY MINIUM, STAFF WRITER
DATELINE: NORFOLK LENGTH: 52 lines
More than a dozen negotiating sessions have taken place in the last two months between members of the Hampton Roads Partnership and representatives of George Shinn, but the two sides have not reached an agreement on financing a downtown Norfolk arena.
The 20,000-seat arena would be used to house the Hampton Roads Rhinos, the NHL expansion team Shinn hopes to land. Shinn has said he needs an arena deal by Jan. 14, when he is scheduled to go before the NHL board of governors in New York to make his pitch for an expansion franchise.
Negotiators for the partnership submitted a proposal to Shinn on Dec. 23. Details of that proposal are not known, but here are some elements of an earlier proposal made by the partnership to Shinn:
The 20-year bonds to be used to build the arena would be funded primarily from three sources: Shinn, taxes from arena events, and contributions from area cities. In all, about $12 million per year would be needed to pay for the arena, expected to cost $120 million to $140 million.
Shinn's portion would come by paying rent and sharing other revenues generated by the facility. Shinn's share: from $1 million to $3 million a year.
Taxes generated on-site - such as state income taxes, sales taxes and amusement taxes - would be rebated to pay off the debt. Estimated annual taxes: $2 million to $5 million.
Area cities would pay about $1.50 per year per resident, a figure suggested by Virginia Beach officials early in the negotiations. Annual contribution: $2 million to $3 million. Officials had hoped the $1.50 per resident would be enough to make up any shortfall but now have determined that it won't. Norfolk, as the host city, likely would be required to pay more than its neighbors.
Shinn would run the arena, booking all events and collecting all admission fees from those events, as well as luxury-suite revenues.
Sources close to the negotiations say Shinn initially proposed to pay $500,000 yearly to lease the arena. Area officials responded with a request for between $1 million and $2 million from Shinn.
If an agreement is reached with Shinn, participating cities then must approve the deal, and the General Assembly must approve allowing all taxes generated by the arena to be put toward repaying the debt. Gov. George F. Allen has ruled out an increase in regional sales taxes to pay for an arena.
The Hampton Roads Partnership is a group of more than 50 government, civic, educational and business leaders, including all area mayors. It was formed in 1996 to help improve the area's economic competitiveness and foster regional cooperation.
KEYWORDS: NHL FRANCHISE PROPOSED ARENA STADIUM HAMPTON
ROADS RHINOS HOCKEY FINANCIAL BACKING FUNDING