THE VIRGINIAN-PILOT 
              Copyright (c) 1997, Landmark Communications, Inc.

DATE: Thursday, January 9, 1997             TAG: 9701090321
SECTION: FRONT                   PAGE: A1   EDITION: FINAL 
SOURCE: BY HARRY MINIUM, STAFF WRITER 
                                            LENGTH:   75 lines

DONE DEAL BECOMES UNDONE FOR SHINN, AREA OFFICIALS

For much of Wednesday, Hampton Roads Partnership officials believed they had reached an agreement with George Shinn on plans for an arena, but the day ended as it began: without a deal.

Sources say Shinn, who has applied to bring a National Hockey League expansion team to Hampton Roads, reached an oral agreement with Partnership officials on an arena lease late Tuesday night. But when Shinn's financial advisers put the agreement in writing and faxed it to Partnership officials Wednesday, sources say, the proposal differed from the oral agreement.

Partnership officials responded by faxing Shinn a copy of the deal they thought had been agreed upon the night before. Officials said they made it clear to Shinn that Wednesday's offer was their final one, and they asked Shinn to reply as soon as possible.

Shinn and the Partnership are just about out of time to get a deal done. Shinn is scheduled to make a formal presentation to NHL officials in New York Tuesday, and he has said the deal must be completed by this weekend.

Shinn was unavailable for comment.

Partnership officials were so convinced Wednesday that a deal was imminent that they scheduled a meeting for this morning at Old Dominion University to brief key government and private-sector leaders on the details. The meeting was hastily canceled. A conference call to the region's city and county managers, scheduled for 4:30 p.m. Wednesday to brief them on the details, also was canceled.

Said one Partnership official: ``We're still optimistic that it can be done. I'd say the chances are 50-50 that we'll have a deal.''

In other developments Wednesday:

Sources say Shinn has agreed to be a tenant rather than manager of the arena. When negotiations began in November, Shinn insisted he run the arena, collecting all luxury-suite and concession revenues and booking all events.

Instead, sources say, Shinn would pay a flat rental fee for his hockey team's 43 dates per year. It isn't known how much revenue Shinn would share from the luxury suites, parking and concessions. A regional board of representatives from most or all of the region's cities likely would oversee the arena and probably would hire a firm to run the facility.

To make an arena deal work, sources say the Partnership must sign a deal with a concessionaire and sell the naming rights to the arena before construction begins. The money would lower the yearly debt payments, and it is necessary to make the financial numbers work, officials say.

The $120 million to $140 million arena would be funded by arena revenues, contributions from local cities, and rebates of state and local taxes generated at the arena. Norfolk, the host city, would contribute more than the other cities to the construction of the arena, although it isn't known how much more.

Officials say they have begun contacting local and regional corporations about the naming rights. Norfolk Southern has had discussions with Partnership officials. The naming and concessions rights together would generate at least $10 million, officials say.

Raleigh, considered one of Hampton Roads' chief competitors for an NHL franchise, has reached an arena agreement in principle. The Raleigh News and Observer reports that Charlotte businessman Felix Sabates, who would own the franchise, and Raleigh Mayor Tom Fetzer reached an oral agreement Tuesday. Fetzer previously had criticized Sabates for wanting to use too much taxpayer money for the arena.

While remaining quiet in public, several members of the Virginia Beach City Council have suggested privately they might not support the arena. The council probably will be asked to commit $1.50 per Beach resident per year, or about $650,000 per year over the next 30 years.

Several council members said they are concerned that an arena would compete with the year-old GTE Virginia Beach Amphitheater and perhaps with the city's Pavilion convention center.

E. Dean Block, the city's director of management services, said Tuesday that he probably won't be able to balance the city's budgets without a tax increase if the council signs on to projects like the arena. MEMO: Staff writer Karen Weintraub contributed to this report. ILLUSTRATION: NHL PRESENTATION IN 5 DAYS