VIRGINIA BEACH, Va. (CelebrityAccess) A failed arena proposal in Virginia Beach, Va., has led to a trial, with the would-be developer suing the city to the tune of $165 million.
Mid-Atlantic Arena was behind a proposal to privately finance and build an 18,000-seat, $245 million facility next to the Virginia Beach Convention Center. The city was apparently expected to then give over the land for free, provide infrastructure upgrades and provide Mid-Atlantic Arena millions in taxes generated by the arena and a portion of a hotel tax for 30 years, according to WAVY News.
However, the City Council voted to terminate the deal in November 2017, claiming the developer had not met the requirements of the agreement, especially the financing aspect.
Mid-Atlantic needed to move $70 million in equity into an escrow by Nov. 7, according to the city, if it was going to close on a $150 million loan with J.P. Morgan Chase.
“They feel they have closed on the loan,” then-Mayor Will Sessoms said at the time. “The city feels they didn’t close on the loan.”
“I was absolutely shocked that after all the work we have done that this is what the culmination of four years was,” Andrea Kilmer, president and CEO of Mid-Atlantic Arena, said on the stand.
Mid-Atlantic Arena provided court documents that they claim show their construction loan was properly closed and delivered the required documents to the city via email prior to the deadline. Kilmer said the city stopped responding to her team hours before that occurred.
“We were concerned the bar was continuing to be raised by the city, and that we may not have been the preferred developer,” Kilmer said.
City officials, however, maintain that they never saw documentation regarding AEG, which would have been the facility manager, nor its $42 million investment before the deadline.
“City should not have thought AEG was committed to project,” said Gary Bryant, the attorney representing the city, according to WAVY. Bryant added that AEG executives, on Nov. 7, told councilmembers “We are not there yet.”
“We still want to build an arena,” Kilmer said from the stand.
The trial is expected to continue Monday.
h/t WAVY
