VIRGINIA BEACH — The president and chief operating officer of Comcast-Spectacor on Tuesday promised the Virginia Beach City Council his group would lease a proposed 18,500-seat oceanfront arena for 25 years, but the question of who will pay the estimated $350 million tab remains unanswered.
Peter Luukko called the area "one of the largest under-used markets in North America" and outlined to the 11-member council how he believes an arena would succeed. He promised to pursue a professional sports team that would be the main tenant for the building, which would be located next to the Virginia Beach Convention Center on 19th Street.
"We've done our homework behind the scenes," said Luukko, whose company owns the Philadelphia Flyers. "We've worked and researched the market together and independently. We're talking with people in sports. We know sports, and I think we know this opportunity's potential."
After the hour-long presentation to the council, Luukko was asked about newspaper reports that the Sacramento Kings are interested in relocating to Virginia Beach if a new arena is constructed.
"We've had no discussions with any teams," said Luukko, who has served on the board of governors for both the NBA and NHL. "Let me be very clear: This is preliminary. We're just getting started."
Warren Harris, director of economic development for Virginia Beach, said he will report back to the city council in late October or early November.
"What we want to get out at some point, hopefully in the very near future, is that Virginia Beach has struck a deal to develop an arena," Harris said after the presentation. "Once we do that, there will be a number of team owners who would love a Virginia Beach address as a place to operate their franchise."
Virginia Beach's population is approximately 435,000. But in his presentation, Harris defined the market as Southeastern Virginia, which extends from the oceanfront down Interstate 64 to Richmond. That area, he said, consists of 3 million residents.
But during the presentation, council member Bill DeSteph took issue with how that was portrayed.
"If we're doing that, I'd like to look at the comparison we could do with some other cities," he said. "Sacramento, for example, their true (metropolitan statistical area) is between 2.2 and 2.4 million. But if you go out 100 miles, then you're pulling in the San Francisco Bay and Fresno. San Francisco with 5 million people; Fresno with 1 (million).
"You're looking at the total MSA, if it's the way we're looking at it, of 10 million people. So we're comparing it one way for us but a different way for them. It's not apples to apples, and it's somewhat misleading."
Harris said the Southeastern Virginia model was based on Oklahoma City, which included Tulsa in its proposal.
But DeSteph's first question was about paying for the building.
"There were no numbers presented, and I think the idea of who's going to pay for this would be in a negotiation with the people we have here and the city," Harris answered.
"We're looking at an estimated cost of $350 million dollars," DeSteph responded. "My question was, who's going to pay for it. And the answer is, you don't know yet."
A few minutes later, Virginia Beach mayor William Sessoms gave his answer.
"If we get down to the question of how this is going to be paid for, it will be the people using it," he said. "And then we've got to sit back and find out who will come up with the capital to invest as the people using it pay for it. That's where we go from now."
After the proposal, Harris was asked if it would be feasible to build an arena without a strong commitment from an NBA or NHL franchise.
"No," he said. "I would think (it) would be in our interest to know there is strong pursuit and there is a professional team involved in the project. I think a firm commitment would go a long way to making sure council would go forward with the project."Copyright © 2015, The Baltimore Sun