THE VIRGINIAN-PILOT
Copyright (c) 1994, Landmark Communications, Inc.
DATE: Sunday, November 6, 1994 TAG: 9411040302
SECTION: VIRGINIA BEACH BEACON PAGE: 12 EDITION: FINAL
TYPE: Cover Story
SOURCE: BY TOM HOLDEN, STAFF WRITER
LENGTH: Long : 449 lines
SUPPORT ON THE CITY COUNCIL for a 20,000-seat outdoor amphitheater is nearly unanimous, but for four years council members have debated how exactly it should come to pass.
Various sites have been located, but no deals have been struck.
Funding is available, but no money has passed hands on any property.
A July 1993 study by Price Waterhouse concluded an amphitheater in Virginia Beach would be a financial success if it were large enough. At 20,000 seats, the beach facility would be more than adequate.
The city has even selected a concert promoter, Cellar Door, but no one even whispers the first syllable of a big-name act.
Council members have taken several trips to Hardee's Walnut Creek Amphitheater in Raleigh, N.C., to see first hand how a first class-public space could look. There were rave reviews, wishful comments, glad handing all around. But still, no deal.
Now, with debate heating up again on the proposed $13 million facility, it is time to find out where exactly council members stand on a project that could transform the region's reputation as an East Coast concert haven.
Last Tuesday, council huddled in executive session to discuss the amphitheater, but emerged with no public comments.
The debate centers on several issues, chief among them are the location and funding. The preferred site is known as Princess Anne Commons, a 112-acre site adjacent to the municipal complex.
The city wants it and was willing to pay $1.3 million for it, until a private company raised the ante by $300,000. The land is controlled by the Resolution Trust Corp.
Even if the city met the match, it would still need to hold a public hearing on the issue, and the amount of additional money it might have to pony up remains unknown or undisclosed.
Whatever obstacles, council members say they're keeping their sights fixed on the successes in Raleigh.
Opened in 1991, the Hardee's pavilion at Walnut Creek has been a remarkable success. In just under four years, it has become one of the top 10 grossing amphitheaters in the country, welcoming almost 2 million visitors through its gates in four years. In addition to taxes, Raleigh received a percentage of the gross receipts, a combination that last year brought in $1.3 million to the city.
The North Carolina city's convention bureau has estimated that the amphitheater helped generate $23 million in business for the city, when overnight hotel rooms and spending on food and gifts are considered.
Lured by such numbers, Virginia Beach hopes its own amphitheater will generate $800,000 to $1 million in tax receipts if it can attract 400,000 concert-goers per season.
All it needs is a site, a sponsor, approval from the public, an inked deal and a set of blueprints. [questions] Are you committed to having an amphitheater built in Virginia Beach?
Louis Jones (Bayside borough): I never commit to anything until I see all the facts, and I don't think anybody has seen all the facts yet. We don't even know what the final terms of the contract are.
Nancy Parker (At Large): Sure, I think it would be a great idea. Why not? It would be a nice amenity for the city. I don't think it is one of those things that are going to make or break who we are.
Barbara Henley (Pungo borough): I support building an amphitheater.
Linwood O. Branch III (Virginia Beach borough): Absolutely. I've had involvement in the Star Spangled salute with the troops returning from Desert Storm, I've been involved in concerts produced by Ocean Breeze and the Labor Day concerts. What I personally witness is that our residents are more than ready for a first-class venue and first-class entertainment. I couldn't be more supportive of that concept.
Louisa M. Strayhorn (Kempsville borough): Absolutely. Right from the beginning I thought the concept was great. When I took a look at Raleigh's sound system and the things they did to protect the environment, I was sold. For me, it's very exciting to be on City Council
at a time when I have the opportunity to vote on a distinctive competence for Virginia Beach.
Meyera Oberndorf (Mayor): Yes.
W.W. ``Bill'' Harrison (Lynnhaven borough): Yes.
John Baum (Blackwater borough): I'd like to see it. Yes.
W.D. ``Will'' Sessoms Jr. (Vice Mayor): It's just a golden opportunity for the city of Virginia Beach. This is one project that will benefit both the citizens and our visitors. Period.
John D. Moss (At Large): I am committed to the right of free enterprise within our capitalistic system to invest and risk private sector funds to make a profit. If the market supports the return on the investment to support private investors constructing and operating the amphitheater, I have no objection.
Robert K. Dean (Princess Anne borough): I'm committed to economic development for the city of Virginia Beach in the area of high paid, skill-required jobs that you can raise a family on in the service and manufacturing sector. What are the benefits and/or liabilities of building an amphitheater in Virginia Beach?
Louis Jones (Bayside borough): The benefit is it's an amenity to the city that appeals to a large portion of the 18 to 30 age group. If the city has an opportunity to provide good, clean entertainment for that age group and can do it in a responsible way, then that's a benefit. Over the long term, one of the benefits would be the tax revenue the city would receive. There is always a risk that it would fail. Based upon the information we have had presented to us, the prospects look good that it would be a success.
Nancy Parker (At Large): The key is going to be finding the right place, one that does not impact the neighbors and one where we can be sure that the area surrounding it does not become a quick, fast-food strip. It provides exposure for the city, and another avenue of entertainment for the people at the Beach. There are those who say it would provide additional tax benefits. That, I can't verify at this point. We have not seen a true cost analysis; we just have a summary done by Price Waterhouse several years ago and it's probably dated material by now.
We still have to have a public hearing for this and to make sure that everything can be paid for.
Barbara Henley (Pungo borough): I think it's an addition to what we have to offer tourists as well as an opportunity for our own citizens, and those of the region, to have a good facility. It will have good tax benefits for the city as well. There is always the possibility that it won't perform as projected. But I think the projections are very favorable for recovering costs and to have taxing benefits for the city. There are concerns that wherever it might be sited to make sure it's not an adverse contributor to traffic and noise.
Linwood O. Branch III (Virginia Beach borough): Other than bringing excitement and a sense of community to our city, the amphitheater is a jewel in our crown as a city. I think when people share a common experience, it creates a sense of community. Also, from projections I've seen, the amphitheater would have positive effects on revenue, with people coming to town and spending money. It's a draw. It's the same concept that downtown Norfolk has done with Waterside.
Louisa M. Strayhorn (Kempsville borough): We're going to increase revenue streams to the city. It's a form of enterprise that local people will have access to and it's something to improve the quality of life in Virginia Beach. This is one of the big pieces in terms of expanding tourism in the area. There are two populations that will benefit from it - not just outsiders, but people who live here because we're going to have another opportunity to have music and plays brought to us. I'd like to do that without having to leave town.
Also, it's a welcome sign to visitors who want to come to our area.
Meyera Oberndorf (Mayor): Having attended Wolf Trap and the amphitheater in Raleigh, N.C., the opportunity for the Beach would be similar to the positive experiences that have been had on those locations. The thing that drove it home to me was the positive response from the public to the music festival over the Labor Day weekend. Even if an amphitheater is not a reason for people to come, wouldn't it be nice for the city to do something to create a positive and safe atmosphere for its own citizens? It could also be used for summer theater productions.
The liabilities are that we're going to have to enter a public-private partnership to create the kind of economic situation that will encourage and keep a legitimate developer interested. There is a liability in that a lot of people feel it should be done strictly by the private sector. But I want to protect the public purse. I don't want to open the public wallet and allow an entrepreneur access to the public wallet with no accountability. It would be a win-win situation for the citizens who live here, those who make money at the Oceanfront and from the perspective that we will be able to enhance the entertainment possibilities for Hampton Roads
W.W. ``Bill'' Harrison (Lynnhaven borough): With any large project, there are incumbent liabilities. It's going to have impacts on traffic, for certain. And we're going to have to deal with those impacts and manage them. Once we locate the site, we're going to have to give the amphitheater the best possible chance for success, not just the people in Virginia Beach but the entire region.
You're talking about liabilities, there's access, there's public safety, and there's a perception of noise, which I don't think is a real liability.
The benefits are overwhelming, in terms of prestige that it brings to a community with a world-class theater. There are 10, maybe 12, that are world class and only a handful of those are of the caliber we're thinking about building here. We will be able to attract world class entertainment and that'll bring prestige to Virginia Beach and the entire community. It'll improve the quality of life we have here. It's the type of thing that the people in this region expect to have. And, we need to provide it. I think it'll have a positive impact on our tourism and a positive impact on the quality of life of the folks who live here.
John Baum (Blackwater borough): Well, we took this trip to Raleigh and from what I saw, I think it'd be very popular for the South
Hampton Roads area. Also I think it would help (the V.B. tourism industry) in the shoulder seasons.
W.D. ``Will'' Sessoms Jr. (Vice Mayor): Candidly, the business deal I think we can put together. Yes, there is some risk, but a very minimal amount. And as such, I feel it's a good deal for the city.
John D. Moss (At Large): The real question is what benefits and/or liabilities of building an amphitheater does the private sector see? Since the private investors have told the city that our market is NOT affluent enough to support an amphitheater without major taxpayer subsidies, the liabilities are risk, redistribution of income and the opportunity costs of alternative municipal investments. Of the projected direct tax revenues, over 90 percent go into TGIF (the city's Tourism Growth Investment Fund for building tourism related projects). Thus, the general public, in terms of schools and public safety, yields little to no direct benefit.
Robert K. Dean (Princess Anne borough): The benefits would be an additional attraction, a place to hold outdoor concerts and something to do for the locals. Benefits for tourists are very limited - only 2 percent of attendants would come from tourists. The liability to the city would be none if built with private sector investments.
Louis Jones (Bayside borough): I don't think there is any question there will be a public private partnership. If there is a question, it's the structure of that. When I say question, I don't mean that in a negative way. The details of that structure have not been worked out completely. I don't think there is any question that an outside company will do a major portion of the financing. But the city will have some money in the project. I'll go this far. Based on what we have done in the past, based on the race track deal, if we had gotten it, and the way I see this deal here, whatever we put into the project, if for any reason that it would fail, those assets would be useful to the city for other purposes. For instance, a major portion of the city's investment will be land or parking. If it were the Princess Anne Commons site, it would be useful for the Municipal Center. You have to think in terms of the alternative uses of the assets if the project were not successful.
Nancy Parker (At Large): That is still up for debate at this time . . . It depends very much on what the payback is to the city. We really have not gotten those numbers put on the table, so I don't want to cut opportunity off by making statements in the newspaper that would preclude any decisions that could be made.
Barbara Henley (Pungo borough): A public/private partnership is definitely the way to proceed . . . I'm not sure where we are in the contract process. We have to have a site in order to go ahead with any particular contract. Each site would have to be identified to see if the benefits allow the city to sweeten the pot, whether the revenue stream and the tax benefits would recoup the costs from the city in X amount of time. That's what we have to look for. I would have to see the total figures in the package.
Linwood O. Branch III (Virginia Beach borough): For the city share, we're looking at TGIF revenues and supplement the general fund. The financial aspect is a plus. The project proposed is actually a much better deal than down in Raleigh, with our public sector involvement and better demographics. If Frank Sinatra came to town, where would we put him? I think we're more than ready for an amphitheater.
Louisa M. Strayhorn (Kempsville borough): Given the area we're in, there is nothing wrong with a public and private partnership. We could look at that as the city showing other people who want to invest in our city that we're willing to take a risk. Because of water shortages, our best bet is through tourism expansion. It's like jump starting economic development again with commercial companies or expanding tourism.
Meyera Oberndorf (Mayor): I would like to see a public-private partnership, where the cost benefits would favor the taxpayer. Where it would generate enough income to pay for itself in four to five years. My optimum would be to generate enough income from the very beginning, but being a realist, it may take as long as four or five years.
W.W. ``Bill'' Harrison (Lynnhaven borough): I think that - I'm just going to speak in real terms - the city of Virginia Beach by virtue of its 10 percent admissions tax, which is one of the highest in this region, makes itself a 10 percent partner in any kind of a private enterprise of this nature. And, while that admissions tax has helped fund some important projects and will continue to do so in the future, I think we have to recognize it may be necessary to leverage those tax receipts to attract private investment. Therefore, I think a combination of public and private funds, makes the best sense. I think the financing package that we present ought to absolutely insure that the taxpayers will be repaid over a reasonable period of time. When I say repaid, I mean using a ``cost-of-funds'' analysis. If we say the city's investment is X, what is the city's cost of funds (interest rate), and what is the period of the payback. You can figure out the annual payback. The private developers will have to assure the city of a minimal annual payback that will work. The Mets did that over at Harbor Park. That's the kind of financing I'd be looking for here. It would have to be a substantial private investment as well. I think the problem is Virginia Beach will have to prime the pump a little bit.
John Baum (Blackwater borough): I know we're going to have some type of a partnership. But what mix it ought to be, I really couldn't say. I'm going to listen to the advice of others on that.
W.D. ``Will'' Sessoms Jr. (Vice Mayor): The key thing to me is that if there's any debt taken on by the city for this project, the income produced should cover the debt.
John D. Moss (At Large): It is an entertainment venture like a movie theater, roller rink, amusement park, bowling alley etc., and thus should be financed totally by private investors. The economy is not well served when government artificially creates markets by government subsidies.
Robert K. Dean (Princess Anne borough): Through banks and various financial institutions. I was not supportive of those additional taxes being placed on the residents (with the TGIF). When are we going to start building funeral homes? When are we going to start selling autos and open a car dealership? Why don't we start building swimming pools and open one for the city? Why don't we start building hotels at the oceanfront? I'm not a believer of the public sector closing the door to the private sector. . . I'm vehemently opposed to the intrusion of more and more government to the free market area. Every time government builds something you've lost the taxes if private sector had the opportunity to build it. Is there an urgency on the city's part to build an amphitheater, and are you aware of any other efforts by neighboring cities in Hampton Roads to build one?
Louis Jones (Bayside borough): I'm not aware of any efforts by any other cities. There may be some, but I have not heard any. I don't feel any urgency. I'm more inclined to look at what the deal is than act on any urgency basis.
Nancy Parker (At Large): Urgency makes it sound as though the city will dry up and die if we don't have one. I don't think that's the case. It would be something that would be a nice addition to the city. It would be great if we had one.
Barbara Henley (Pungo borough): I have heard that other cities are interested. I think it would certainly be one of those good things for Virginia Beach, if we can achieve the deal in the appropriate time. I want to proceed expeditiously but cautiously. We don't want to rush into something that turns out to be a bad deal.
Linwood O. Branch III (Virginia Beach borough): The city's been involved in this issue for two years and it's coming to a point where we're either going to do this project or not do it. We've received bids from all the top operators in the country and we got what I consider to be the best promoter in the business. All studies indicate the amphitheater would be a success. There comes a time when it's going to happen or not going to happen.
Louisa M. Strayhorn (Kempsville borough): Yes, I think there is an urgency. I think this is a window of opportunity and you can't let them go by. Of course, there have been rumors that other cities would like an amphitheater, and I wouldn't begrudge other cities the opportunity. I believe in regionalism but it's foolish for us not to take advantage of this. Now, there's excitement in the air.
Meyera Oberndorf (Mayor): The urgency is that Bill Reid (of Cellar Door) has been very interested in having the opportunity to have an amphitheater in the Beach where he lives and works. He has taken the time to expose council to the possibility of it. He even brought (the singer) Bruce Hornsby here to meet the Resort Area Advisory Commission.
W.W. ``Bill'' Harrison (Lynnhaven borough): I'm not aware of any neighboring city trying to build one. Is there an urgency? Yes, but it's not driven by any competition from outside cities. But, there's an urgency driven by the fact that we've been working on an amphitheater project over the last two years. We believe that we have identified a capable, qualified developer (Cellar Door Productions), and I think that if the city doesn't move forward with this, then the momentum may be lost and the developer may find interest elsewhere. This is a large region - a region that can support an amphitheater. If Virginia Beach is not the home city, then certainly there is a risk of losing it to a neighboring city. The region would still benefit. I think there's a commitment by Cellar Door to locate in Virginia Beach and I appreciate that commitment. And I think we ought to honor that commitment and build it in Virginia Beach.
John Baum (Blackwater borough): That's the thing that puzzles me. I think the other Bill Reid (of Cellar Door) wants to get started shortly. Otherwise I don't think there would be any urgency on the city's part. I'm favorably impressed by him. He's somebody (who) knows the business. If we don't start reasonably soon, it'll be another year gone by. I'm not aware of any other (competing) cities.
W.D. ``Will'' Sessoms Jr. (Vice Mayor): I think to respond to that question could be detrimental to negotiations that are currently going on.
John D. Moss (At Large): My sense of urgency matches the private sector's willingness to independently pursue an amphitheater.
Robert K. Dean (Princess Anne borough): Is there an urgency from the private sector to build this amphitheater? Is there an urgency for Cellar Door to build it? Am I supposed to be on their time schedule? We've got businesses all over this city that have received no financial assistance whatsoever from the city of Virginia Beach. The few well-placed and well-chosen have the keys to the city's coffers. We're not playing on a level playing field. . . Let some high profile people come in like Hardees or McDonald's - even Sentara Health System - and let them build it. Let them come forth with the venture capital.
If this is such a great deal, let the private sector have the opportunity to put the deal together. If a neighboring city or financial institution or group of investors would like to build an amphitheater in Virginia Beach, I think that would be fantastic. It's called regional cooperation. Is Princess Anne Commons no longer the site for the amphitheater, and if not, then where should it be located?
Louis Jones (Bayside borough): The council, as I understand it, feels that the Princess Anne Commons site is a useful site to the city whether or not the amphitheater goes there. The city recognizes there may be a future need to expand the municipal complex. It's one of the sites. Council has not said specifically that that site will be used.
Nancy Parker (At Large): It has to go through a public hearing. The public still has a right to have its comments heard. Princess Ann Commons is an option, but it may not be the only option. That's all I'm going to give you.
Barbara Henley (Pungo borough): It's not totally ruled out, but with that site, and probably any other, there has to be a conditional use permit which involves a public hearing. That's been an unfortunate oversight in some newspaper articles. It's not a done deal until we've heard from the public. .
Linwood O. Branch III (Virginia Beach borough): Even though Virginia Beach is 310 square miles, there's only a limited area where the amphitheater can be located, given that half the city is out of the equation. The northern half is built out and there's noise zone limitations. The area along the southern side of Princess Anne Road is the only viable area. We've gone through several different site locations and rejected them. Nothing would please me more. I think the people of Virginia Beach would love this facility. If folks have never been to an amphitheater, they're in for a very pleasant surprise.
Louisa M. Strayhorn (Kempsville borough): There's nothing I can tell you about it now. I hope that the discussion we're having on the amphitheater will generate comments from the public. Those of us in favor of it need to know and those who are iffy need to know, too. I think confirmation from the public is really important.
Meyera Oberndorf (Mayor): Princess Anne Commons is, to my understanding, the site of choice from those who know the amphitheater business. But there are other sites under discussion. I want a reasonable piece of land with the least possible impact on the surrounding countryside and the public purse so it can be built.
W.W. ``Bill'' Harrison (Lynnhaven borough): Princess Anne Commons is my first choice for an amphitheater, but there are lots of other options. I'd like to add one statement to that, because I don't want to blow this baby. That site would need a conditional use permit and we would have to go through the requisite public hearings for a use permit. Any site would be subject to that process. As a councilman, I'm obligated to listen to the public and weigh their concerns.
John Baum (Blackwater borough): There is some neighborhood opposition. Otherwise I think it's a good site.. . . We hear all sorts of rumors and the more rumors you hear, the more doubt it casts. I'm kind of hoping that (a proposed private) bid is not bona fide. In that case we'd have it at (Princess Anne Commons) and it would be a matter of whether you should use city property to run an amphitheater. But we have to get past that hurdle. Apparently they (the RTC) rejected ours and accepted theirs. That part bothers most of us more than the rest of it. We don't want to be bidding against ourselves in some kind of a setup.
W.D. ``Will'' Sessoms Jr. (Vice Mayor): We're at a critical stage right now, and I hope others don't respond on that one. I hope you know where I'm coming from. I want this project so bad that I think if we start negotiating it through the newspaper or let someone think they have the upper hand on something, it would be to the detriment of the deal.
John D. Moss (At Large): No property is zoned as a matter of right for an amphitheater. If and when an amphitheater is constructed by the private sector a conditional use permit will be required. Without the benefit of a public hearing it is inappropriate to pass judgment on a specific site for a privately financed amphitheater.
Robert K. Dean (Princess Anne borough): That site is an unknown, according to the marketing done by Cellar Door. They felt that this site had more advantages than other sites. Whether or not this is the only site in the city, I don't have that answer. And if you're asking if this site is eliminated, would that be the end, I would say probably not. There are other sites available.
I had given both the Pace Corporation and Cellar Door several locations, one of which is the old Pungo airfield. The land's already cleared and paved with concrete, you would only have isolated neighbors, there's acres and acres. That would make good sense. I liked that site but I have no idea whether it's still in the running. MEMO: Staff writers Bill Reed and Pam Starr also contributed to the following
question-and-answer reports.
ILLUSTRATION: Staff photo by Ian Martin
Hardee's Walnut Creek Amphitheater in Raleigh, N.C., above, is the
model that Virginia Beach officials are using in their plans for a
20,000-seat-facility here.[cover photo]
Staff photo by MORT FRYMAN
The preferred site for the 20,000-seat amphitheater is known as
Princess Anne Commons, a 112-acre site adjacent to the municipal
complex (foreground).
Staff photo by IAN MARTIN
Build it and they will come. That was the case in Raleigh, N.C.,
where fans have streamed into the Hardee's Walnut Creek
Amphitheater. Since its opening in 1991, 2 million visitors have
been through the gates.
Staff photos by IAN MARTIN
Happy customers helped Raleigh bring in $1.3 million in taxes and a
percentage of gross receipts last year.
Concession stands and a picnic area at Raleigh's amphitheater add to
the public coffers.
Staff map
Proposed amphitheater at Princess Anne Commons
KEYWORDS: AMPHITHEATER VIRGINIA BEACH PROPOSED by CNB