THE VIRGINIAN-PILOT
Copyright (c) 1997, Landmark Communications, Inc.
DATE: Friday, January 10, 1997 TAG: 9701100500
SECTION: FRONT PAGE: A1 EDITION: FINAL
SERIES: NHL in Hampton Roads
SOURCE: BY HARRY MINIUM, STAFF WRITER
DATELINE: NORFOLK LENGTH: 112 lines
The Hampton Roads Partnership reached a historic, 11th-hour agreement with George Shinn on Thursday for a 20,000-seat, $143 million downtown arena to house a National Hockey League team.
The deal came just five days before Shinn makes his formal pitch for an expansion franchise to NHL owners in New York and calls for unprecedented cooperation between Hampton Roads cities and counties. The region's 15 largest jurisdictions will be asked to help fund the arena.
For the arena to be built, Shinn's bid for an expansion team must succeed and the deal must be approved by most or all of the 15 jurisdictions, the Hampton Roads Sports Facility Authority and the General Assembly.
It would take at least 2 1/2 years to design and construct the arena, meaning a hockey team would not play there until 1999 at the earliest.
Among the details of the deal revealed at a hastily called press conference at the Norfolk Waterside Marriott:
Shinn would sign a 30-year lease requiring him to pay $1 million per year in rent for his 43 hockey dates, or about $23,255 per game. During hockey games, Shinn would receive all luxury-suite revenue, all parking revenue from lots adjacent to the arena and a share of concessions to be negotiated - probably about 40 percent. Shinn would also receive an as-yet undetermined portion of naming rights.
The arena likely would be located on the site of the Howard Johnson Hotel just north of Scope. A parcel on Charlotte Street adjacent to MacArthur Center had been considered the leading site, but Norfolk Mayor Paul D. Fraim said the Howard Johnson site ``is now getting a lot of attention from our urban design people.''
A 1,000-car parking garage would be constructed adjacent to the arena by the City of Norfolk. Several businesses, including the Greyhound Bus Station on Brambleton Avenue, likely would be acquired to make way for the arena and arena parking.
The arena would be financed with $113 million in bonds issued by the Hampton Roads Sports Facility Authority. The bonds would require an annual debt service of approximately $8.8 million. They would be repaid with $4.8 million annually in state and local taxes generated at the facility, Shinn's $1 million rental payments, $2.3 million provided by the region's cities and counties and $700,000 in other arena revenues, including a portion of naming rights.
About $30 million in up-front funding would come from the sale of naming rights, concessions rights and beer sales rights for the arena.
The cities and counties will each be asked to pay $1.50 per resident annually for the life of the 30-year bond, as was suggested to Fraim by Virginia Beach officials two months ago. Norfolk will pay much more. Fraim said the city could put in more than $30 million for infrastructure, the arena site and parking. Fraim said he hopes the state will share in the infrastructure costs.
The arena would be owned by the Hampton Roads Sports Facility Authority, chaired by Brad Face. The group likely would hire a professional firm to run the building.
Partnership president Barry E. DuVal and Shinn pronounced the lease fair to the Rhinos, as the team would be called, and Hampton Roads residents.
``It is a responsible proposal that will compete well in New York,'' said DuVal, former mayor of Newport News, of Shinn's presentation to the NHL. ``It will provide a tool to help unite this region not only around a significant strategic asset, but around a franchise and a team we can call our own.''
Shinn, who owns the NBA's Charlotte Hornets, said the lease will please NHL owners, who have told him he must present a plan to them that ensures he will make money with the Rhinos.
``This is the best, most competitive lease we could have put together to advance our chances to land a franchise,'' Shinn said. ``I think it's fair to everyone concerned.
``Our chances of getting a team have greatly multiplied. I can't wait to get up to New York to do our presentation. We have a great lease. It's a key ingredient in getting this done.''
Rhinos officials say they are bracing for an influx of ticket sales this morning. They have been selling season tickets and luxury suites for nearly nine weeks, and are only about halfway toward their goals of 10,000 tickets and 40 luxury suites. Ticket sales cease at noon today so that sales can be audited for Tuesday's presentation.
Shinn said he is not disappointed by ticket sales, which he said have been slowed by the lack of an arena deal.
``If we'd had this deal done a month ago, we'd have sold a lot more tickets than this,'' he said. ``If we can get a big boost tomorrow, it will help us in New York. If we have 7,500 season tickets, I don't know how the NHL can say no to us.
``We sold 5,000 season tickets for a team that doesn't exist in an arena that doesn't yet exist. I think that's pretty darn good. And it's 5,000 more than anyone else has sold.''
Of nine expansion candidates, only Hampton Roads and Oklahoma City attempted season-ticket sales. Oklahoma City's ended after two weeks after having sold less than 100.
Shinn said he expects to charter a plane to carry a large delegation, including the media, on Monday to New York, where he says he will present a dress rehearsal of his presentation at a press conference. Shinn said the presentation will include an 11-minute video on Hampton Roads and, he hopes, a speech from Gov. George F. Allen.
``I am requesting that he attend,'' Shinn said. ``I'm told he might not be able to, but I'm not giving up. . . . This is the largest state in the country without a major league team. I hope he'll make arrangements to go, and I'll pay the expenses.''
Arena proponents say the facility would bring more than just a major league franchise. They expect an arena football team, NCAA basketball tournament games and major concerts that now bypass Hampton Roads to come to the new facility.
``This isn't just about hockey,'' Fraim said. ``This is about the quality of life in Hampton Roads.'' ILLUSTRATION: Color photo by L. Todd Spencer
Businesman George Shinn announces the arena deal at a hastily
arranged press conference Thursday.
KEYWORDS: NATIONAL HOCKEY LEAGUE FRANCHISE ARENA