Arena Update

We had a chance to attend the Chamber of Commerce luncheon this afternoon and hear a presentation by Dan Marvin, former city councilman and current city arena project coordinator. 

We’re starting to get a pretty good picture of the overall arena financing picture, which isn’t much different than the one we presented on this blog back in June.  We now know that 20% of the arena costs will be financed by a 2% bar and restaurant tax.  The remaining 80% of the arena costs will be taken care of by 4% occupation taxes on rental cars and hotels, Private donations, income from deals with ISG and Lincoln Traction Partners, and Arena Revenue (i.e. luxury boxes sold by ISG). 

The final component in that formula is state aid, which will come from the turnback tax, which allows the state sales tax on all new hotel/motel rooms within 450 yards of the arena to be turned back to the city over the course of 25 years.  The city will be counting on collections of about $25 million dollars from state aid, and they will back it up with a general obligation bond.  That’s where we, the voters, come into play.  That bond needs to be authorized by a vote of the citizens.  The people I’ve talked to associated with the project and in the city’s finance department are very confident that bond can be retired in short order with only the turnback tax, but if there were problems, the city would have to come up with the money to repay that bond in full.  Again, everyone involved seems to be very confident that won’t be a problem.

Some other notes:

-We learned some more of the specs:  the arena would hold 16,000, and the new development to the south of the arena (now the railroad property in between the Harris Overpass and the arena site) would include a 200-room hotel, 1000,00 square feet of retail, 100,000 square feet of office space and 100 residential units.  Part of this area would be contained along the ‘canopy street’, a covered pedestrian-friendly walk that would run parallel to 7th Street, just to its West.

-Dan Marvin told us that 95% of the necessary agreements are in place.  While he clarified that the arrangements with ISG are not yet finalized, he indicated he expects to wrap that up soon without any hitches.
Charlottesville, VA Arena (click to enlarge)

John Paul Jones Arena (click to enlarge)

-If the voters do not approve the bond next May, the arena cannot go forward, as the conditional agreements the city has entered into with the University and other parties stipulate that they will not go into effect unless a majority of the city votes in favor of said bond.  There had been some speculation that the arena project would go forward even if the voters didn’t come out in favor of it in 2010.

-I also learned that the Lincoln Arena, if it is built, will have a floor plan very similar to that of John Paul Jones arena (click picture to left for larger image), in Charlottesville, VA, which is the new home of the Virginia Cavliers basketball teams.  JPJ Arena has one end of the arena with completely portable seats that can be moved easily to transform the arena into a concert venue. 

 Below I have posted some of the artists’ renderings of the proposed arena and the surrounding area and click here to see a video giving a variety of looks at the arena from both the inside and the outside. 

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