An Uncertain Proposal: Arena Economics

DASHED DREAM, OR BIG REAGES?
WE'LL KNOW FOR SURE THIS WEEK,
WHICH IS COME FOR A PLAN
FOR AN
ARENA ON THE OCEAN FRONT.
THE DEVELOPER BEHIND IT HAS TO
LET THE CITY KNOW
IF THEY COME
UP WITH FINANCING, SECURE ENOUGH
TO SATISFY COUNCIL MEMBERS AND
STAFF.
IF THEY HAVEN'T IT IS
OVER.
IT IS AN EXCITING PROSPECT.
BUT 10 HORYOUR SIDE DISCOVERED
ALSO A RISKY ONE.
NOW, THE
INVESTIGATION AN
UNCERTAIN PROPOSAL, ARENA
ECONOMICS.
REPORTER: TOM, AND ANEMIA, THE
IDEA OF GETTING BIG
ARTISTS AND
SHOWS AND EVEN BIGGER CROWDS OF
TOURISTS TO
VIRGINIA BEACH IS
OBVIOUSLILY TEMPTING IT SOUNDS
LINE AN OBVIOUS RENT FOR THE
CITY AND SOMETHING THAT BRINGS
MORE
MONEY.
THE THING IT MAY NOT.
OTHER CITY HAVE KNOTTEN CAUGHT
UP IN THE EXCITEMENT OF A NEW
ARENA AND WATCHING INFAIL
MISERABLE.
AND TAKING
MILLIONS OF TAXPAYER
DOLLARS.
SO I STARTED INVESTIGATING IF
THAT COULD HAPPEN
HERE.
IMAGINE ALL THAT COULD COME TO
VIRGINIA BEACH YEAR ROUND IF THE
CITY HAD AN ARENA.
MAJOR MATCHES BIG
EVENTS AND
TWIG NAMES FOR LAND AND
$76.5 MILLION INVESTMENT IN
ROADS AND PARKING.
A
GREAT DEAL.
A SKEPTIC.
REPORTER: THAT'S DR. JAMES
COOK,
ECONOMIST, AND FORMER
PRESIDENT DROPPING SERIOUS
DOUBTS ON THE BENEFITS OF THE
ARENA PROJECT.
JUST ABOUT
ANY ARENA PROJECT,
ACTUALLY.
I WOULD SAY 90% HOF ALL ARENA
DEALS IN THE
UNITED STATES HAVE
BEEN DISAPPOINTING IN THAT
PROJECTIONS ARE NOT MET
AND --
INEXPERIENCE IS DISAPPOINTING.
REPORTER: 90%.
THAT'S SERIOUS RISK TO TAKE ON.
BUT
SUPPORTERS OF THE VIRGINIA
BEACH ARENA PROJECT WILL ARGUE
CORRECTLY THAT THE RISK TO
TAXPAYERS IN THIS DEAL IS LOWER
THAN IN OTHERS.
HERE'S HOW THE BREAKS
DOWN.
THE CITY'S LEASING LAND AT NO
COST TO
THE DEVELOPER.
THAT IS VALUED AT
6.1 MILLION.
AND 76.5 MILLION FOR
INFRASTRUCTURE IN PROVALMENTS.
MOORPARKING AND WIDENING ROADS
THAT
MONEY IS COMING FROM A FUND
SPECIFICALLY CREATED FOR MORE
TOURISM.
AND THEN HERE IS THE BIG
ONE,
HUNDREDS OF MILLIONS OF CITY
TAXES WILL GO RIGHT BACK TO
THURIHANNA.
BECAUSE
PART OF THE HOTEL TAX
AND TAXES GENERATED BY THE ARENA
WILL GO
TO THE DEVELOPER.
BY THE YEAR 2052, $438 MILLION.
THE CITY IS
NOT NECESSARILY
LOSING THAT MONEY, THOUGH, THE
MAY NOT EXIST IF NOT FOR THE
ARENA.
BUT
ECONOMISTS ALSO HOGGER
ANYONE GO TO THE ARENA MAY HAVE
SPENT THEIR MONEY ELSEWHERE IN
THE
CITY.
SO EITHER WAY, WHAT DOES THE
CITY STAND TO GAIN?
JOBS.
MORE WINTER
BUSINESS.
AND A BETTER QUALITY OF LIFE
ACCORDING TO THE MAYOR.
I WANT IT REALLY
BALD.

An Uncertain Proposal: Arena Economics

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