Could a bigger Norfolk arena survive if one is also built near Richmond? Operator says it depends who opens first

NORFOLK, Va. (WAVY) — Plans to bring an arena to Norfolk are moving forward, but one potential operator is warning that time is of the essence.

Oak View Group, a global company that manages and invests in arenas, said they are keeping an eye on a potential arena development outside Richmond in Henrico County. Doug Higgons, a senior vice president for the company, said the overall viability of an arena in Hampton Roads could depend on who opens first.

Oak View Group is a partner in Wellness Circle, LLC, which is the group led by Virginia Beach native Pharrell Williams and Virginia Beach-based Venture Realty. They are one of three teams vying to redevelop the 70-plus-acre Military Circle Mall. Their plan includes the construction of 1,000-plus housing units, a 200-room hotel, a YELLOW school (Williams’ non-profit), medical offices and lots of green space surrounded by a 1-mile pedestrian trail, all anchored by a 15,000-seat-plus arena.

While Norfolk City Council hasn’t taken a formal vote to select Wellness Circle as their development partner, City Manager Chip Filer confirmed the city is negotiating a letter of intent with the group.

Higgons couldn’t confidently say whether Oak View would move forward with their arena proposal, if the process continues on too long.

Norfolk began involving developers in its plan to redevelop Military Circle Mall in November 2020. In August 2021, the proposals of three finalists were released and in February 2022, the city’s former economic development director expected city staff to make a formal recommendation on the project to pursue to the City Council and Economic Development Authority (EDA) by the spring.

A recommendation from staff has yet to come, and in June each finalist team received their $100,000 deposit back “due to the extended period of time it has taken to make a decision,” according to a letter from Jared Chalk, the former executive director of the EDA.

Higgons said time is not on the city’s side right now.

“There’s a time limit, in there is competition,” Higgons said.

Developers behind Green City, LLC are moving forward with plans for a 17,000-seat arena near where East Parham Road meets I-95 in Henrico County.

Founding partner Michael Hallmark believes the arena is on track to open sometime in 2026.

“It’s really untapped markets for a major arena,” Hallmark said.

Roughly three million people combined are estimated to live in the Richmond and Hampton Roads metros. Both Higgons and Hallmark said that A-level indoor shows or sports tournaments currently don’t come to either.

Hampton Roads’ largest indoor venue is currently Scope in Norfolk. It holds roughly 11,000 people for a concert. The city determined it was not feasible to expand it and in 2019, Mayor Kenny Alexander announced the city would be looking to build a new one. Richmond used to have a similar-sized arena to Scope in the now closed Richmond Coliseum.

Higgons said Oak View Group, which recently opened the Moody Center in Austin, feels a 15,000-seat arena would put the region “on the map from a touring, entertainment and tournament standpoint.”

However two would bring complications.

“We’re not saying at all that two arenas couldn’t exist. But certainly from a business standpoint it certainly is competition to have one right up the road,” Higgons said. “There is only so much business to go around.”

He said touring acts such as Madonna, Beyoncé, U2 would likely choose one venue over the other. He also said NCAA tournaments often play where they feel comfortable and return year-after-year.

“We certainly believe that the first one of these facilities that is built in southeast Virginia wins,” Higgons said.

Hallmark agrees, but said he believes his team will move forward even if they aren’t the first.

“I do think overall we will have the preferred tour route, a preferred building, we’ll have preferred environment,” Hallmark said.

Higgons wouldn’t make the same commitment.

“We’ll see what happens,” Higgons said. “We are going to do what is best for our company. We are paying attention to all of the opportunities that exist not just in southeast Virginia, but around the country. We’ll see what happens, what makes the most sense for our company and where we believe people will come and support events.”  

Filer said he shares both Oak View Group’s concern, as well as the concern expressed by ASM Global, an arena operator that has partnered with another finalist.

“If we are able to get to these minimally acceptable terms in the next several weeks or the next month, you would see a formal vote on a letter of intent that will provide us of a window of say 12 months to come to full terms of a development agreement,” Filer said.

He doesn’t think there is a hard deadline they are facing. Rather he said there is a strong desire to make sure this project comes to fruition.

A previous attempt to build an arena in Virginia Beach failed after the development team couldn’t secure financing by the city’s deadline.

Filer said financing is the key sticking point right now in the closed door conversations.

“Where we are right now is trying to figure out the overall scope of the development. We’ve had a lot of conversations with (City) Council about the original proposal, the entire development proposal by Wellness Circle. Going through which parts the council would like changes on. Development group than goes back and tries to make those changes,” Filer said.

Wellness Circle’s original proposal asks for about $332 million of the $1.1 billion projected cost to be publicly funded through project revenues and the creation of a Community Development Authority.

Tomorrow on WAVY News 10 Today at 6 a.m., 10 On Your Side will explore how other 757 cities may also be playing a role.