Virginia Beach arena developer sues city for $140 million after failed agreement

VIRGINIA BEACH, Va. – A developer filed a lawsuit against the City of Virginia Beach Tuesday after the city terminated its agreement to build an arena at the Oceanfront in November.

Mid-Atlantic LLC cited the City’s “refusal to honor its legal commitment to our firm and the many others.” It is asking for $140 million to recover development and financing costs and lost future profits.

The idea of building an arena at the Oceanfront had been talked about for years, but a deal between the city and developer fell apart last November. City council members voted to terminate the deal, saying terms of the agreement hadn’t been met. In the lawsuit, the developers argue they had met the terms of the deal before the deadline.

“It was the last thing we wanted to do,” reads a statement from the developers. They say the proposal to build an area is likely gone forever. “By pulling the rug out from under us at the last minute, Virginia Beach broke faith with not only our development team, a local prestigious University, and the many organizations that supported our project, but also the citizens of Virginia Beach. We are saddened for the citizens of the region who were excited for the employment opportunities and anxious to attend concerts, family shows and sports events,” reads the statement.

“We are disappointed that Mid-Atlantic has chosen this path,” City Attorney Mark Stiles said in a press release Friday. “The City did everything it reasonably could to support Mid-Atlantic’s development of an arena in Virginia Beach.”

“The City had the right, and the obligation to its taxpayers, to ensure that the loan documents committed the lenders to fund the loan necessary for the construction of the arena. The incomplete set of documents provided to the City did not do so,” Stiles continued. “The City will vigorously defend this lawsuit. We are confident that the actions taken by the City were in good faith and in full compliance with its contract rights and its obligations to the public.”

The City has retained Willcox & Savage, P.C. to assist with the defense of the litigation.

Related:

Virginia Beach officially ends agreement to build arena

City of Virginia Beach accused of breaching arena agreement 

Virginia Beach City Council votes to end arena development agreement if terms not met by midnight