Posted: July 15, 2011

By Danielle Walker

danielle.walker@insidebiz.com

A new funding program overseen by the Virginia Tourism Corp. has been launched to help localities scale a financing hump for tourism projects.

Virginia Beach plans to participate in the Tourism Development Financing program, which became effective this month, to spur development of the Dome site at the Oceanfront.

The project, an entertainment megaplex in the 19th Street corridor, is being negotiated by the city and a developer, Texas-based Leisure and Recreation Concepts Inc., known as LARC.

"We are not using [state] funds, like a grant program," said Alisa Bailey, president and CEO of the Virginia Tourism Corp.

Instead, the program would help finance up to 20 percent of the project through taxes generated from the development.

Localities will be eligible to participate in the program if they have a minimum of 80 percent of funding for their project, through loans or equity.

"We are not dipping into existing taxes, these are taxes generated from the project itself," Bailey said.

The tourism bill came into existence through the Tourism Taskforce of Gov. Bob McDonnell's Economic Development and Jobs Creation Commission. The task force met from June 1 to Sept. 15, 2010, and industry research was conducted in August.

According to Bailey, research indicated that localities throughout the state needed a public-private mechanism to assist in tourism development - encompassing everything from hotels to larger-scale developments, like the Dome site.

"There were a lot of localities that said they really needed an amphitheater or a hotel, and they couldn't get that last bit [of funding]," Bailey said.

The Dome site will encompass more than 40 entertainment components near the Oceanfront. The city's website describes it as an entertainment megaplex in the 19th Street corridor.

The 8.6-acre development was an entertainment venue for more than 35 years at the Beach, before being demolished in 1994 to make way for an improved complex.

According to the city's website the Dome will "feature a variety of entertainment options and a parking garage."

"Preliminary plans for the site include the tallest Ferris wheel on the East Coast, movie theaters, a bowling alley, an ice skating rink, a 2,500-seat Broadway-style theater, children's amusement rides and much more."

Plans for what to do with the Dome site have been ongoing for years.

"It's the entertainment project we've been negotiating for the last three years," said Jim Ricketts, director of the Virginia Beach Convention and Visitors Bureau.

"There are a of couple points that we are still negotiating through, but hopefully we will have that agreement sometime this fall," Ricketts said.

Michael Jenkins is the founder and president of the development company, Leisure and Recreation Concepts Inc.

"The additional visitation that is going to occur because of that entertainment center is going to greatly benefit the existing businesses, restaurants, hotels and attractions near it," Ricketts said.

The meeting and convention business will also benefit, he said, because the entertainment complex would serve as a year-round attraction.

There is no deadline for localities looking to participate in the tourism funding program.

Details of the initiative are still being developed, according to Bailey.

She hopes the program will help encourage areas in the state to develop a sound tourism plan for the region or city, a guideline for those participating in the program.

"We are exploring an electronic [method], for those submitting a tourism plan," Bailey said. "So it will be easy for localities to submit and be less cumbersome with paperwork." nib