Wednesday, July 16, 2008

Officials: Arena study to continue without additional funding

Some County Council members still question fiscal sense of proposal

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Members of a County Council subcommittee remained wary last week about a proposal to build an arena during a time of budget cuts and fiscal uncertainties, but economic development representatives said they plan to continue studying the project’s potential.

Officials from the county’s Department of Economic Development updated the Planning, Housing & Economic Development committee Thursday morning on a multi-use 8,000- to 10,000-seat indoor arena proposed for the upcounty. The department has requested $125,000 from the county to continue its research.

The committee received its first status report on the project in April but, frustrated with a lack of answers, asked that DED officials return with more information on how much the arena would cost the county. Economic development representatives said the questions could not be answered without further study.

‘‘I have a problem with the fundamental principle here, that this [arena] is needed,” Councilwoman Nancy M. Floreen (D-At Large) of Garrett Park said at the meeting, adding that expectations were being set up for both the public and private sectors. ‘‘...I just don’t think we’ve had that conversation. Especially with the current fiscal environment, it’s just so not near the top of the list of priorities for me.”

A study commissioned by the Maryland Stadium Authority in 2006 determined that a sports and entertainment arena in Germantown could bring in an estimated $7.5 million in net revenue, and D & A Sports and Entertainment Group was awarded exclusive negotiating rights for the arena in January.

The county allocated $200,000 — including $50,000 from the state — for the first part of the project’s feasibility phase, which has already been completed.

Some committee members were displeased that the studies were being funded with public money, but economic development director Pradeep Ganguly said it was necessary to prevent private interests from steering the findings.

‘‘I do not agree that this is not an important project,” he said. ‘‘We don’t have a facility like this in Montgomery County. ...We would recapture the money that’s being spent outside of the county.”

The arena could be used for graduations, sporting events and concerts.

The requested money would fund traffic and environmental studies, an owner’s representative to negotiate with the private sector, a fiscal analysis update and plans, models and renderings, according to information provided at the meeting. The second phase of the feasibility study is expected to be completed in the fall.

The DED, which has spent $100,000 on studies thus far, intends to proceed with the analysis even if it does not receive the additional funding, according to Tina Benjamin, an economic development spokeswoman.

The county is finalizing a memorandum of understanding with D & A Sports about due diligence for the study, according to information provided at the meeting, and economic development officials are discussing ownership and financing issues with the company. Once the deal structure and feasibility study are completed, the County Council and County Executive will decide whether to endorse the arena, which would take one year to design and 18 months to build.