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The city is paying more than $6 million to take over, now that the contract with Eastern Sports Management will be terminated.
VIRGINIA BEACH, Va. — In a Tuesday night vote, Virginia Beach City Council members voted to cut ties with the company managing the Virginia Beach Sports Center.
All but council member Sabrina Wooten voted in favor of terminating the city’s contract with Eastern Sports Management, the operators of the sports center.
“The ordinance to appropriate fund balance of the tourism investment program, the TIP fund and authorize the city manager to execute the settlement transition and termination agreement for the Virginia Bay Sports Center,” said Vice Mayor Rosemary Wilson.
Now, the city is on the hook for more than $6 million. It will also take over the facility on November 30.
The decision came after a briefing with members last week that went through an audit conducted in February. It revealed how much money the venue has made since opening.
RELATED: City Council members could vote to end contract with Virginia Beach Sports Center management, would cost $6M+
The $68 million facility opened at the Oceanfront in 2020.
Now, moving forward, the city will use money from the Tourism Investment Program to allocate money. More than $4.6 million to pay for furniture, fixtures and pay-off equipment at the center.
$1.5 million will go towards accrued expenses, such as management fees, cash advances, accounts payable, and unpaid gate receipts.
The city also used funds from TIP to complete the purchase.
During the briefing on Tuesday, city administrators said they recommended members vote to end the contract with Eastern Sports Management. They discussed the audit that reported operational losses and issues with the company’s financial statements, among other things.
Convention and Visitor’s Bureau Director Nancy Helman said because of issues — such as the COVID-19 pandemic, underperforming programming and sales, rental waivers, and other cash flow concerns — the operator said it could no longer move forward under the current operating and management agreement.
With Virginia Beach officially taking over the sports center in less than two weeks, City Manager Patrick Duhaney said they would look for an interim operator and then start the formal request for proposals process.