Va. Supreme Court agrees to hear appeal over Virginia Beach arena lawsuit

Virginia Beach

VIRGINIA BEACH, Va. (WAVY) — The long battle over the failed arena deal in Virginia Beach is about to get even longer.

The developers of the failed Virginia Beach arena proposal will have their lawsuit against the City of Virginia Beach heard by the Supreme Court of Virginia.

Mid-Atlantic Arena, LLC is looking for $93 million in damages to cover the costs of developing and financing the arena, as well as projected future profits. The initial estimate of damages was $165 million.

The city terminated the deal to bring the privately-financed 18,000-seat arena to the Oceanfront back in 2017, claiming Mid-Atlantic didn’t meet all of the requirements of their agreement, specifically the financing.

“This was something that we poured our heart and soul in for so many years,” said Andrea Kilmer, CEO of ESG Companies.

The city issued the following statement Friday:

“We continue to believe that the City acted appropriately in terminating the Development Agreement regarding the arena and that the trial court decision in favor of the City was correct.  However, we are not surprised that the Supreme Court has agreed to hear the appeal, given the magnitude of the issues in the case and the amount of damages claimed.”

Mid-Atlantic sued in January of 2018, and the case went to trial earlier this year.

Following eight days of testimony in May, Judge Thomas Padrick Jr. ruled that while Mid-Atlantic “acted in good faith” he believed the financing wasn’t in place to close the deal, “according to the terms and conditions contained in the deed.”

“We felt like there was a certain amount of injustice,” Kilmer said. “The lower court didn’t really tell us why. They ruled against us, but they didn’t really pinpoint the ‘why.’ For the Supreme Court to be willing to look at our appeal, they obviously saw something in our appeal documents that gave them pause for concern.”

A month later, Mid-Atlantic filed an appeal.

“We are pleased the state’s highest court has agreed to hear this case,” said Mid-Atlantic consultant and former Virginia governor Bob McDonnell. “We look forward to filing our briefs and correcting the wrongs committed.”

McDonnell says Mid-Atlantic will argue to the Supreme Court that the lower court erred in its ruling.

10 On Your Side asked: Would the developer work with the city again, and could an arena still be in future plans? Kilmer said she’s optimistic. 

“We have a lot of assets here, we employ a lot of people here, and we still want to work with the City of Virginia Beach,” Kilmer said. “We’re hopeful that at some point, somewhere in the region, that there will be an arena.” 

Mid-Atlantic will be prepping their case for its first deadline of Jan. 3. 

This breaking article will be updated.

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