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POLLIN AGREES TO FUND NEW ARENA IN DOWNTOWN DC
Published January 3, 1995
Bullets and Capitals Owner Abe Pollin agreed to finance a proposed $180M, 23,000+ seat arena in downtown DC. The deal, announced on December 28, will relieve DC from the $92M which the city was expected to contribute under previous plans. Pollin will provide the money for all construction costs, including overruns, while DC will provide the site and some infrastructure such as water and sewers. In return, DC will be given ownership of the arena in 30 years (Howard Schneider, WASHINGTON POST, 12/29). Pollin called the project the city's "last chance for a serious economic revival." But he did not explain how he would fund the project: "I have no idea where the money is coming from at this moment. ... I decided to take a risk" (David Alan Coia, WASHINGTON TIMES, 12/29). Pollin said his change of heart in deciding to finance the entire project had nothing to do with Black Entertainment Television President Robert Johnson's offer to finance the project in exchange for a possible stake in the Bullets and Capitals. Johnson had threatened to push for defeat of a publicly funded project if Pollin did not work under his proposal (William Gildea, WASHINGTON POST, 1/1.) QUESTIONS REMAIN: Analysts believe Pollin will be asked to put up "a big chunk of cash from his personal coffers -- possibly $50 million or more" before receiving additional financing. "Pollin is expected to try to prove to bankers that the new arena will boost the value of his teams by millions of dollars. Analysts say that he will need to win that point because he will need to use at leats part of the value of his teams, along with the new arena itself, as collateral for his massive debt to build the new arena." Pollin also faces dealing with the fate of USAir Arena, of which he is majority owner. According to county records, his debt on the property is more than $35M (Anthony Faiolo, WASHINGTON POST, 12/29).