VIRGINIA BEACH, Va. (WAVY) — An agreement has been made between the City of Virginia Beach and a Pharrell Williams-backed developer in hopes of bringing a multi-million dollar entertainment complex and surf park to the former Virginia Beach Dome location.

In a series of emails between acquired by 10 On Your Side, Venture Realty Group’s Mike Culpepper wrote City Manager Dave Hansen on Monday afternoon at 2:57 p.m., saying, “I hereby accept the terms of the City’s term sheet dated 12.21 v.4 which was sent to us by Ron Williams on December 21st at 2:48 pm.”

The deal came together on the final day that Venture Waves LLC had exclusive rights to negotiate the deal with Virginia Beach. The deadline was midnight of Dec. 31.

MORE: VB releases studies on proposed surf park at Dome site

MORE: Developer says surf park will boost tourism at Oceanfront

However, the agreement on he term sheet, doesn’t mean the project is a done deal. The terms agreed upon by Venture and Virginia Beach must be approved by City Council. The council will receive information on the terms of the agreement on Friday, Jan. 4, and will be briefed further at its Tuesday, Jan. 8 meeting. In his email to Culpepper, Hansen says the term sheet will be released to the public on Jan. 4 as well.

“With City Council’s approval of the term sheet – together we will be standing on first base,” wrote Hansen. “Drafting and finalizing the Development Agreement gets us to second.”

Hansen email to Culpepper promises from the City “generous annual $5M incentive program for 20 years – even going so far as to guarantee the full incentive amount during the first three years post construction.” @WAVY_News— Andy Fox (@AndyFoxWAVY) January 1, 2019

“The Dome Project” is an estimated $328 million proposal at the Oceanfront that includes plans for a 3,500 seat indoor music venue, with the possibility of an outdoor portion to bring the total seeting to 5,000. A surf park, retail, restaurants, office space and residential units are also planned.

A rendering of the proposed Virginia Beach Dome site.

The 10.2 acre complex would span from 18th to 20th streets between Pacific and Arctic avenues. The land is now a parking lot, but for 36 years prior to 1994, it was home to The Virginia Beach Dome.

In 2017, Venture Realty was selected as the preferred developer by the Virginia Beach Economic Development Authority.

Ten on Your Side first to break Story of deal done on Dome site. Councilman John Uhrin Confirms city build new Parking garage at Dome Site open to public, $30 mil for theater on site, $7.5 mil for infrastructure improvements. Paid for with tourism TIP fund. @WAVY_News— Andy Fox (@AndyFoxWAVY) January 1, 2019

The project is estimated to generate $500 million in economic impact during construction and roughly $150 million on an annualized basis thereafter, according to the Lambert Advisory groups study on the potential economic impact. They also believe it will deliver over $8.1 million in tax revenue to the city, and upwards of $4 million in parking fees, leases, and other indirect revenues.

The studies show the music venue could make the city over $1 million a year, and could create more than 300 jobs during its construction. The proposed indoor/outdoor venue holding roughly 5,000 people would be more of a direct competitor with Portsmouth’s Union Bank & Trust Pavilion, which holds 6,500, as opposed to Veterans United Home Loans Amphitheater off Dam Neck Road, which holds around 20,000.

The indoor venue would hold 2,000-plus more than the Sander Center in Town Center (1,200 capacity) and the NorVa in downtown Norfolk (1,500).

The surf park, though just steps from the Atlantic Ocean, is expected to be the centerpiece of the project and provide “perfect” waves every day compared to the notoriously flaky conditions provided in Virginia Beach by Mother Nature.

“Everyone jokes Virginia Beach for not having any waves. It’s kind of like we’re a surf town with a wave problem,” said Alec Yuzhbabenko, one of several Virginia Beach natives behind the Dome project. “There’s so much culture around surfing. There’s so many people that surf.” Yuzhbabenko believes the guarantee of ideal surfing 24/7 will attract everyone from novice surfers and professionals — including those from out of town.

Developers also hope the project will help change the culture and perception of the Oceanfront.

In a joint meeting of Virginia Beach City Council and the Virginia Beach Development Authority back in August 2018, Culpepper said Venture believes there’s a “direct relationship” between the types of businesses in the area and crime.

“T-Shirt shops and beach stores have their place … but perhaps those aren’t the elements that are going to bring people back to the Oceanfront,” Culpepper told 10 On Your Side back in May. “Create something that is new vibrant and different that will attract not only visitors from outside Virginia Beach but folks who live in the City of Virginia Beach [who don’t] come to the Oceanfront anymore.”

Residents have voiced conflicting opinions on the project. While many supported the idea of bringing both a surf park and a live music venue to the Oceanfront in a survey released in early 2018, critics are concerned about the use of taxpayer money to help fund the project — money they say could be better used for floodwater mitigation and other critical infrastructure projects elsewhere in the city.

Outgoing Councilman John Uhrin confirmed with 10 On Your Side that the city will pay for at least $7.5 million in infrastructure improvements in the area of the Dome, including a new parking garage that will be open to the public.

The city is also slated to spend $30 million for the 3,500 seat music venue. That combined $37.5 million will be paid using the city’s Tourism Investment Program Fund (TIP), according to Uhrin.

“It’s a complicated project, this is going to be, I believe, the largest private investment in the city of Virginia Beach at any one time,” said Uhrin. “There a lot of moving parts, but it’s worth the wait.”

City leaders suggest that the fund, which was created in 2011 by combining the city’s Tourism and Growth Investment Fund and Major Projects fund, is meant to be largely a tax on tourism spending (hotels, restaurants, etc.) to pay for tourism-related projects such as the Sandler Center, Virginia Beach Convention Center, etc.

Residents point out they pay into that fund too. For example, the restaurant/meal tax of 1.06 cents of 5.5 cents is paid by everyone dining out in the city, not just visitors. They’d like to see that money go into non tourism-related projects.

“It’s really important to us to bring to the market a project that is not only going to sustain itself, but a project that is going to promote revenues around this project for the benefit of local businesses and local taxpayers,” said Culpepper back in February of 2018. “The last thing we want to do is develop something that you find in every other town on the East Coast.”

In the meantime, Monday’s agreement marks a major development for the old Dome site.

“Though we have much to accomplish before a ground breaking takes place, this is that critical step to rounding the bases,” Hansen in his email announcing the deal to Virginia Beach officials.

A news conference on the deal was originally scheduled for Friday, but has been moved up to Wednesday, Jan. 2 at 10 a.m. WAVY will be there.

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NOTE: A previous version of this article stated the project was estimated to cost $337.8 million. That figure was taken from previous presentations by the developer in which the “development fee” was estimated to be at 4%, according to Mike Culpepper with Venture Realty. The argeed upon term sheet has the development fee at 2%, thus bringing the estimated project total to $328 million.