Mobile Already Pays $11.1 Million a Year on Regions Arena Debt, and the $14.7 Million Fraud Won’t Change the Bill
Mobile is paying about $11.1 million a year in interest on Regions Arena debt, with payments rising to about $21.1 million in 2031. The $14.7 million fraud leaves that schedule untouched but could squeeze other city priorities.
MOBILE, Ala. — Regions Arena has not hosted its first event, but Mobile taxpayers are already paying for it, and the city’s recent $14.7 million fraud loss will not change a dollar of what is owed on the building.
The city now pays roughly $11.1 million a year in interest on the arena bonds. Starting in 2031, those payments are scheduled to climb to approximately $21.1 million annually, covering both principal and interest, and to stay there until the debt is retired in 2045.
The theft, which involved a construction-related payment rather than a payment to bondholders, sits entirely apart from that schedule. Mobile owes exactly what it owed before the money disappeared. What the loss does affect is the pool of money available for everything else.
The numbers at a glance
- Arena project cost: about $300 million
- Bonds issued: about $250 million, in March 2025
- Current annual arena payments: about $11.1 million, interest only
- Annual arena payments starting in 2031: about $21.1 million, principal and interest
- Debt retired: 2045
- Hotel and short-term lodging tax: raised from 8% to 10% in 2025, with part dedicated to arena debt
- Fraud loss: $14.7 million
Rising arena payments, falling total payments
A jump from $11.1 million to $21.1 million sounds as if the city’s total debt bill will swell around the turn of the next decade. The city’s audited numbers tell a different story.
According to Mobile’s 2025 audited financial report, total annual payments on all outstanding city bonds are expected to fall from about $33.8 million in fiscal year 2027 to $21.1 million in 2031. That is because the city has been paying down older debt, with those remaining obligations scheduled to be finished by 2030. By 2031, in other words, the arena is projected to account for essentially the whole scheduled payment.
There is one significant caveat. Those figures reflect only debt on the books today and do not account for any new borrowing a future mayor or council might approve.
How the arena was financed
The financing plan was built under former Mayor Sandy Stimpson, whose administration maintained that Mobile could afford the arena without cutting existing services or giving up future investments. The city issued about $250 million in bonds in March 2025 to help pay for the roughly $300 million project.
Visitors help shoulder part of the cost. In 2025 the City Council raised the city’s hotel and short-term lodging tax from 8% to 10% and dedicated a portion of that revenue to the arena debt.
The debt was always part of the city’s long-term plan. The fraud was not.
What the fraud does and does not change
The $14.7 million was diverted when a fraudster impersonating arena contractor B.L. Harbert International persuaded the city to send a payment to the wrong account. Mayor Spiro Cheriogotis has said the loss will come from a contingency built into the arena’s budget.
Bondholders are not involved in that transaction, so the fraud does not move any payment dates or amounts.
But unless the money is recovered, that $14.7 million cannot go toward streets, sidewalks, public safety, neighborhood improvements or other priorities. The city has said its reserves and other available resources are sufficient to protect services, capital projects and its financial stability. Federal investigators are working to recover the funds.
Cheriogotis has also acknowledged the possibility of longer-term effects, saying earlier that the pain “is most likely not to be felt until next year” and that he could not promise future capital projects would be untouched. He also said the city has a year to try to close the gap and recover every dollar it can.
Putting the loss in perspective
Spread across the 20 years of the arena financing, $14.7 million works out to about $735,000 a year, less than $1 million annually that could otherwise have gone toward other projects. The city has separately estimated the loss at about $22.2 million in bond payments over 20 years.
Either way, the amount is small compared with the $21.1 million annual arena payment that begins in 2031, but it is not small compared with the projects a city council debates each budget cycle.
Questions for the months ahead
The key unanswered question is how much of the money Mobile will get back, and what any permanent loss will mean for the city’s other needs. The answer depends on the federal investigation, on any recovery from the banks involved and on the city’s insurance. The mayor has said the city’s cyber coverage will not make it whole.
The City Council’s Finance Committee is scheduled to meet Nov. 3 and Nov. 17 to discuss the transaction. Those working sessions will not include public comment, but they are likely to be the next place the financial picture comes into sharper focus.
Meanwhile, work on the arena continues downtown, and the building is already booking concerts for 2027, including Def Leppard and the Goo Goo Dolls on April 20. The city also plans to demolish the Civic Center expo hall before the new building opens.
