Monday, February 27, 2012

New Arena Deal Achieved

This morning a tentative deal was announced to build a new arena in the downtown railyards and it  looks as if it will bridge the funding gap many people including myself did not see doable. Details are expected to be released in a term sheet by the city this Thursday. Thus far, here is what has been disclosed.

More than half the money would come from leasing the city's parking to a private operator, but the team's owners say they've also agreed to pay $75 million upfront.
The city will contribute $200 million to $250 million to the deal, primarily from leasing its parking garages to a private operator.
Other small pots of money include revenue from cell phone tower leases and electronic billboards. The deal does not include a hotel tax.
The city will collect a 3 percent to 5 percent surcharge on every ticket for every event at the arena, both sports and nonsports. That revenue will go directly into the city's general fund. That figure is expected to be in the millions of dollars annually, and will cover a portion of the $9 million in lost revenues from the city's planned lease of its downtown garages.
The Maloofs will pay off their current $67 million loan with the city. They will obtain a new, longer term loan, using the team and arena-related revenue as collateral.
Entertainment conglomerate AEG has agreed to pay nearly $60 million for the right to operate the city-owned facility
The City Council is expected to vote on the deal at its March 6 meeting.

No comments: