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SBD/April 30, 2012/FacilitiesPrint All
The United Center's owners -- Bulls Owner Jerry Reinsdorf and Blackhawks Owner Rocky Wirtz -- hope a $75-85M "retail development soon will take flight,” according to Ori & Maidenberg of CRAIN’S CHICAGO BUSINESS. Documents show that Reinsdorf “is leading a venture that plans to build 260,000 square feet of restaurants, bars, a team store and event space in the sprawling parking lot east of the arena.” Wirtz also “would be part of the venture, which could include team offices, parking, a terrace and a green roof.” The privately funded development would be “another step in the West Side neighborhood's evolution from a gritty area where people venture only for Bulls and Blackhawks games to one where more people want to live and have fun.” The documents, prepared by the Metropolitan Planning Council and “first presented to state legislative leaders in 2010, indicate the arena would add four restaurants, four bars, a team store and event space.” The proposal was “not revealed publicly at the time,” but a source said that Reinsdorf and Wirtz now “are getting ready to revive talks with city and state leaders.” One potential “stumbling block is whether the developers will have to help fund a long-discussed Pink Line station at Madison and Paulina streets.” United Center leadership also is “expected to seek an extension of a 1989 state law that currently caps its property taxes through 2017.” Taxpayer subsidies for another private development owned by millionaires “likely would be controversial, as the city and state work to slash their own budgets.” The United Center “was privately funded and its owners are not believed to be seeking any city or state aid beyond an extension of the tax cap” (CHICAGOBUSINESS.com, 4/30). In Chicago, Maureen O’Donnell noted the new facility “would be built on Lot H, known as the ‘Michael Jordan’ lot for its statue of the Bulls legend.” The source said, “He’d have a roof over him.” The source added that the roof “would link to the United Center via an atrium.” The source said, “It’s like a mall attached to a sports arena” (CHICAGO SUN-TIMES, 4/29). K.C.-based 360 Architecture has been hired to design the retail development (THE DAILY).
NBA Commissioner David Stern said Friday that the Kings "are making a mistake by passing up a good deal" on a new $391M arena in downtown Sacramento, according to a front-page piece by Bizjak, Kasler & Lillis of the SACRAMENTO BEE. Stern said, "We had come up with a scenario where the Kings could move into the building without putting a dollar of cash down. We were not attempting to induce them to make a deal that would be unprofitable for them." Stern's comments came after Sacramento Mayor Kevin Johnson announced that he and Kings Owner the Maloof family "had failed to reach agreement after two days of last-ditch talks -- and the two sides are too far apart to keep talking about building a facility in the downtown railyard." Johnson said, "It became clear today our differences are irreconcilable. This deal is not happening as we know it." Kings co-Owner George Maloof said that the team "is staying in town." Maloof: "We're not going anywhere." He also "mentioned expanding and rehabilitating" Power Balance Pavilion. Maloof said, "Right now, it's break time. Everybody's kind of burned out. I know we are." He added that his family is "going to take some time to focus on (team) operations." Stern said if the Kings can find the money to rehabilitate Power Balance, "that is something that would be good for Sacramento and the NBA." However, the league "doesn't plan to extend its loan offer to that project." Stern: "Everything is now back to square one. There is no building downtown. There is no league subsidy. There is no league loan." Stern also "warned that the Kings would be making a mistake if they rely on the league's new revenue-sharing program to make do at Power Balance." Stern: "I think that is a mistaken calculation by them. I don't think that is what the revenue sharing is meant for." Johnson on Friday "hinted that the Maloofs' reluctance may stem from their financial situation, which appears far less secure since the family sold its beer distributorship and lost ownership of the Palms Hotel and Casino in Las Vegas." Johnson said, "It just became apparent ... the economics of it for them were very difficult. Debt is real, we know that." A source said that the Kings "are carrying about" $205M of debt, "including a city loan" of about $65M (SACRAMENTO BEE, 4/28).
WHAT DOES IT ALL MEAN? In Sacramento, Marcos Breton asked, "What happens now that the arena deal is dead?" The city's downtown railyard "remains a pile of dirt" and the team "remain in a building that the Kings owners have let go to pot." The Maloof family "still could file for relocation, especially if attendance dips because the owners have turned off the fan base by killing the arena deal" (SACRAMENTO BEE, 4/29). Also in Sacramento, Ailene Voisin wrote if the Maloofs "give a hoot about a community that embraces its only major league franchise like a family member, they should find a buyer who will keep the team here and partner with the city and AEG on a downtown arena." The Kings should "cut their losses and move on." That would be in the "best interest of the league and the city, and it would replenish the family's bank account in the process" (SACRAMENTO BEE, 4/29).
The LSU Board of Supervisors at its meeting Friday “unanimously approved an $85 million expansion of the south end zone of Tiger Stadium,” according to Jim Kleinpeter of the New Orleans TIMES-PICAYUNE. LSU AD Joe Alleva and other officials spent “about 15 minutes discussing the project, which will increase capacity by about 6,900 and be self sustaining from a $100 million bond issue by the Tiger Athletic Foundation, the athletic department's fundraising arm.” The addition will include “a 1,500-seat upper deck on top of a club level of about 3,000 seats, two levels of at least 60 suites and as many as 64, with room for 24 seats in each suite.” There also will be “an area for 400 to 500 standing-room ticket holders.” The expansion will increase capacity “from 92,542 to about 99,500, which would make Tiger Stadium the seventh-largest in the nation.” Alleva said, "It's going to make Tiger Stadium much more fan friendly and it's going to look good. It will look aesthetically so much better.” TAF will pay “for the construction and use proceeds from the suite and ticket sales to retire the debt.” TAF Exec Dir Gen. Ron Richard told the board that “a survey by Price Waterhouse six months ago determined there was enough demand for 100 additional suites and 8,000 more total seats” (New Orleans TIMES-PICAYUNE, 4/28).
If the NFL and AEG "cannot make a deal within the next year or two, the Angels could be on deck, on the site now reserved for Farmers Field," according to Bill Shaikin of the L.A. TIMES. Angels Owner Arte Moreno and Chair Dennis Kuhl "met this month with AEG President & CEO Tim Leiweke," but neither AEG nor the Angels "would discuss the meeting." The Angels "can exercise an escape clause in their stadium lease" in '16. If they "do not, they must remain in Anaheim until 2029." Angel Stadium turns 50 in '16, and underwent a "substantial makeover" in '97. Shaikin wrote it is "not surprising that Moreno would talk with Leiweke." The Angels and AEG "already are merchandising partners." The Dodgers "could not challenge an Angels move to Los Angeles, at least not in the way the San Francisco Giants are blocking the A's from moving to San Jose." But this is "far from a done deal, or even the start of a deal." AEG would "rather have the NFL," and Moreno "would not limit his options to Anaheim or downtown L.A. so soon." On the "plus side for Anaheim, the hostility between city and team has long since passed, and the two sides have cooperated on the World Baseball Classic and the All-Star game." Anaheim Mayor Tom Tait said, "We love having them here, and we think they feel the same." On the "minus side for Anaheim, the city is in no position to contribute hundreds of millions of dollars toward a stadium project." Shaikin wrote, "The most intriguing wrinkle: The Angels' attendance has crashed, even after Moreno shelled out $240 million to buy Albert Pujols." The team sold 27,338 tickets to an April 16 game against the A's. For the "first time in 689 games -- a streak extending to 2003 -- the Angels sold fewer than 30,000 tickets." They did it "again on April 18, and a third time on April 19." The signing of Pujols "triggered the sale of more than 5,000 season tickets" (L.A. TIMES, 4/29).
Centerplate, “one of the big four in sports concessions, is for sale again,” according to an investment bank document cited by Don Muret of SPORTSBUSINESS JOURNAL. Sources said that the document, “a one-page summary sheet issued by Harris Williams & Co., a Richmond, Va.-based investment bank focused on mergers and acquisitions, contains specific language stating Kohlberg & Co.’s intent to sell the company." Private equity firm Kohlberg & Co. has owned Centerplate “for about 3 1/2 years.” Centerplate President & CEO Des Hague “confirmed that his company has hired Harris Williams, though not necessarily to sell the concessionaire.” Hague said, “We are currently exploring a recapitalization of Centerplate and exploring the best way to do that.” Muret notes Hague “would not provide further information.” A source said that the Harris Williams sheet estimated Centerplate “would generate total revenue this year of $825.1 million, with EBITDA of $80 million” (SPORTSBUSINESS JOURNAL, 4/30 issue).