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SBD/March 27, 2013/FacilitiesPrint All
Hewlett-Packard is “in advanced negotiations to prematurely end its naming rights deal" for the Sharks' home arena HP Pavilion, according to Arik Hesseldahl of ALL THINGS DIGITAL. HP CEO Meg Whitman said of the 15-year, $47M deal scheduled to end in ‘16, “Frankly, I’d like to get out of it.” Hesseldahl reported the change “could be announced as early as this summer.” The move is “part of a global reevaluation by HP of its marketing efforts and sponsorships." Software company SAP, with whom Sharks majority Owner Hasso Plattner works as Founder & Chair, reportedly is “interested in taking over the naming rights.” Sources said that Plattner “raised the issue of HP’s naming rights with Whitman directly during a routine meeting.” HP is a “significant SAP customer.” A change in the venue’s naming rights “would have to be approved" by the San Jose City Council (ALLTHINGSD.com, 3/26). In San Jose, Nakaso & Woolfolk report San Jose officials were “caught off guard” by HP wanting to end the naming-rights deal. But the officials said that they would have “little trouble finding a new corporate sponsor and name.” Leland Wilcox, assistant to City Manager Debra Figone, was “unaware of any talks about an early end to HP’s agreement.” But a source said that a new agreement is “under discussion for renaming HP Pavilion.” HP currently pays $3.25M per year for naming rights, with payments “split between” San Jose, which owns the building, and the Sharks (SAN JOSE MERCURY NEWS, 3/27).
The Sacramento City Council yesterday voted 7-2 in favor of a "nonbinding term sheet" for a $448M arena at Downtown Plaza, according to a front-page piece by Kasler, Lillis & Bizjak of the SACRAMENTO BEE. The city will contribute $258M, "most of it by borrowing against future revenue generated by downtown parking meters and garages." The city would borrow $212M "against future parking revenue," while much of the rest of the financing "would come from donating city land" worth $38M to the investor group consisting of Penguins co-Owner Ron Burkle, 24 Hour Fitness co-Founder Mark Mastrov, Warriors Vice Chair Vivek Ranadivé and Qualcomm Owner the Jacobs family. None of the investors "appeared at the council meeting." The arena proposal and the bid to buy the team itself will be presented in N.Y. on April 3 to "a select committee of NBA owners, who will weigh Sacramento's plan alongside a competing offer from Seattle." All NBA owners will then meet April 18 "to vote on whether the team should stay or go." Sacramento Mayor Kevin Johnson said that he "immediately texted the voting results to NBA Commissioner David Stern, but the commissioner was apparently asleep." The vote "brought a standing ovation and chants of 'Sacramento!' from the Kings fans" in attendance (SACRAMENTO BEE, 3/27). The Sacramento Bee's Ailene Voisin wrote on her Twitter feed, "Ron Burkle spokesman says all major investors will be in new york to address owners."
WHATCHA THINK? Sacramento City Council members said that they were "swayed by the potential for a grand revival of downtown." But the two council members who voted against the proposal, Kevin McCarty and Darrell Fong, said that the plan "amounted to an overly generous subsidy that could bring the city enormous misfortune if arena revenue doesn't pan out as projected." City Treasurer Russ Fehr said, "There's very minimal risk to the city's general fund" (SACRAMENTO BEE, 3/27). Council member Steve Hansen said, "I think this is the best investor group we've ever had come to the table. This is our opportunity. This is our moment. This could be the golden age of Sacramento that we are bringing." McCarty said he would support the deal if it was "a Seattle-like deal with a 40 percent city contribution with a return on our investment. Is the deal good enough? For me, it is not. The risks, I believe, outweigh the rewards" (SACRAMENTO BEE, 3/27).
BUILDING OUT: The AP's Tracie Cone notes the arena term sheet includes a 35-year "non-relocation agreement with two five-year extensions that would keep the Kings in the city until the last quarter of the century." Development partners "compared their vision of a downtown arena to other projects that have revitalized urban areas" such as Barclays Center and Staples Center. Barclays Center architect AECOM was "tapped to build" the new Kings arena. Development around the arena would "include 475,000 in office space, 300,000 in retail space, 250 hotel rooms and 600 housing units" (AP, 3/27).
After the state of Minnesota originally projected that “adding electronic charitable games would generate" $35M in taxes for the Vikings stadium project by the end of this year, that projection was "downgraded" to $17M in November and then reduced to $1.7M last month, according to Doug Belden of the ST. PAUL PIONEER PRESS. The new games were “expected to be installed in 2,500 sites, but they were only in about 180 by last week.” Minnesota Gov. Mark Dayton yesterday said, "The panic alarms are premature.” He added that there is “time for the games to catch on,” and there also are “two backups -- a suite tax and sports-themed lottery game -- in the stadium legislation.” Dayton: "We'll work this out. It's not about pointing fingers. Everybody acted in good faith" (ST. PAUL PIONEER PRESS, 3/27). In St. Paul, Joe Soucheray writes it was “wildly optimistic" to think that electronic gaming could provide most of the state's $348M obligation to the Vikings' $975M stadium project. The public has been "thoroughly fleeced" by Vikings Owner Zygi Wilf and "crew, who know their rubes when they see them." Unlike the Pohlad family, which owns the Twins and "actually wrote checks, I'm not sure Wilf will ever have to touch his own wallet.” Wilf is supposed “to come up with" $427M, but the “friendly ‘wink, wink’ loan and the naming rights seem to take care of that.” Soucheray: “Somebody will have to point out to me where exactly in this process does Wilf write a check” (ST. PAUL PIONEER PRESS, 3/27).
L.A. City Council President Herb Wesson is "guardedly optimistic" that AEG’s Farmers Field project "still has a heartbeat and that a downtown stadium will ultimately be the home of an NFL team,” according to Sam Farmer of the L.A. TIMES. Wesson yesterday said, “I still feel that it’s alive.” He added he is “on bended knees, praying.” Wesson: “We think we can see the finish line, then (the NFL) moves it back another 10 yards. But we have to keep trying. I believe Los Angeles is the place for a team. We can’t bully our way into it. When you look at the Farmers Field project, it’s the only project in town that’s pretty much shovel-ready.” Wesson said former AEG President & CEO Tim Leiweke "has done a phenomenal job, and he’s great for Los Angeles. But there’s something about having a billionaire discuss and negotiate with other billionaires that I think puts us in a better position” (LATIMES.com, 3/26). FORBES.com’s Mike Ozanian cited sources as saying that AEG Chair Phil Anschutz pulled the company off the market and parted ways with Leiweke because Anschutz "got wind that Leiweke was trying to influence the choice of a buyer for AEG." The sources added that Anschutz "became infuriated and fired him and ended the sale." Ozanian: "Makes sense. Why wouldn’t Leiweke want to have a say in who bought AEG given he was hoping to stay on? Trouble is Anschutz asked Leiweke to make sales presentations, not try to determine the winner” (FORBES.com, 3/25).
Cubs officials yesterday met with Wrigley Field area residents about "quality-of-life issues around the ballpark," with parking and traffic as the "primary items of concern," according to John Byrne of the CHICAGO TRIBUNE. About 100 people "crowded into a police station a block east of the stadium." Cubs Chair Tom Ricketts "wasn't on hand for the annual meeting." Team officials and city employees "spent most of their time talking about the past year." Meanwhile, the Cubs have 30 night games scheduled for the '13 season, and the team would like "many of its Friday afternoon games" to start at 3:05pm CT instead of 1:05pm (CHICAGO TRIBUNE, 3/27). In Chicago, Paul Sullivan reports the Cubs "want more night games, but they haven't said exactly how many they would like to add." Cubs LF Alfonso Soriano would "like to see the city ordinance that limits the Cubs to only 30 night games at home through 2015 changed." If it was "up to him, he would reverse the day-night ratio of 51 days game to 30 night games" (CHICAGO TRIBUNE, 3/27).
LEAVING WRIGLEY? In Chicago, Phil Rosenthal writes of the Cubs potentially considering leaving Wrigley Field to build a new stadium in the suburb of Rosemont, Ill., "The history and aesthetics of a bygone era give Wrigley its value and make it worth preserving. They bind it to the team, its resolutely loyal fans and its neighborhood." That is why it "makes no sense for the Cubs to leave Wrigleyville for suburban Rosemont or anywhere else." Rosenthal: "The Rosemont feint, dangerous as it might be, would have more credibility if [Cubs Owner] the Ricketts family was openly exploring a variety of alternative sites." But they "aren't actively floating ideas such as a development on Chicago's West Side that could also include commercial and residential opportunities" (CHICAGO TRIBUNE, 3/27).