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SBJ/May 26 - June 1, 2003/Special Report
Suns hopes rise with ‘reinvented’ NBA arena
Published May 26, 2003
A $50 million renovation-expansion is designed to keep America West Arena competitive.
When America West Arena opened for business in downtown Phoenix, the $90 million, cutting-edge facility drew rousing cheers from some local basketball fans and good reviews from executives around the NBA.
The so-called Purple Palace, home to the Phoenix Suns, was packed with the latest and the greatest that normally goes along with designing anew and building from scratch.
But that was more than a decade ago. Since America West opened in 1992, 17 new NBA arenas have swung open their doors from Philadelphia to Los Angeles. The newborn in the desert is now an adult, starting to show its age.
That's why arena officials in Phoenix are in the midst of a $50 million renovation and expansion to keep cash-toting fans coming back. They're also proposing a giant $25 million entertainment complex nearby to draw still more money to the area — and to fend off a new facility being built across town for the Phoenix Coyotes, the NHL franchise that is to leave America West Arena in December.
If the moves are successful, arena officials think they can help keep revenue flowing for years to come and perhaps set the tone for the way such facilities are developed in the future.
"The bigger story here is can an arena be successful in continuing to reinvent itself and stay competitive or is the only way this industry exists is to build it, use it and build a new one?" said Rick Welts, Suns president and chief operating officer.
"We think it can [succeed through renovation]. And we believe that's the story that's going to unfold here."
Carl Scheer, a veteran facilities consultant, said he thinks teams may be taking a harder look at expanding existing facilities in light of current market conditions. But he added that there is no general rule in deciding whether to build new or improve an existing facility.
Scheer, managing director at Scheer-Game Sports Development LLC, said the need to be current is a constant in today's battle for the sports and entertainment dollar.
"The consumer appetite has changed over the years," he said. "You have to keep up with the changed desires and wishes of the fans or you will be left behind."
America West Arena officials took the inside-out approach to updating a facility that draws about 2 million people annually to about 200 events.
A series of glass-laden renovations is giving a new look to the arena exterior.
The $15 million first phase saw interior concourses widened, concessions rebuilt, rest rooms added and flooring, finishes and signs given a new look. A 1,400-seat private club was created. That work, which started in July 2001 when the arena was 9 years old, was completed in November 2001.
The attention shifted outside last summer with an ambitious, glass-laden series of projects that pushed out the walls on the east and north sides of the arena.
Plans call for the new east side space to be consumed by a canopy, glass-walled promenade with outdoor activities and audio-visual displays. A live broadcast center also would be put into place. Officials want fans to think of a small-scale Fremont Street in Las Vegas.
The north side addition will house a new upscale, Italian restaurant, a Starbucks coffee shop with patio seating, and an expanded team store.
Construction on both sides is expected to be finished in October.
But that's not where the construction stops. A 16,000-square-foot, glass-enclosed atrium will be built to provide air-conditioned comfort for those entering or standing in line for tickets. New escalators are planned to give patrons easier access to their seats. This phase will be completed next March.
The city of Phoenix agreed to chip in $9.9 million toward the $50 million cost of the overall project, with the Suns paying the remainder.
Paige Peterson, the arena's general manager, said the upgrades will raise about $4 million in additional revenue annually from increased sponsorships and retail sales.
That's roughly enough to pay the annual debt service on the loan for the next 20 years and cover any additional operating costs for the larger facility, Peterson said.
Next up is a large entertainment hub being pushed for the parking lot on the arena's east side, spanning at least 60,000 square feet and including an array of restaurants and bars, Peterson said. It would dovetail with the work put into place at the arena.
If approved, the project would be privately financed by Cordish Cos., a Baltimore firm that is active in redevelopment work, according to tentative plans. Still to be determined is the Suns' stake in the complex, which requires city approval. The arena is on city property. Team and arena officials hope approval will be granted by the end of the year.
Arena officials also are exploring longer-range plans to expand the arena's footprint and capture the business generated from the city's still-evolving downtown.
But Welts said plans are more about being able to compete in the marketplace than any big-bucks boost to the team's bottom line.
"We have to get better if we're going to remain competitive and maintain the profitability of this enterprise as it is today," he said. "If we sit still, we're not going to continue to be profitable."
David Schwartz is a writer in Arizona.