SBJ/Aug. 5-11, 2013/Facilities

New Orleans Arena gets long-awaited upgrades

A hard-hat tour of New Orleans Arena reveals a mangled mess of steel cropping up from the floor like the offspring of some metallic Medusa.

It is part of the new Chairman’s Club, one of two premium lounges at event level now under construction, and a portion of a two-year, publicly funded $50 million renovation to bring the 14-year-old arena up to speed with newer buildings.

Photo by: DON MURET / STAFF
The rebranded New Orleans Pelicans are the driving force behind the overhaul, a team reclaiming its regional identity in the Gulf Coast after Saints owner Tom Benson bought the Hornets from the NBA in 2012.

The Pelicans, in conjunction with SMG, the firm managing the arena, and architect AECOM are working together to redevelop the facility. It’s a long time coming: Most arena spaces have remained untouched since the Hornets moved to New Orleans in 2002.

The retrofit reaches all levels, from the
Construction crews are working at New Orleans Arena (top) to create the Chairman’s Club, shown in rendering above.
Image by: AECOM
Chairman’s Club and revamped Capital One Club, another high-end space at event level, to the new midlevel loge boxes and new bandstand and public bars in the upper deck that speak to the rich music scene in New Orleans.

The arena’s 56 suites and the Hub Club, a group suite product and one of the team’s best-selling ticket packages, are also getting a much-needed refresh.

“Ultimately, creating a unique identity and experience for Pelicans fans is what we are dedicated to working on,” said Rita Benson LeBlanc, the team’s owner and vice chairman.

All told, the upgrades should generate minimum incremental revenue of $5 million to $7 million a year for the Pelicans, said Doug Thornton, SMG’s senior vice president in charge of the arena and the Mercedes-Benz Superdome.

As part of the new lease agreement, the Hornets’ old financial model that required the state to pay for revenue shortfalls tied to attendance levels has been eliminated. All benchmarks and financial inducements have been removed, leaving the Pelicans on their own, Thornton said.

“The same principles we applied to the Superdome renovation apply here, meaning we wanted to enhance the fan experience, rebrand the building and create new inventory for the team to generate more revenue to allow us to change the business model we had previously,” he said.

The project’s centerpiece is an 18,000-square-foot expansion of the front lobby extending outside the facility to the arena’s property line. The design is similar in scope to US Airways Center’s atrium in Phoenix, Thornton said.

The addition makes up the project’s second phase, and construction will not start until after the 2013-14 season. Inside the arena, all premium upgrades are scheduled to be finished by Oct. 1. The arena plays host to the 2014 NBA All-Star Game on Feb. 16.

When the lobby expansion is done before the 2014-15 season, the Pelicans and their vendors Centerplate and FMI will have greater opportunities to sell food, drink and merchandise. A branded sports bar will be a prominent feature, Pelicans President Dennis Lauscha said.

The Pelicans plan to activate the new lobby space with interactive games for kids revolving around an educational theme matching the team’s charitable cause, the coastal erosion that threatens Louisiana wetlands, Lauscha said.
It is an important connection to make to elevate the Pelicans’ brand to a level matching that of the Saints.

“This region is very fanatical about football and we need to make sure it’s fanatical about basketball,” Lauscha said. “That’s why every time we have an opportunity, whether it’s youth programs or game day … we need to put a basketball in a kid’s hands so we can get them excited.”

The business side remains top of mind as well. A full year after Benson bought the team, Pelicans full season-ticket sales are up 30 percent over last season. Total full season-ticket sales are expected to reach 12,000, said Mike Stanfield, senior vice president of sales for the Pelicans and Saints.

“It has been a concerted effort within the organization,” Stanfield said. “The rebrand has certainly helped, the product on the court has helped.”

Helping drive revenue for the Pelicans are 16 new loges. The four-seat boxes, midlevel on the east end, are an all-inclusive product and sell for about $30,000 annually, Lauscha said. The cost covers tickets, parking and food and drink, excluding hard liquor.

As of last week, the loges were 75 percent sold. The Pelicans, working closely with the NBA’s Team Business Operations group, decided to build the loge boxes after seeing their success across the league, Lauscha said.

The team has also renovated its north and south lounges connected to club seats priced between $2,500 and $6,500 a season.

At event level, the Capital One Club is undergoing a complete facelift to better accommodate 150 season-ticket holders paying $52,900 to $78,000 a year to put their feet on the floor. There will be a new wine room, and an existing bar will expand to the club’s outdoor patio.

The new Chairman’s Club, a 12,000-square-foot space and the arena’s most exclusive space, carries a $15,000 annual membership fee and is open to all season-ticket holders, Stanfield said. The price includes food and beverage and a personalized parking space.

Similar to event-level clubs at other major league arenas, the Chairman’s Club will provide a view of Pelicans players walking from their locker room to the court. The team took the concept one step further by designing perforated glass for those patrons to hear the players’ banter.

There are eight unsold suites among the 56 units, Stanfield said. Suite prices range from $60,000 to $240,000 a season tied to multiyear commitments.

The Pelicans are speaking with three firms that have shown interest in buying the arena’s naming rights, Lauscha said. All three are global brands, he said, but he refused to identify the categories.

“I wouldn’t want to make a prediction, but a lot of things are going positively,” Lauscha said when asked whether a deal could be signed by the time the NBA season starts in late October.

The team is also pursuing deals to name the Chairman’s Club, the bandstand, the expanded lobby and loge seats, he said.

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