1
Workshop Agenda
•
•
•
•
•
•
Mayor’s Welcome & Introductions
County Administrator’s Opening Remarks
Presentation by Sunrise Sports & Entertainment
County Administrator’s Report
County Auditor’s Report
Comments: Tourist Development Council and Florida
Restaurant & Lodging Association
• Board Discussion
Background
Historical Overview
• How did we end up in the arena business?
– 1988: Opening of Miami Arena and closure of
Sportatorium
– 1988: Miami Heat begins play at Miami Arena
– 1992: Hockey franchise awarded
– 1993: Florida Panthers begin play at Miami Arena
– 1994: Panthers and Heat seek new venues
– 1995: Blockbuster Park Concept
– 1996: Sunrise site selected
Historical Overview, continued
• Why? According to Sun-Sentinel articles,
– “Community maturity”
– Economic development and tourism: “…reasons beyond
sunshine, bikinis and early bird specials to visit or move to
Broward.”
– “Our own” venue
– Separate identity
– Major league status: “two hundred feet of ice may do
what 23 miles of sand have never quite done: raise
Broward County onto the list of big-league metropolitan
areas.”
Historical Overview, continued
• Why Hockey?
– Two sport strategy for new arena
– Panthers eligible for state sales tax rebate
– State sales tax rebate needed for financing
– NBA and NHL would not relocate teams to the
Arena unless their team was the sole major league
sports tenant.
– Miami Heat decided it wanted its own arena
The Arena
• Major Sports and
Entertainment Venue
• Second largest in the
southeastern U.S.
• Among the largest in
NHL (fan capacity)
• Designed for
professional hockey and
events that attract large
audiences
Panthers = anchor tenant
The Arena, continued
• Arena Site
–
–
–
–
+/- 140 acres
Six parcels
+/- 7,500 parking spaces
Park and Ride Facility
8
The Arena Partnership
AOC Annual “Rent”
Total
Annual
Bond
Payment
Annual
Completion
Bond
Payment
AOC
Annual
Payment
TDT
State Sales
Tax Rebate
$ 8 million
$2 million
Facility “Profits”
Facility
Operating
Revenue
Facility
Operating
Expenses
County
Obligations
Facility Net
Operating
Income (NOI)
“Profit Sharing” Distribution
First
$12 million =
Panthers
Net
Operating
Income
Above $12
million: 80%
Panthers
Above $ 12
million: 20%
Broward
County
Broward County’s Support
for the
Florida Panthers
1993 - Present
County Support for the Panthers
• 1996: Arena Development
Established public funding source for arena
debt
Land Purchase
Arena Construction Financing
14
County Support for the Panthers, continued
• 1999-2012: Series of loans and refinancing
transactions, including –
Loans
Refinancing
 1999 Commercial Paper
 2000 Completion Debt
 2006 Commercial paper
 2009 Fixed Rate Loan
 2010 Debt Relief Loan
 2012 Capital Improvements
2004 Swaption
2006 Refinancing
County Support for the Panthers, continued
• Funded Facility Improvements
– Applied “swaption savings” (2004)
• Lower Bowl LED Advertising Signage: $1.75 million
• Club Level All-Inclusive Club: $1.3 million
• Absolut Bar and Cruzan Rum Lounge: $175,000
– Provided a $4.2 million grant for replacement
scoreboard and control room upgrades (2013)
– Total = $7,425,0000
Research Findings
17
Team Comparisons
•
•
•
•
•
Anaheim Ducks
Arizona Coyotes
Buffalo Sabres
Carolina Hurricanes
Columbus Blue Jackets
•
•
•
•
•
Minnesota Wild
Nashville Predators
Pittsburgh Penguins
San Jose Sharks
Tampa Bay Lightning
18
Team Comparisons, continued
Arena
“Rent” Payment
BB& T Center, Sunrise
Approximately $4.6 million
Honda Center, Anaheim
Bond payments paid from
gross revenues
Jobing.com Arena, Glendale
$500,000
First Niagara Center, Buffalo
0
PNC Center, Raleigh
$ 2.5 million (plus percentage
of gross revenues)
Nationwide Arena, Columbus
0
Xcel Energy Center, St. Paul
$7.7 million
Bridgestone Arena, Nashville
$750,000
Consol Energy Center, PBurgh
$6.1 million
SAP Center, San Jose
$3.8 million
Tampa Bay Times Forum
0
Team Comparisons, continued
Location
Rent
Capital
Florida
Anaheim
Arizona

None


Buffalo
Carolina
None

Shared
Mostly Arena
Operator
St. Paul
Nashville
Arena
Owner


Pittsburgh


Arena
Owner
Arena
Owner

Arena
Owner
Shared
San Jose
Tampa Bay

None
Shared
Shared
Columbus
Operating Insurance







Arena
Owner
Arena
Owner

Arena
Owner

Arena
Owner

Arena
Owner




Unverified

Debt
Pymnt
County
Operator
City
County
City, County,
State, NC
State
Casino
Revenues
City, State
City and
County
Casino
Revenues
City
Authority
Arena Development Trends
• Sports venues as entertainment and shopping
destinations
• Sports venues as development catalysts
• Sports venues as “Live, Work, Play and Shop
Districts” or master-planned communities
Entertainment Destinations
Xfinity Live, Philadelphia
Patriot Place, Foxborough
22
Redevelopment Catalysts
Sprint Center, Kansas City, MO.
Power & Light District
23
Master Planned Communities
Arena District, Columbus
LA Live!, Los Angeles
24
Can a Major Arena Succeed
without Pro Sports?
• Four major venues
without professional
sports
– U.S. Bank, Cincinnati
– Sprint Center, Kansas
City
– BOK Center, Tulsa
– Jacksonville Veterans
Memorial Arena, J’ville
25
Can a Major Arena Succeed without Pro Sports?
• Five former NBA or NHL
Venues
–
–
–
–
–
Phillips Arena, Atlanta
Izod Center, New Jersey
XL Center, Hartford
Key Arena, Seattle
Valley View Casino
Center, San Diego
26
Can a Major Arena Succeed without Pro Sports?
• Three repurposed
venues
– The Forum
– The Pyramid Arena
– The Summit
27
Can a Major Arena Succeed without Pro Sports?
• Five awaiting
demolition
– Astrodome, Houston
– Kemper Arena, KCMO
– Nassau Veterans
Memorial Coliseum
– Los Angeles Memorial
Sports Arena
– Silverdome, Pontiac
28
Can a Major Arena Succeed without Pro Sports?
• Gone and Forgotten
– Miami Arena
– Amway Arena, Orlando
– 11 Others
• Post Arena Uses
–
–
–
–
–
Vacant Land
Parking
Convention Centers
Retail
Other development
29
Tourist Development Tax Overview
TDT Background
• County currently levies 5% of TDT on hotel
room rental and other short-term rental
lodging
• $46 million is budgeted in FY14
Statutory Uses for TDT
•
•
•
•
•
•
Marketing & tourism promotion
Sports facilities
Convention Center
Convention & Visitors Bureau
Beach renourishment
Museums, auditoriums and other cultural
facilities; and
• Other authorized uses
Remaining Fund Balance
(as of October 1, 2013)
Uses of Funds
Capital Projects
Beach Renourishment Projects*
Amount in
Millions
$33.0
Convention Center Capital Maintenance Projects
Spangler Boulevard Security Gate Relocation
$1.0
$7.2
Reserves
Convention and Visitor's Bureau (CVB) Revenue Stabilization
Reserve
$3.9
Convention Center (CC) Revenue Stabilization Reserve
Arena Bond Trustee Reserve
$3.5
$4.0
CVB and CC Enterprise Resources Planning (ERP) Reserve
$0.9
Remaining Fund Balance, continued
Uses of Funds
Amount in Millions
Other Uses
• CVB Non-recurring Marketing, Advertising and Promotions
• Museum of Science and Discovery Project
• Performing Arts Center Project**
• Convention Center Bonds Final Debt Payment
• Arena Scoreboard (Total $4.2m, in FY13 $2.5m paid)
•
Unallocated Fund Balance Available Per Unaudited Financial
Statements
TOTAL USES OF FUND BALANCE
$3.0
$2.0
$1.7
$2.5
$1.7
$1.4
$65.8
*In addition to the $33m in fund balance, the total current $49 million Beach
Renourishment budget is funded with approximately $16 million of FY14 revenue (TDT
$6.8m, State Grant $4.7m, Arena Loan Repayment $4.5m)
**In addition to the $1.7 million in fund balance, the $2 million payment to PACA is
funded with $.3m of FY14 TDT revenue.
Recurring and One-Time Revenues
Uses
REVENUES
Tourist Development Taxes
Convention Center Revenues
Arena Annual Rent Payment
State Tax Rebate
Interest Earnings
State Grant for Beach Renourishment
Loan Repayment from Arena
Less 5%
TOTAL REVENUES
Amount in
Millions
$48.7
$5.5
$4.0
$2.0
$0.2
$4.7
$4.5
-$3.3
$66.3
Recurring and One-Time Revenues Uses, continued
APPROPRIATIONS
Amount in
Millions
Capital Projects
Beach Renourishment Projects
Convention Center Capital Maintenance Projects
Convention Center Expansion Project (Planning Studies)
$16.0
$1.4
$1.0
Debt Service
Arena Debt Payment
$14.0
Operating Expenses
CVB Cultural Contribution
CVB Personal Services, Operating Expenses, Recurring
Marketing, Advertising and Promotions
CC Personal Services, Operating and SMG Expenses
TDT Revenue Collection Staff Costs
$0.6
$19.3
$10.7
$0.5
Recurring and One-Time Revenues Uses, continued
APPROPRIATIONS
Other Uses
Capital Challenge Grant Program
Performing Arts Center Project
Centennial Event
Convention Center Capital Recurring Reserve
TOTAL APPROPRIATIONS
Amount in
Millions
$1.0
$0.3
$0.5
$1.0
$66.3
Key Considerations
What’s at Stake for Broward?
•
•
•
•
$225.1 million in total outstanding debt obligations
Long-term viability of the Arena and site
Image and Reputation
Viability of the Panthers hockey team
Specific Requests
1) Rebate SSE’s annual contribution to arena
bond payments by using $4.5 million of the
County’s tourist development tax proceeds to
fund arena operations.
2) Cap SSE’s costs for the arena’s annual
windstorm insurance premiums to the first
$1 million of premiums with the County
responsible for all additional costs.
Specific Requests, continued
3) Require the County to pay the first $500,000
of arena repairs and maintenance annually.
4) Eliminate the capital expenditure reserve.
5) Limit SSE’s annual contribution to the
Renewal and Replacement account to
$250,000.
6) Modify the classification of certain operating
revenues and expenses for the purpose of
revenue sharing distribution.
Specific Requests, continued
6) Eliminate Operating Reserve account.
7) Delete monthly financial reporting
requirements and provide additional time for
the submission of quarterly and annual
financial reports and statements.
8) Limit the County’s right to audit the AOC’s
financial records to twice yearly.
9) Convert the Operating Agreement to a Lease.
Specific Requests, continued
10)Revise definitions, replace or eliminate
outdated provisions, and add clarifying
language.
11)Authorize the use of Seat Use Charges for
debt payments associated with roadway
improvements (Sawgrass Expressway ramps
to Panther Drive (NW 136 Av) via Pat Salerno
Drive.
Specific Requests, continued
12)Expand and raise the ADC’s certain
development rights by exchanging 12 acres
south of the arena for 22 acres on the north
side for future development.
13)Develop the 22 acres as a mixed-use project
with entertainment, restaurants, retail,
office, casino, residential, hotel and related
uses.
Conclusion
“The old paradigm of the stadium or arena in a
sea of parking doesn’t work anymore.”
Kevin Craft, “Sports and the City”
Questions?