Hurricanes - 5 year lease extension at PNC Arena

[tarheelhockey]

Possible delay on an upcoming round of renovations, due to COVID.

The agreement is with the Centennial Authority, an entity which represents the city/county/state governments as well at NC State University, which shares the arena.

Click to read more...

 

[Svechhammer]

For anyone asking, this extends the lease through 2029. By then, the hopes are that we either have a major renovation to PNC that brings it up to current standards (with hopes of a nightlife scene nearby, by being able to reprioritize land from the surrounding fairground property, or even creating a commercial space between the Arena and the adjacent football stadium), or a replacement site is located and an arena is built downtown, where Dundon wants it.

 

[NCRanger]

For anyone asking, this extends the lease through 2029. By then, the hopes are that we either have a major renovation to PNC that brings it up to current standards (with hopes of a nightlife scene nearby, by being able to reprioritize land from the surrounding fairground property, or even creating a commercial space between the Arena and the adjacent football stadium), or a replacement site is located and an arena is built downtown, where Dundon wants it.

Thinking out loud.

This COVID crap might make the "suburban arena with giant parking lots" popular again. Downtown arenas only accessible by public transportation may become unpopular due to crowding. Granted, seating in arenas is close, but the arena can sanitize and keep it relatively safer than dirty trains and buses. People may be a lot more willing to drive to a game and just drive back, and not worry so much about congregating pre/post game for quite a while.

PNC may be going back to the future.

 

[Mightygoose]

Looks like a positive step securing their mid term future and towards a longer term one later.

Term sheet could be approved as early as June 4, still allot to do afterwards by the sounds of it and Covid doesn't help but there's plenty of time.

 

[StreetHawk]

PNC was initially meant for Just the NC State Wolf Pack. It will be a 30 year old arena by the time this extension runs out. Wonder how much or if the operator of the arena bends over for the Canes.

I think it was mentioned in another thread that Dundon didn’t like being second fiddle in terms of available arena dates and that some weekend dates were reserved but not utilized.

 

[Svechhammer]

PNC was initially meant for Just the NC State Wolf Pack. It will be a 30 year old arena by the time this extension runs out. Wonder how much or if the operator of the arena bends over for the Canes.

I think it was mentioned in another thread that Dundon didn’t like being second fiddle in terms of available arena dates and that some weekend dates were reserved but not utilized.

Gale Force operates the arena. Gale Force is owned by the Carolina Hurricanes. Sooooooooo......

Anyway, deal is now official

 

[tarheelhockey]

PNC was initially meant for Just the NC State Wolf Pack. It will be a 30 year old arena by the time this extension runs out. Wonder how much or if the operator of the arena bends over for the Canes.

I think it was mentioned in another thread that Dundon didn’t like being second fiddle in terms of available arena dates and that some weekend dates were reserved but not utilized.

The arena operator thing is covered above.

PNC was "initially" meant for the Wolfpack in the sense of planning and fundraising in the early 90s, but that entire plan was changed (down to the architectural concept being scrapped) when they decided to pursue an NHL team. The building today was absolutely meant for the Hurricanes.

The Hurricanes are not second-fiddle in terms of availability. The process of picking dates is negotiated between the to co-tenants. The weekend date issue is a necessity borne of the fact that the NHL sets its schedule months before the ACC does, so some weekends have to be reserved for NC State without knowing whether they'll be used.

The extension signed today eliminates the Hurricanes' annual rent payment in favor of a profit-sharing model. That's a huge concession to the Canes, guaranteeing that the team won't get driven into the red by its lease obligations.

The last thing the Centennial Authority is going to do, is cause the Canes to vacate the arena and create a funding crisis for their own enterprise.

 

[Hockeyholic]

If I were to guess, Florida or Ottawa would be the new favorites for relocation. (Though the chances of any team relocating are slim to none).

 

[Barclay Donaldson]

If I were to guess, Florida or Ottawa would be the new favorites for relocation. (Though the chances of any team relocating are slim to none).

Florida Panthers have a lease that runs through 2028. They're certainly not going anywhere.

Ottawa owner Eugene Melnyk was told by Bettman that the Senators are not relocating and certainly aren't for sale. Bettman: Senators not for sale, not relocating - TSN.ca

You are right that the chances of any team relocating are none. However, there are no relocation candidates for probably the first time in the history of the league. The ownership group of literally every single NHL franchise is wealthier and more dedicated at this point in history than any other.

 

[MikeFolignosHelmet]

Rent free until 2029. Great deal.

 

[tarheelhockey]

Florida However, there are no relocation candidates for probably the first time in the history of the league.

Interesting observation.

Think of the economics of this league when Bettman took over, versus now.

 

[gstommylee]

Interesting observation.

Think of the economics of this league when Bettman took over, versus now.

I would consider that for the time being. Coyotes is the only franchise that doesn't have a long term lease but they have a stable ownership.

 

[Svechhammer]

Per the Raleigh News and Observer the funding of this extension between NCSU and the City of Raleigh and Wake County was approved this morning.

 

[Pandemonia]

I would consider that for the time being. Coyotes is the only franchise that doesn't have a long term lease but they have a stable ownership.

They dont need a longterm lease. Theyve got a sweetheart annual renewal deal to die for.

 

[TheLegend]

They dont need a longterm lease. Theyve got a sweetheart annual renewal deal to die for.

Yeah but you gotta admit.... as you are discovering.... the Coyotes are an interesting study. So interesting some people just can’t help themselves to resist bringing them up all the time.

 

[MNNumbers]

They dont need a longterm lease. Theyve got a sweetheart annual renewal deal to die for.

Just what deal are you talking about?

Most of the other team not only have long term leases, but the team gets naming rights for the arena, and management rights, so they make money on everything that happens in the arena. The Coyotes get absolutely NONE of that.

 

[TheLegend]

Just what deal are you talking about?

Most of the other team not only have long term leases, but the team gets naming rights for the arena, and management rights, so they make money on everything that happens in the arena. The Coyotes get absolutely NONE of that.

I think VC is looking at the portability aspect of it being they aren't locked in long term. They get another offer at another location they can leave on short notice. Glendale isn't going to kick them out unless they stiff them on the rent completely (still waiting to hear on that front)

Anyway.... this thread is about the Canes lease so back to that.

 

[Pandemonia]

I think VC is looking at the portability aspect of it being they aren't locked in long term. They get another offer at another location they can leave on short notice. Glendale isn't going to kick them out unless they stiff them on the rent completely (still waiting to hear on that front)

Anyway.... this thread is about the Canes lease so back to that.

Portable plus dirt cheap. Dont have it handy but Silver moose sent me tons of stuff inc NHL Lease Summaries from Marquette's Sports Law Inst and it says that the Coyotes pay less for their arena than any other team plus its auto renewed.

 

[CanadianCoyote]

The NHL would rather none of their franchises relocate, in any case. Dundon's not hurting for cash, either, so there's no reason at all to even discuss the Canes relocating when they literally just extended their lease at PNC for the next half-decade.

Florida Panthers have a lease that runs through 2028. They're certainly not going anywhere.

They do have an opt-out clause in 2023, though. I doubt it gets used unless things get extremely dire for the team, but the clause is there and it won't be until the use-by date passes that people will shut up about the Panthers. Them being in the perfect division for a QC move also won't help shut up the relocationistas.

 

[Ernie]

They do have an opt-out clause in 2023, though. I doubt it gets used unless things get extremely dire for the team, but the clause is there and it won't be until the use-by date passes that people will shut up about the Panthers. Them being in the perfect division for a QC move also won't help shut up the relocationistas.

The opt out also comes with a $72m break penalty, which is equivalent to everything they will have been paid to that point in the lease. The penalty then decreases by $8m per year over the remaining 5 seasons.

https://www.broward.org/Arena/Documents/ExecutiveSummary10-13-15.pdf

(some interesting financial projections from 2016 in there too and some very interesting number re breakdown of revenues.)

 

[MNNumbers]

Portable plus dirt cheap. Dont have it handy but Silver moose sent me tons of stuff inc NHL Lease Summaries from Marquette's Sports Law Inst and it says that the Coyotes pay less for their arena than any other team plus its auto renewed.

Please PM me some of that conclusion about how much teams pay for their lease. As I understand it, in most cases, if the team does not OWN the arena, they pay a small figure for the use of the arena.... Coyotes pay 500K/yr, some teams pay 1M. As far as the team itself is concerned, yes, this is a very good deal. They get free practice facility as well, and office space and other perks.

However, where the other franchises do MUCH better than the Coyotes is in the Arena Management business. This usually doesn't show up on the team's ledger because it is hidden in another corporation. For example, there was at one time a group called IceArizona, which owned the Coyotes, but also had rights to a 15M/yr deal to manage the arena. That's gone now, of course, but many other teams have something similar....examples:
True North Sports and Entertainment - Winnipeg Jets
Maple Leaf Sports and Entertainment - Toronto Maple Leafs
Black Knights Sports and Entertainment - Vegas Golden Knights.

By the overall measure, figuring in what the teams make off of the other business, I don't think the Yotes have as lucrative a situation as it might at first appear.

This is, after all, the real reason they want a different arena. It's the possibility of making more money off of the non-hockey aspects.

 

[Major4Boarding]

I'll add a more lopsided example in terms of revenues (till the pandemic anyway). Sunrise Sports & Entertainment (SSE) and the Florida Panthers (PHGP, LLC)

 

[tarheelhockey]

Please PM me some of that conclusion about how much teams pay for their lease. As I understand it, in most cases, if the team does not OWN the arena, they pay a small figure for the use of the arena.... Coyotes pay 500K/yr, some teams pay 1M. As far as the team itself is concerned, yes, this is a very good deal. They get free practice facility as well, and office space and other perks.

However, where the other franchises do MUCH better than the Coyotes is in the Arena Management business. This usually doesn't show up on the team's ledger because it is hidden in another corporation. For example, there was at one time a group called IceArizona, which owned the Coyotes, but also had rights to a 15M/yr deal to manage the arena. That's gone now, of course, but many other teams have something similar....examples:
True North Sports and Entertainment - Winnipeg Jets
Maple Leaf Sports and Entertainment - Toronto Maple Leafs
Black Knights Sports and Entertainment - Vegas Golden Knights.

By the overall measure, figuring in what the teams make off of the other business, I don't think the Yotes have as lucrative a situation as it might at first appear.

This is, after all, the real reason they want a different arena. It's the possibility of making more money off of the non-hockey aspects.

For purposes of this thread — the separate corporation that runs the Canes’ arena is called Gale Force Holdings. The multi-government entity which acts as trustee of the arena is called the Centennial Authority.

Both the Hurricanes franchise and Gale Force are owned by the same people, but there are a lot of obscure (or hidden) nuances as to how the money gets shuffled between the hockey team, the arena management company, and the public. Very few people actually see the entire financial picture.

 

[Pandemonia]

Please PM me some of that conclusion about how much teams pay for their lease.

Can't find those tables now in my stuff but if I do get it u can have it. Or I find it and I got my facts wrong, will let u know.

Here’s the thing, before the moose died he had his wife fedex me tons of stuff, 3 large cartons, and none of it sorted or nothing. Like billions of pages (no PDF or dropbox back then?) and most of it useless but didn’t tell her that. The moose’s arena thing was like 5-6 pages outta tons of sheets. My bf is doing a maths phd and he's always scribbling so after I glanced thru tons of reports ones I didn’t wanna keep I gave him to write on, kept only like 5% of the stuff. Most of what he writes on gets stacked on his side of the bedroom coz he never throws notes away and no way I’d wanna disturb his stuff it but later I’ll go thru it carefully when I get a chance and maybe that report is in there. With my luck, will spend hours and find I got my facts wrong.

 

[tarheelhockey]

Deal finalized. Canes will remain at PNC Arena until at least 2029.




The new lease extension includes operating expense agreements between the Centennial Authority and Gale Force, termination rights and repayment, and guarantee of performance. Additionally, it includes the commitment of the Hurricanes Foundation to contribute cash and in-kind benefits of no less than $1M per year to youth hockey and/or charities throughout the state of North Carolina, solidifying the Hurricanes' commitment to the Triangle Region.