News Article: Hurricanes Extend Lease at PNC Arena for Five Years

[tarheelhockey]

At some level I’m sympathetic with both sides here.

As a NC taxpayer, and understanding what all businesses/agencies are going through right now financially, it’s perfectly reasonable for CA to push back on a $2.6M/year budget hole. That’s peanuts in the scheme of things, but the money has to come from somewhere. As a public agency they’re required to be good stewards and not just throw cash around.

On the other hand, I can also understand Dundon pushing for a deal to get done ASAP. He and other NHL owners are faced with a wildly uncertain future, and keeping the arena up-to-date with a stable lease is mission-critical. Sure, he’s a billionaire and an NHL team could cut a $2.6M check, but that’s real money over the term of the lease. He could buy several Scott Darlings with that kind of cash.

In conclusion, I propose the Darling be adopted as a standard unit of financial risk representing the worst possible potential waste of $4.15M per year. For example, in signing Alex Semin to a long term contract, the Canes took on 8.43 total Darlings at a rate of 1.69 Darlings Per Year. When they bought him out, 3.37 of those were converted to Actual Darlings, of which the team continues to pay 0.56 Actual Darlings per year.

Understandable that neither side wants to be saddled with over 3 Darlings in these uncertain times.

 

[Nikishin Go Boom]

I think something around the current arena is the best option. The hospital is right there and it should be able to support any entertainment area during non game days. If the restaurants are more than okay sports bars then plenty of folks would do date nights there. State football and basketball games too. As long as they could field the void between April through August (minus playoff games) then there should be a very steady flow of people.

just fix incoming and outgoing traffic patterns. Incoming pattern: I wonder if a overhead system like those toll road scanners would work? Pre-fill parking on the box and have a seperate line for non box holders.

The Battery around the Braves stadium has doubled the Braves income.

downtown arena doesn’t make sense logistically.

 

[MinJaBen]

I think the easiest (and most likely) thing for them to do is to create a commercial district around the arena with bars and team stores in that space between PNC and Carter Finley. And I would model it after the Power and Light District in Kansas City...

I think something around the current arena is the best option. The hospital is right there and it should be able to support any entertainment area during non game days. If the restaurants are more than okay sports bars then plenty of folks would do date nights there. State football and basketball games too. As long as they could field the void between April through August (minus playoff games) then there should be a very steady flow of people.

The problem with the current location for any redevelopment like you are proposing is that the vast majority of the land is State owned. That makes it very difficult to do anything. For reference, look at what a shit-show it has been to try and do anything with the Dix Hospital land in Raleigh. Multiple interest groups fought (and maybe still are, I haven't kept up with it) each other in the capital and in the courts to see who got to do what with the land. I don't know how anyone can think this is going to be the easy solution.

 

[Svechhammer]

The problem with the current location for any redevelopment like you are proposing is that the vast majority of the land is State owned. That makes it very difficult to do anything. For reference, look at what a shit-show it has been to try and do anything with the Dix Hospital land in Raleigh. Multiple interest groups fought (and maybe still are, I haven't kept up with it) each other in the capital and in the courts to see who got to do what with the land. I don't know how anyone can think this is going to be the easy solution.

That's why I'm proposing that strip of land between the arena and stadium for a complex. The area is already in use as parking lots for the sports complex, so its not really fundamentally changing anything about it. And, assuming there isn't anything under the ground between the two, you could also increase parking underground for staff and employees so you don't have to acquire more land.

And, lets be honest, the other locations that have been pinpointed as possible locations for a downtown arena are also currently owned by the state, so you're going to deal with the same headaches there as well. At that point, its worth exploring how you might be able to build out what you already have.

 

[tarheelhockey]

just fix incoming and outgoing traffic patterns. Incoming pattern: I wonder if a overhead system like those toll road scanners would work? Pre-fill parking on the box and have a seperate line for non box holders.

This is a really good idea. Designate half the parking and street lanes for box holders, so you get them flowing smoothly. Designate the other half for cars that need to manually pay and then be directed by an attendant. By separating the two lines, you reduce volume on the manual-payment side which greatly reduces congestion.

I'd be 100% for this, and I don't even pay for parking usually. If anything, a system like the above might actually change my mind on that.

 

[Nikishin Go Boom]

This is a really good idea. Designate half the parking and street lanes for box holders, so you get them flowing smoothly. Designate the other half for cars that need to manually pay and then be directed by an attendant. By separating the two lines, you reduce volume on the manual-payment side which greatly reduces congestion.

I'd be 100% for this, and I don't even pay for parking usually. If anything, a system like the above might actually change my mind on that.

The justification would be more time in the area of the arena and hopefully spending money and potentially less parking attendants needed.

could work. Although they would be in a jam if the system went down. With state being there, they could help with the cost.

 

[tarheelhockey]

The justification would be more time in the area of the arena and hopefully spending money and potentially less parking attendants needed.

could work. Although they would be in a jam if the system went down. With state being there, they could help with the cost.

I'm sure they would need to crunch the numbers, but intuitively it seems really obvious that a lot more people would park at the arena and spend more time at the arena if it were easier and less time-consuming to park there. More people parking, and then spending a lot more time there, would surely justify the overhead of installing toll meters.

This gets a lot more significant if they develop an entertainment district there. The whole premise of a district is that people would eat and drink there before and after the game, which is currently impractical on most game nights because of traffic.

 

[DaveG]

This isn’t the dramatic announcement it would have been a couple of years ago, which says a lot about how far the franchise has come under Dundon. A stable lease situation is a big, big deal and is basically Relocation Repellant.

Mentioned in the article, it appears likely that they’ll announce a delay in renovations which were supposed to start soon. Under normal circumstances that would be disappointing, but right now it feels like lucky timing. Should give the architects a chance to re-evaluate the needs going forward.

I'm more than good with delaying the renovations. A lot of what they were proposing seemed like it would be an utter disaster for anyone that currently sets up in the 300s, and I'm still not sure there's the corporate support to justify that.

 

[tarheelhockey]

I'm more than good with delaying the renovations. A lot of what they were proposing seemed like it would be an utter disaster for anyone that currently sets up in the 300s, and I'm still not sure there's the corporate support to justify that.

Yep, and I suspect the whole concept of cramming way too many people into tiny spaces will be revisited.

 

[Boom Boom Apathy]

I think the 5-year timeframe is significant. That's right around the amount of time it takes to fund, design, and build a new arena if they decided to go in that direction.

On the other hand, it's kind of hard to see the choice to renovate and develop PNC/Carter-Finley into an entertainment district as anything other than a choice not to proceed with a new arena.

If Dundon's goal is to re-open negotiations with a new building as the focus, this is a strange way to do it.

Isn't it now really a 9 year timeframe though?

I thought they Canes were already in a lease until 2024 and this 5 year extension would push it to 2029? Or did I misunderstand?

 

[tarheelhockey]

Isn't it now really a 9 year timeframe though?

I thought they Canes were already in a lease until 2024 and this 5 year extension would push it to 2029? Or did I misunderstand?

That's correct, it would run through 2029 on the new agreement.

On a 2024 deadline, there really wouldn't be time left to talk about a new building before the next lease comes due (unless it's already an advanced conversation behind closed doors, which I doubt given the renovations). So the renovations would have to suffice until the next lease is up... I think they do those in 10-year increments. Not that PNC is likely to be a total dump in 2034, but it will be showing its age in a big way and that could be destabilizing.

On a 2029 deadline, they can get these short-term renovations done, spend a couple of years raking in the profits, and then decide with a pretty long timeline whether they want to move forward with a new building. If so, that would still give them several years to line up political support/funding, and then go through the construction process (years) with a clean handoff from one building to the next. Nice and tidy, everybody walks away happy.

The only thing is, they're talking about building an entire entertainment district around the current site. I'm really not sure how that jives with the idea of a new building, unless they're planning to completely change the layout of the property and have the next arena built into the new district somehow.

 

[Navin R Slavin]

Why push for a game at Carter Finley if boosting its profile isn't in the long term plan?

They've been talking about an entertainment district forever. This feels like a path to get it done.

Don't bring the arena downtown. Bring some downtown to the arena. Infill is inevitable anyway; stay put and cash in on the long term value.

 

[Svechhammer]

That's correct, it would run through 2029 on the new agreement.

On a 2024 deadline, there really wouldn't be time left to talk about a new building before the next lease comes due (unless it's already an advanced conversation behind closed doors, which I doubt given the renovations). So the renovations would have to suffice until the next lease is up... I think they do those in 10-year increments. Not that PNC is likely to be a total dump in 2034, but it will be showing its age in a big way and that could be destabilizing.

On a 2029 deadline, they can get these short-term renovations done, spend a couple of years raking in the profits, and then decide with a pretty long timeline whether they want to move forward with a new building. If so, that would still give them several years to line up political support/funding, and then go through the construction process (years) with a clean handoff from one building to the next. Nice and tidy, everybody walks away happy.

The only thing is, they're talking about building an entire entertainment district around the current site. I'm really not sure how that jives with the idea of a new building, unless they're planning to completely change the layout of the property and have the next arena built into the new district somehow.

The question is, do they really need a new arena, or can they just renovate the current to bring it up to standard? I actually think the current arena is in really good shape, with only needing to do some things like renovating the concourses, and possibly expanding the structure outward to accommodate that as well as installing an outdoor hangout area above all the entrances for when the weather is nice. We don't need a $500m arena downtown when a $200m renovation at the current site could accomplish the same, while being able to spend some of that leftover money to create that entertainment district we know they want.

And if you ask me, that area is prime for a bit of a boom much like we saw with North Hills 20 years ago. If you spend the money to make it a 'cool' place to go, it'll attract attention and it'll become a legitimate destination. I mean seriously, I still can't believe North Hills is what it is today after knowing what a complete dump it was in 2000. If they could make that work there, don't tell me the area around the arena can't work as well (especially with DriveShack right there as well).

 

[Canes]

I think something around the current arena is the best option. The hospital is right there and it should be able to support any entertainment area during non game days. If the restaurants are more than okay sports bars then plenty of folks would do date nights there. State football and basketball games too. As long as they could field the void between April through August (minus playoff games) then there should be a very steady flow of people.

just fix incoming and outgoing traffic patterns. Incoming pattern: I wonder if a overhead system like those toll road scanners would work? Pre-fill parking on the box and have a seperate line for non box holders.

The Battery around the Braves stadium has doubled the Braves income.

downtown arena doesn’t make sense logistically.

Agreed. The Battery around SunTrust is actually pretty cool and makes the stadium being in the burbs and not downtown much more tolerable. A renovated PNC with a similar set up would work very well, IMO.

 

[AeroFishOne]

Moving the arena to South Raleigh would be a huge mistake. The absolute furthest they should move it from where it is now is to downtown, but the current location is a pretty quick drive for a lot of the wealthier portion of the area (N.Raleigh, Cary, Morrisville, ITB, and not that bad for Chapel Hill and Durham). You move it to S. Raleigh, and you're talking about a drive that used to be 20 minutes for people in Raleigh suddenly upwards of an hour, which could significantly dent STM. I am a STM now, and I know there is no way I could make it work if the team played south of downtown.

Not to mention a relatively easy drive from the Greensboro area and any further south from there. I normally hit 64 and cut up that way. Easier for me than 40.

 

[CandyCanes]

The question is, do they really need a new arena, or can they just renovate the current to bring it up to standard? I actually think the current arena is in really good shape, with only needing to do some things like renovating the concourses, and possibly expanding the structure outward to accommodate that as well as installing an outdoor hangout area above all the entrances for when the weather is nice. We don't need a $500m arena downtown when a $200m renovation at the current site could accomplish the same, while being able to spend some of that leftover money to create that entertainment district we know they want.

And if you ask me, that area is prime for a bit of a boom much like we saw with North Hills 20 years ago. If you spend the money to make it a 'cool' place to go, it'll attract attention and it'll become a legitimate destination. I mean seriously, I still can't believe North Hills is what it is today after knowing what a complete dump it was in 2000. If they could make that work there, don't tell me the area around the arena can't work as well (especially with DriveShack right there as well).

I currently live in downtown Raleigh and would love a downtown stadium.

But I’d also be thrilled if they build an entertainment district next to the current stadium. Build some apartments/condos, some good bars, and some good food and it’s a place I’d totally consider moving. I’ve always wanted to live in a place where I could walk to sporting events.

 

[tarheelhockey]

The question is, do they really need a new arena, or can they just renovate the current to bring it up to standard? I actually think the current arena is in really good shape, with only needing to do some things like renovating the concourses, and possibly expanding the structure outward to accommodate that as well as installing an outdoor hangout area above all the entrances for when the weather is nice. We don't need a $500m arena downtown when a $200m renovation at the current site could accomplish the same, while being able to spend some of that leftover money to create that entertainment district we know they want.

And if you ask me, that area is prime for a bit of a boom much like we saw with North Hills 20 years ago. If you spend the money to make it a 'cool' place to go, it'll attract attention and it'll become a legitimate destination. I mean seriously, I still can't believe North Hills is what it is today after knowing what a complete dump it was in 2000. If they could make that work there, don't tell me the area around the arena can't work as well (especially with DriveShack right there as well).

From a fan/local point of view, I'm totally fine continuing to renovate PNC and develop the area around it.

From an owner's point of view, I can very much see the argument for a new building on the public dime. If he has good reason to believe he can get that out of the CA, I don't blame him for pushing for it.

 

[emptyNedder]

I can very much see the argument for a new building on the public dime. If he has good reason to believe he can get that out of the CA, I don't blame him for pushing for it.

Tarheel, I find that you and agree on many hockey and non-hockey topics. So I might be misreading you. However, based on some other comments, I do think you would blame (we all rightly would) someone claiming multiple government benefits through questionable means. Corporate welfare is still welfare, shouldn't we all equally blame corporations who leave taxpayers footing the bill?

Before some of you argue that an individual taking advantage of welfare is only benefitting himself, remember that most of the benefit is spent at local businesses.

 

[Nikishin Go Boom]

I believe that over the next couple of years the tax deduction of depreciation of pnc has to be close to maxed out. 20-25 years seems to be the sweet spot. Also the time most places ask for new buildings. Could add to depreciation deduction by building on a commercial type space.

while I understand that if someone can use corporate welfare to their benefit, it would be silly not to use it. At the same time, I loathe the idea of using taxes to pay for buildings when the money doesn’t return a lot on investment.

 

[tarheelhockey]

Tarheel, I find that you and agree on many hockey and non-hockey topics. So I might be misreading you. However, based on some other comments, I do think you would blame (we all rightly would) someone claiming multiple government benefits through questionable means. Corporate welfare is still welfare, shouldn't we all equally blame corporations who leave taxpayers footing the bill?

Before some of you argue that an individual taking advantage of welfare is only benefitting himself, remember that most of the benefit is spent at local businesses.

My position would be that if there's $500M* of public money earmarked for public facilities to benefit the public by means of making NC State and the Hurricanes more financially stable, that money is better spent on something like $100M-$200M* of continuous renovation of the arena while also developing an entertainment district on Centennial Authority property. That would be an appropriate use of the CA funds, while also generating business and increasing state income (leases, presumably) and also building out a "soft middle" that has emerged between Raleigh and Cary.

IMO, it would be a less-advisable use of that $500M to build an entirely new downtown arena. A lot of the benefits would be the same, but I don't think the money would be spent as efficiently that way. Pulling development out of one area and into another, and doubling the capital investment to create a venue to compete with rather than enhance PNC, is just robbing Peter to pay Paul.

But, again... a new arena would be more profitable for Dundon. If he really thinks it's a feasible option (based on what he may have heard from CA contacts) then I wouldn't blame him for pursuing it. He wouldn't be doing his job as owner of the franchise if he didn't.

* recognizing that we're talking about doing this over a long timeframe, not in a giant chunk

 

[Navin R Slavin]

My position would be that if there's $500M* of public money earmarked for public facilities to benefit the public by means of making NC State and the Hurricanes more financially stable, that money is better spent on something like $100M-$200M* of continuous renovation of the arena while also developing an entertainment district on Centennial Authority property. That would be an appropriate use of the CA funds, while also generating business and increasing state income (leases, presumably) and also building out a "soft middle" that has emerged between Raleigh and Cary.

IMO, it would be a less-advisable use of that $500M to build an entirely new downtown arena. A lot of the benefits would be the same, but I don't think the money would be spent as efficiently that way. Pulling development out of one area and into another, and doubling the capital investment to create a venue to compete with rather than enhance PNC, is just robbing Peter to pay Paul.

But, again... a new arena would be more profitable for Dundon. If he really thinks it's a feasible option (based on what he may have heard from CA contacts) then I wouldn't blame him for pursuing it. He wouldn't be doing his job as owner of the franchise if he didn't.

* recognizing that we're talking about doing this over a long timeframe, not in a giant chunk

I'm not sure a new arena would be more profitable for Dundon if he's one of the primary investors/beneficiaries in a new entertainment district at the current PNC. We're not talking about a middle-of-nowhere Glendale AZ kind of deal -- we're talking about owning a big chunk of prime real estate right in the middle of the Triangle. The Centennial Authority would certainly be better served to share that pie with Dundon than to risk him taking his ball downtown (or elsewhere entirely).

 

[tarheelhockey]

I'm not sure a new arena would be more profitable for Dundon if he's one of the primary investors/beneficiaries in a new entertainment district at the current PNC. We're not talking about a middle-of-nowhere Glendale AZ kind of deal -- we're talking about owning a big chunk of prime real estate right in the middle of the Triangle. The Centennial Authority would certainly be better served to share that pie with Dundon than to risk him taking his ball downtown (or elsewhere entirely).

Would he be an an investor in a PNC-area district, other than being the arena operator? Maybe I’m not following, or missing something.

As arena operator he would stand to benefit directly from a new building.

 

[Svechhammer]

Would he be an an investor in a PNC-area district, other than being the arena operator? Maybe I’m not following, or missing something.

As arena operator he would stand to benefit directly from a new building.

He'd be stupid not to.be a primary investor of an entertainment district around the current site. A place that close to Wade Avenue, 440, and 40 with a straight shot to the RTP, downtown, Cary, Durham, etc... It's ripe for an explosion in growth and if he gets in early, he could double his investment, easily.

Especially when you see what happened at North Hills, which was seriously a shithole 20 years ago.

 

[tarheelhockey]

He'd be stupid not to.be a primary investor of an entertainment district around the current site. A place that close to Wade Avenue, 440, and 40 with a straight shot to the RTP, downtown, Cary, Durham, etc... It's ripe for an explosion in growth and if he gets in early, he could double his investment, easily.

Especially when you see what happened at North Hills, which was seriously a shithole 20 years ago.

I agree that it’s a good investment, but it seems totally speculative to think Dundon is going to suddenly become a Raleigh real estate tycoon. Are we drawing this from specific info or just imagining scenarios?

 

[Navin R Slavin]

Of course it's totally speculative, for chrissakes. Do you have anything better to do?