As the New Orleans Pelicans look to Pensacola as the likely lone contender to host their NBA G League development team, a consortium of developers have presented county officials with an unsolicited proposal to build a new arena, fieldhouse, and hotel development in downtown Pensacola.
The Pelicans in March invited 11 communities to submit proposals to host their new minor league basketball team. Only Pensacola and Shreveport, La. seriously pursed the team, and after Shreveport’s city council voted down an arena plan last month, Pensacola is viewed as the favorite, though team officials aren’t expected to announce their decision until later this year.
The Pelicans haven’t asked Pensacola officials for taxpayer dollars or for a new arena. Nonetheless, a group seeking to build an arena-anchored development in downtown Pensacola submitted tentative plans on Monday to Escambia County commissioners. The proposal details a major public-private partnership that would lead to the construction of a new multi-phase development, including an arena, field house/event center, and hotel on one of two downtown sites.
Spearheaded by Pensacola hotelier Jay Patel and a coalition of local and out-of-state corporations and developers, the proposed new arena development could end up being one of the largest projects in county history. The project’s price tag could top $100 million, with developers seeking to fund it through a mix of public and private sources.
The development group — operating under the name Pensacola Arena Development Partners (PADP) — is led by the Texas-based Hunt Development Group and includes at least seven other partner companies, including Arizona-based International Collisium Company, Iowa-based VenuWorks, Arizona-based CORE Construction, Arizona-based Orcutt/Winslow architects, Arizona-based TRC Worldwide, Denver-based Sink Combs Dethlefs, and Pensacola-based Structured Parking Solutions.
In its entirety, the plan specifically calls for a 100,000 square-foot field house that would cater to sports tourism events, a 6,500 fixed-seat multi-use sunken bowl arena that would include club seating and private suites, a community ice rink, a 120-150 room hotel, 800-space parking garage, mixed-use development of restaurants and retail, a pedestrian plaza, and a Pensacola Sports Hall of Fame museum that would feature events hosting athletes, coaches, and sports officials.
PADP has proposed two potential sites for the project, both in downtown Pensacola. One preferred option conceptualizes using the former 19-acre ECUA Main Street wastewater plant property, now owned by developer Quint Studer, who previously said he is land-banking the property for future development. The other option would include razing the 10,000-seat, 32-year-old Pensacola Bay Center and redeveloping the 12-acre site at the northeastern gateway to downtown. While the Bay Center can accomodate 10,000 at its maximum capacity for events, it’s limited to about 8,000 seats for hockey games.
Both proposed sites would include building essentially the same facilities, according to the proposal. Additionally, PADP stated that the facilities would meet the currently anticipated needs for practice and play facilities for both an NBA G League team, such as the Pelicans and the Southern Professional Hockey League team, such as the Ice Flyers.
In the event that current conversations with the Pelicans franchise advance to signing, PADP said the arena will be primarily positioned as a G League basketball arena but will be designed and constructed to accommodate other sports, such as ice hockey, as well as well as convention center uses.
There is also an anticipated need for office space for the resident teams, Pensacola Sports, Visit Pensacola, county offices, or other related events functions. Future anticipated needs might include conversion to a convention center able to accommodate modest-sized events.
In its proposal, PADP stated its partners “will be responsible for the development, design, construction, financing, operations, and maintenance of the Project.” That would include managing the day-to-day operations of the facilities under development partner VenuWorks. Pennsylvania-based SMG currently manages the Bay Center.
PADP has proposed paying the entirety of the project upfront — estimated at $70-$100 million — with the county dedicating the $1.3 million in bed taxes currently used to subsidize the Bay Center’s operations toward debt payments on the project over a 30-year lease. At the end of the lease, the county would own the facilities outright.
The developers will also seek up at least $25 million through Triumph Gulf Coast, the entity controlling $1.5 billion in funds to be distributed to local communities as a result of the 2010 Deepwater Horizon oil spill, as well as up to $20 million in federally controlled New Market Tax Credits. PADP could also seek Local Option Sales Tax funding, along with a property tax abatement from the city and/or county, such as an Economic Development Ad Valorem Tax Exemption, or EDATE.
Under the terms of the proposed 30-year lease, the county would make annual lease payments to PADP that would go toward paying off the total cost of the project. According to conceptual financial details released by PADP, those anticipated lease payments could range from $3-5 million annually during the first five years the facility is open, then between $2.3 million and $4.3 million annually through the remainder of the 30-year lease, based on a $65-70 million construction cost for the arena and field house.
Additionally, the county would be responsible for any operational shortfalls on the facilities. Currently, the county subsidizes the Bay Center’s operations to the tune of about $1.3 million annually. That subsidy is funded by tourist development taxes — commonly called bed taxes — which are paid by visitors to area hotels and businesses. The county also allocates about $200,000 annually from Local Option Sales Tax dollars to fund repairs and improvements to the Bay Center. According to PADP, the anticipated operating loss on the new arena and field house would be offset by a lease payment from a hotel and future mixed-use development on the site. Any surplus funds received through this future development would be shared between the county and PADP.
If eventually approved within the next several months, PADP has proposed a conceptual construction completion date of October 2019 to coincide with the expected arrival of the new G League team in Pensacola, if selected. The Pelicans are expected to announce their decision later this year. It’s unclear if the PADP project would still move forward if Pensacola is not awarded the basketball team.
County commissioners are expected to discuss the proposal at their next regular meeting on Thursday. To move forward, the proposal would have to meet several requirements as governed under Florida law, including issuing a public notice to allow for other proposals for the project, allowing a review of the project by an independent architect and engineer, and performing an independent analysis of the project’s financial feasibility and public benefit.
If the conceptual proposal progresses under the direction of county commissioners, a public consultation process would begin, along with input and approval from the Pensacola City Council and county commissioners.