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PNC Arena Renovations

Yep, it’s time. It’s a 20 year old arena, there are 11 teams with newer buildings and MSG just had a multi-year, $1 billion+ renovation. A lot of it is contingent on the Canes signing a new lease, and not all of it will be done. But I like the idea of restaurant space and opening up the south entrance to provide a view, even though that will be lessened somewhat by the box office.
 
I know it's already in the works, but I'm looking forward to a larger, better jumbotron. It's hard for me to read much of the information displayed on the current one.
 
The unfortunate thing is a lot of these renovation will be pending the Canes extending their lease past 2024. Its still hard to get a read on whether or not Dundon was just doing some 'early negotiations posturing' when he was talking about downtown arenas, the arena availability with NC State, needing to get a 'better agreement' or what his real thought process is about the Canes, their viability in the market, etc.

Right now Dundon and the Canes have a lease through 2024 and no reason to think that anyone is going to be build a arena downtown. The Canes are a team that seems to be turning the corner but are still not drawing well enough (Cherry is sort of correct there, its getting better but we are still 4600 under capacity). Maybe that all gets better if the Canes make the playoffs and that becomes a sustainable thing. I just sense there is going to be a lot of posturing on the Canes part...which hopefully is nothing more than Dundon trying to get the best deal he can and nothing more ominous. Meanwhile all of these great renovations will be in limbo, save for hopefully the scoreboard.
 
And let's be clear on one thing ... the other primary tenant wants that scoreboard upgrade but isn't really bothered about much of the rest of this stuff. This is on the Canes and their lease situation. If they're willing to play ball then so are the Authority, that much is plain.
 
BTW, I'm going to the ACCs this week and should have a chance to talk to a few of the Wolfpack Club bigwigs. I'll see if I can get a read on their general take on the lease renewal.
 
jeffbear said:
BTW, I'm going to the ACCs this week and should have a chance to talk to a few of the Wolfpack Club bigwigs. I'll see if I can get a read on their general take on the lease renewal.
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Welp, see you back home by Wednesday evening. /sigh go pack go /sigh
 
NoMich said:
Welp, see you back home by Wednesday evening. /sigh go pack go /sigh
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I'll stick around through Tuesday either way ... from there, we'll see. I often get my best info from the bigwigs at breakfast following losses :0)
 
jeffbear said:
I'll stick around through Tuesday either way ... from there, we'll see. I often get my best info from the bigwigs at breakfast following losses :0)
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Got your breath back and ass un-puckered yet?

And

Go Pack!!!
 
LJG said:
Got your breath back and ass un-puckered yet?

And

Go Pack!!!
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Not really, no. I'm getting too old for this crap.

Update on arena issues ... as I suspected, State's position is that the proposed arena renovations and additions sound nice, but are NOT something that the second primary tenant really cares about. The University IS willing to be more flexible with date blockouts, as the new ACC Network gives them more flexibility that their previous situation. Remember, the ACC was balancing basically three network agreements in setting their schedules and now they will have only one primary partner and whatever one-offs get negotiated with non-ESPN(ABC) carriers. The University wants to maintain their dedicated dates for University ceremonies and graduations, which sounds reasonable. State also maintains that they are satisfied with their own financial structure and will only be willing to negotiate around the margins of their cut of parking, concessions and other game day revenues.

Bottom line ... State is satisfied with the way the first two decades have gone for them at the arena and see no need to re-invent the wheel. Doesn't sound like they're going to play hardball if Dundon needs them to give an inch here or there, but they're not going to be willing to give a mile. Nothing unusual there. Oh ... and incoming AD Boo Corrigan is a heck of a charismatic guy. I think he'll be very popular, very quickly.
 
One more note on the arena lease negotiations ... I talked with a Centennial Authority member this morning, and he told me that they haven't really "gotten into it" with Dundon yet, referring to lease negotiations. Dundon made that initial public salvo about changing the game in terms of revenues, but did so without any real follow up with the Authority ... who were already engaged in the effort to request funds from the County entertainment and sports tax fund for the batch of renovations discussed in the past week or so. That laundry list was clearly established with input from the hockey club seeing as how the vast majority of the items benefit them specifically and don't really bring significant value to NC State as a tenant. He mentioned something that I hadn't really thought of before about NC State's revenues ... by far and away the biggest source of latent revenue for State would be the new proposed legislation that would allow alcohol sales at the arena during their games. That's completely untapped cash and would give both parties another poker chip to play with ... which is good. As I mentioned before, State is comfortable with the current situation and while they're willing to compromise they would just as soon things carry on at the PNC roughly as they have done for the first 20 years. Having a fresh revenue stream to make them whole on anything they might "give away" in negotiations for this extension gives everybody a bit of wiggle room.

My read between the lines take is that the Authority seems to be wary of what's coming in lease negotiations with the Canes, but they really want a commitment from the County on those tax revenues to be on solid footing before they get into nuts and bolts with Dundon. I get the sense that they think Dundon is going to try and crowbar as much advantage as he can out of the new lease, but nobody really thinks he's going to be able to find a better deal elsewhere ... which kinds of takes away his biggest leverage play. Time will tell, but it's clearly a new ballgame for the Arena Authority and their primary tenant.
 
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How do the concessions work? Is it all income to Gale Force or do the Canes/Pack get to keep some or all of it?


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andyt said:
How do the concessions work? Is it all income to Gale Force or do the Canes/Pack get to keep some or all of it?


Sent from my iPhone using Tapatalk
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IIRC, for hockey the club pays a simple facility rental fee for games and keep all revenues aside from that. Their rental fee is calculated to cover a split of all revenues between the club and the management ... who also own the club. It's easier to be simple when you basically have one division of a company paying another division of the same company. All league-sourced revenue goes 100% to the hockey club.

It's more complicated for State games. They pay a facility usage fee and then there's a sliding scale for how parking, concessions and everything else is split. State keeps close to 100% of the Wolfpack Club priority parking, but only gets like 10% of the public parking revenue. Concessions are also weirdly split with State getting a higher percentage of catering sales in the boxes, suites and restaurant/buffets and less of a cut from the general concession carts and stands. There's also some sort of predetermined split of TV rights payments. GFH gets a cut for providing and maintaining the infrastructure. All of that was painstakingly negotiated for the original lease agreement, which was later modified when the ACC required some changes to the structure of the agreement. IIRC they tweaked some of the concession splits at that time as well.

And on top of all that, the Arena Authority gets a cut of all arena revenues that is set aside for their operations (staff, meeting expenses, etc) as well as facility maintenance and upgrades. Generally that has paid for the building graphics, changes to the parking lot that have been made to improve traffic flow, recent upgrades and modifications to the toilets, the (soon to be two) new scoreboards, the lighting and sound system upgrades, the LED video bands and other misc stuff. The Authority also has the right to apply for tax revenues from the hotel and restaurant tax that was put in place in 1997 to pay for Wake County's portion of the costs of the initial arena construction. That is earmarked to go towards public sporting, entertainment and parks usage and it has paid for countless County and municipal parks projects in addition to some specific improvements to various sporting facilities and that summer league baseball complex down in Holly Springs.
 
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