The Civic Center Board of Trustee’s met Wednesday morning for nearly 90 minutes in executive session, before agreeing on the terms of a new lease proposal that will be presented to the Pirates.
“Nothing is final until the trustee’s approve (a lease) and the Pirates approve it,” said Chairman of Civic Center Board of the Trustees Neal Pratt. “We are at the point where the board has approved a one-year extension and now we’ll forward that to the Pirates in a written proposal and await their response.”
The terms of the lease extension remain intact from the previous lease that recently expired on April 30.
The Pirates will continue to pay $2,500 per game and receive a rebate based on reaching certain attendance benchmarks.
The Pirates received a rebate earlier this month from the Civic Center in the amount of $76,000 after achieving the required attendance levels for the 2011-’12 season.
“When we negotiated the (previous) lease agreements, the goal of the trustees was to break even,” said Pratt. “We’re not trying to make money off the Pirates. We think having events here, like hockey, is good for the community, but our stated objective is to break even on the Pirates. That’s why we structured the deal the way we did. When we raised the rent the last time we did it because we didn’t want to subsidize the profits of the hockey team.”
Pirates Managing Owner/CEO Brian Petrovek has indicated for some time that he wasn’t interested in signing a short-term lease with the Civic Center; instead he was looking for a lease that was 10 to 15-years in length.
Petrovek said in a telephone interview on Wednesday that he would only agree to the extension provided it contained language that that expedited negotiations on a long-term lease by October 1st.
“The lease is an extension of the current terms; however, it’s built on a mechanism where over the next couple of months with the help of consultants the trustees will hire that we begin an aggressive process of crafting a long-term lease no later than October 1st.
“That was the only way that I was going to agree to do a one-year extension was with that caveat. We’ll have a contractual obligation to get that done… It puts our feet to the fire to get something done by the first of October for the long-term.”
The reason for the extension is due to lack of detailed information as a result of the 33 million dollars renovation of the Civic Center that was approved by voters last November.
Trustees are still trying to compile how much total revenue will be generated from items such as naming rights, premium seating which including the proposed sky walk – seating above the bowl overlooking the ice – and ribbon board.
As a result, the trustees are not comfortable on finalizing a long-term lease until they have that information.
“The apprehension is because we don’t have enough information right now because the idea a longer term lease is based on the fact that we have a newly renovated facility,” said Pratt. “Until we know what that will contain. What kind of premium seating and how many premium seats. Are they going to be skyboxes? Are they going be the skywalk style seating that’s being proposed? “If so, how much revenue can we expect to be generated from those items?”
“Until we know what we are going to have or what revenue is generated we can’t discuss how to split that revenue.”
The trustees have decided to elicit outside guidance in determining cost of construction vs. potential revenue generation with the hope of having a firm in place within the next few weeks.
“This is to help us gain some expertise on whether we will get a good return on the investment to build the skywalk seating and ribbon panel,” said Pratt. “We want to have the best information possible to make those big decisions because we are dealing with taxpayer dollars and we have to be wise on how we spend that money.”
The project, which is in the first phase of pricing the total renovation, is currently budgeted at 35 million.
According to Pratt, it’s not unexpected for this stage of the process to be above the budgeted amount as they further refine cost construction over the next few weeks with Cianbro Corp., the construction firm who is managing the renovation construction of the arena for the county.
Pratt also reiterated that the project, which be divided into three phases, is still on schedule for begin sometime in June.
American Idol is schedule for a concert at the Civic Center for August 25. Pratt said that decision was made after consulting with the architect and Cianbro, who indicated that the concert wouldn’t interfere with the timeline of the renovation plan.
“Those types of decision are being made as we move along in the process,” he said. “We just don’t want to say no randomly based on a deadline that just arbitrary. If a promoter came to us and wanted to put on an event, we’ll approach Cianbro and the architect and based the schedule as it exists at that moment, we’ll decide if we can hold an event or not.”
The building is expected to close after the Pirates complete the 2012-’13 season with the goal of reopening in time for the start of the Pirates season in Oct. 2013.