Broward got land rights in exchange for $86m Panthers subsidy, doesn’t know what to do with them

Remember back in December when the Broward County commission gave Florida Panthers owner Vincent Viola $86 million in cash plus a new out clause to escape his arena lease earlier, all on the reasoning that this would prevent the Panthers from leaving town? (It still boggles my mind to type that.) At least Broward got something out of the deal, it turns out: development rights to 140 acres around the arena that Viola transferred back to the county. And what do they plan to do with their new windfall?

Now the county has to figure out what to do with the land, a vast asphalt sea of parking lots.

“A putt-putt course?” county commissioner Beam Furr quipped Sunday, as consultants held their first meeting to sort out options.

I haven’t kept up with the value of swampland in Florida, so it’s entirely possible that the property around the arena will be good for something, hopefully before the entire region is underwater. It would have been nice for Broward officials to figure this out before trading $86 million and a lease out clause for it, but hey, magic beans are better than nothing.

Broward gives Panthers owner $86m plus lease out clause so team won’t leave, this really happened

The Broward County Commission voted 5-3 last night to approve giving $86 million in subsidies to the owners of the Florida Panthers, on top of the $254 million that it already spent on giving the team a new arena in 1998. Why, exactly, did they do this?

A majority of commissioners said they were swayed by an analysis that showed the team was bleeding millions, and that if it were to declare bankruptcy or leave, the county could be on the hook for even more than $86 million.

That would presumably be this report, which indeed looks at the likely economic impact if the Panthers were to leave, which if you can fight your way past all the gratuitous initial caps comes down to:

  1. The county would lose about $3.6 million a year in tax revenue if the Panthers were to leave.
  2. The county would be on the hook for an extra $6.9 million a year in arena payments if the Panthers stopped contributing.

Now, the lost tax revenue requires a lot of assumptions about whether the arena could fill hockey dates with other events like concerts, not to mention what counts as “lost” revenue. (The report seems to assume that all spending by people who don’t live in Broward County would leave the county if people weren’t going to Panthers games, which is patently untrue — some people would drive in for other reasons, some people are on vacation there anyway, etc.)

But the bigger elephant in the room is in regard to that lost Panthers contribution to arena costs, given that the Panthers already have a lease that requires them to pay that money through 2028. And the new deal would allow the Panthers to leave as early as 2024 if team owners can show $100 million in losses over a seven-year period (which shouldn’t be hard, given sports bookkeeping) — though at least then the team would have to pay a termination fee, starting at $72 million and decreasing each year.

Still, it’s hard to escape the conclusion that Broward County just paid Panthers owner Vincent Viola $86 million in order to change his lease to let him out of it earlier than he otherwise would have, on the grounds that they don’t want the team to leave. Just because something is a cliche doesn’t mean it isn’t true.

Broward County to vote tomorrow on giving Panthers $86m just for the hell of it

The Broward County Commission is set to vote tomorrow on the Florida Panthers‘ request for $86 million in tax subsidies, which according to the South Florida Sun-Sentinel could determine the “hockey team’s future in South Florida.”

What’s that? Don’t the Panthers have a lease that requires they stay in the arena that Broward County built for them in 1998? Sure they do, and it runs through 2028, but local officials have other worries:

The team has not threatened to leave South Florida, and is still obligated to fulfill its contract with the county, as-is. But County Attorney Joni Armstrong Coffey said at the October workshop that if the team were to declare bankruptcy, the county “wouldn’t necessarily be able to enforce” the contract.

Well, sure. Also if the entire Panthers team were swallowed up by a micro black hole. It’s hard to picture Panthers owner Vincent Viola really declaring bankruptcy, though, especially since he likely makes more money on operating the arena than he loses on the hockey team.

More to the point, the county won’t be able to better enforce the contract even if it gives Viola his $86 million — in fact, the new deal would give Viola an out clause after 2023. Which isn’t to say he’d use it, but does anyone think that he wouldn’t be back in another eight years to look for more subsidies? I mean, Viola may have spent $250 million on a money-losing hockey franchise just two years ago, but he’s not an idiot.

Florida Panthers owner, rebuffed on $70m subsidy demand, asks county for $86m instead

Florida Panthers owner Vincent Viola, complaining that the team he bought in 2013 is losing money, has issued a demand for tens of millions of dollars in tax subsidies from Broward County to make his team profitable:

Hemorrhaging tens of millions of dollars each year, the Florida Panthers have made a new request for public assistance at the BB&T Center hockey arena.

The complex package of aid they’re seeking amounts to $86 million in tourist taxes, which are paid by hotel visitors, and will be publicly debated by county commissioners for the first time Tuesday.

Hang on, why is this familiar? Wasn’t there something about this, oh, almost two years ago:

The Florida Panthers professional hockey team says it’s losing more than $20 million a year and needs more public funds to survive.

The struggling team is asking for a rewrite of its contract with Broward county. Under the team’s proposal, the county would use additional tourism taxes to pick up $70 million in BB&T Center costs currently being paid by the Panthers.

Yep, that was it. The main differences between then and now are that Viola’s demands have gone up by about 20%, and that now there’s a long laundry list of favor-shuffling to go along with the tax subsidy plan:

  • Instead of using the county cash to defray the team’s rent costs (which go to help repay the county’s construction costs on the Panthers’ arena, which was otherwise entirely publicly funded), Viola would use the money to defray his operating and maintenance costs for such things as paying the electric bill. Different line item, in other words, same team budget.
  • Viola would stop paying half a million dollars a year in tourism marketing, and instead would give the county a free ad board and luxury suite, which would probably be more valuable if anybody ever went to the arena for hockey games.
  • The county would get development rights on 88 acres of parking lots that the team currently controls.
  • Share money with the county from any NHL expansion fees (“after the Panthers’ losses are covered”) and from any profits on eventual sale of the team.
  • Share operating profits with the county, though if Viola’s previous plan is any guide, the team would be redefining “profits” to be sure there aren’t any to share.

That’s all potentially slightly better for the public than Viola’s last proposal — mostly if the development rights are worth anything, though cue “swampland in Florida” jokes here. But it would still be $86 million in public money being handed to the local sports team owner just to keep him from losing money on the team he just decided to buy two years ago — and which is probably breaking even once the money-losing hockey team is balanced with the money-making arena, and which in any case is locked into a lease through 2028. Which Viola would now be able to break starting in 2023 under the new deal, if he were still showing losses (or “losses”).

Okay, so still pretty bad. Certainly no reason for the county, which rejected Viola’s last demand, to reconsider when it’s basically the same—

But county officials view the new request more favorably, saying it directs public money into the county-owned arena itself, not to the hockey team.

The team’s costs for running the county-owned arena, that is, which the team gets all the revenue from, except any profits it can’t hide them on its books. The South Florida Sun-Sentinel doesn’t actually name any of these favorably-viewing county officials, so if you just want to shout “Man, are you guys dumb!” in the general direction of south Florida, that should suffice.

Panthers could leave Florida without arena subsidies, says Broward ex-mayor pushing arena subsidies

And today in wild speculation about the future of the Florida Panthers, outgoing Broward County mayor Barbara Sharief says that Panthers co-owner Vincent Viola wants $78 million in operating subsidies over the next 14 years, or else he might take the team elsewhere. And that would be bad because AEG’s contract to bring concerts to the BB&T Center is with the Panthers, not the county, and without that “it would be very difficult for us to book shows and to fill up the arena. So essentially … we would have a concrete dinosaur just sitting there.” (Presumably there would be no way for the county to cut its own deal with AEG, because if the Panthers left there would be too many old memories for them to want to book concerts into Broward without breaking down in tears.)

You may remember Sharief as the mayor who earlier this year hired a consultant to see whether it would be cost-effective to meet Viola’s subsidy demands in order to keep the Panthers in town, notwithstanding that the Panthers’ lease runs through 2028 and Viola isn’t actually offering to extend the lease any if he gets his $78 million. County mayors rotate each year, so Sharief will return to being a regular county commissioner in 2015, but she took one last shot at some publicity with this Panthers announcement, which included “a preliminary study that shows the BB&T Center is worth $450 million, but would be valued at just $60 million without the Panthers.” Study not actually included on Sharief’s website, but she does give her phone number and suggest that readers call with any questions, so feel free.

Sporting News went to a Florida Panthers game, and the Miami Marlins’ attendance broke out

The Sporting News has been publishing since 1886, but never let it be said they haven’t learned how to update their headlines to the way the kids today like them:

Oh boy, the Panthers’ arena is empty again (PHOTOS)

And here’s one of the promised PHOTOS:

It got a bit better once the game actually started, but still, it’s never a good thing to have the Sporting News writing: “Part of the reason for all this: the team ended its long-running practice of ‘giving away tickets for free just so the building will have people in it’ for this season.”

Panthers owner Vincent Viola still wants $80 million from Broward County to make it worth his while to keep the team in town — despite a lease that runs through 2028 and the fact that he still makes money on the arena operations despite nobody going to hockey games — but at this point you have to wonder what he’d do with it to get people interested, unless he just stands at the doors handing out twenties to anyone who agrees to watch this strange “hockey” thing.

Florida Panthers reassure fans they’re not moving … yet

From the Florida Panthers veiled threat department:

As we close in on the one-year anniversary of our ownership of the Florida Panthers, we want to reiterate our commitment to Broward County, South Florida and our Panthers fans and business partners. As we said at the press conference when we bought the team, we view ourselves as stewards of the team for the community and our plan is to build an organization that makes South Florida proud and to win the Stanley Cup in South Florida. Despite media speculation to the contrary, we have no plans or intentions to move this franchise…
It is no secret that the Panthers and BB&T Center have lost tremendous amounts of money over the last dozen years. We are working hard to address this situation, which we believe we can do with the support from our loyal fans, our business partners, the business community and our community-at-large.

In other words, “Only you can help us meet our goal of sticking around.” The only thing missing is the offer of a tote bag.

[Also, the Panthers aren’t actually losing money. But shh, don’t tell anyone, gotta keep those phones ringing!]

Broward mayor seeks analysis of costs of letting Panthers leave, ignoring 14 years left on lease

Well, now, this is interesting, kind of:

You might not be able to tell from her @bestmom39 handle, but Barbara Sharief is mayor of Broward County, and she here seems to be indicating that she’s asking an economic consultant to do a cost/benefit analysis of letting the Florida Panthers move out of the county rather than giving them $80 million. How much the Panthers’ presence is worth to Broward is a reasonable analysis to ask for — though given that the Panthers’ lease isn’t up until 2028, and Panthers owner Vincent Viola isn’t actually promising to stay any longer that I can tell in exchange for the $80 million, it’s worth wondering if maybe Sharief is asking the wrong question.

Panthers print out $80m subsidy demand on nicer paper, resubmit it to Broward County

The owners of the Florida Panthers responded to criticism of their demand for $80 million in public subsidies in exchange for pretty much damn near nothing by issuing a revised subsidy proposal at the end of last week, which looks like:

The new request looks largely the same.

Thanks, South Florida Sun Sentinel, for saving us having to read the rest of the article. There would be a small change in how the profit threshold would be calculated before the Panthers would have to share profits with Broward County, it looks like, but given that it’s pretty much inconceivable that the Panthers would ever hit that threshold anyway, this isn’t likely to be that significant a change.

New Panthers CEO Rory Babich, meanwhile, had this to add:

“We resubmitted our proposal to eliminate or modify certain previous requests to enable the discussions to focus more specifically on the economic terms of the arrangements,” he said in an email. ” …  We look forward to continuing to engage in an active and constructive dialogue with the county staff regarding the terms of our agreements with the County. We remain confident that a sensible, long-term solution can be found to help sustain the long-term viability of the Broward County-owned BB&T Center.”

Man, I can see how Babich got that job. I knew I should have gone for an advanced degree in gobbledygook.

Panthers now seeking $80m in arena subsidies, promise magic beans in exchange

Didja miss me? I spent most of yesterday dealing with a technology crisis (laptop hard drive go boom), and am still digging out, so will probably take a few days to fully catch up with all the news. Let’s get out the news shovel, though, and see how far we can get. For starters:

The Florida Panthers‘ owners demand for $61 million in rent breaks plus 22 acres of free land for development in exchange for nothing turns out not to be quite for nothing: Broward County would get a cut of any team windfall profits, as spelled out in the team’s current lease. Except the team seems dead set on ensuring that it would never actually have to share any profits at all, reports the South Florida Sun Sentinel:

•If the arena profits exceed $12 million, the county would reap 20 percent of any profits. That’s not changing. But the calculation of “profit” would change, to help the Panthers keep more of the revenues. The team would continue to count as an expense $4.5 million in arena bond payments even though the county would be paying them. The Panthers also would move to the expense ledger a $250,000 annual arena management fee paid to the Panthers by the county.

•The Panthers would remove from the profit books the money made from seats in exclusive sections: Club Red and ADT. That move alone would allow the Panthers to keep $6 million or more in revenues without counting them toward the profit-sharing threshold, according to the auditor’s analysis.

•The Panthers’ contributions toward arena reserves, set aside for repairs and renovations, would be cut, saving the Panthers at least $650,000 a year, or $9.7 million in all.

Plus, the county’s ability to audit the Panthers’ books would be reduced, the county would cover all arena property insurance payments over $1 million (“an estimated $600,000 a year, or $9 million over the life of the contract”), the team would shift $500,000 in annual maintenance expenses to the county, and any payment to the county for the 22 acres of land is “to be negotiated.”

Add in all those additional breaks, and it looks like the Panthers owners are now demanding about $80 million worth of subsidies from Broward, in exchange for which they’d kick back 20% of any profits over $18 million a year, if somehow the Panthers start selling tickets like crazy and their accountants forget how to juggle the books to make it look like they’re only earning $17.9 million. County commissioners reportedly aren’t happy about this, so expect them to haggle the team down to a slightly smaller amount of cash in exchange for profit sharing that would kick in at a slightly lower impossible threshold.