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October 02, 2006
Magic offer $50M, valuable gift certificates toward arena
The Orlando Magic did indeed announce on Friday that they'd struck a deal with local officials for a new downtown arena. As for how much Magic owner (and Amway founder) Rich DeVos would be kicking in towards the $480 million project, well, that's complicated. Under the terms of the deal, the Magic would:
- Put up $50 million in cash. That's straightforward enough.
- Pay $12 million in future rent as an up-front payment, plus $42.5 million in future arena revenues. (It's unclear if these figures are present value or not.) That money, however, would not go towards construction costs, but would rather be used to pay the arena's operating expenses - something that many NBA teams pay out of their own pockets. And that's even aside from the question of whether those revenues should be considered the team's to begin with.
- Guarantee a $100 million loan to the city, something that's previously been reported to be worth between $10 million and $30 million to the public.
The actual Magic contribution toward the $480 million price tag, then, is probably somewhere around $70 million - though the Orlando Business Journal, apparently unable to tell the difference between a loan and a grant, came up with $204 million as the figure.
Local arena boosters, though, were just happy to see a deal struck, regardless of who was paying. Orlando Sentinel sports columnist Mike Bianchi was so excited that he hailed this "magical sign of the times" as having been possible "because everybody came together - [Orange County Mayor Rich] Crotty and [Orlando Mayor Buddy] Dyer, city and county, Disney and Universal - and realized it was time finally to get rid of the disco ball and join the 21st century." Actually, at a mere 17 years old, Orlando's current arena is about 90 years younger than the disco ball - but who's counting?