The North Carolina-run Centennial Authority yesterday met in a room decorated with Carolina Hurricanes jerseys to approve $300 million in spending on renovations to the Hurricanes’ 24-year-old arena. In exchange, team owner Tom Dundon will extend his lease until 2044, and promise to spend $800 million over the next 20 years to build a private mixed-use development around the arena, which will include some affordable housing.
But wait, someone out there is probably saying, didn’t North Carolina already approve $81 million in spending four years ago in exchange for a lease extension through 2029? Yes, but this deal supersedes that one, tacking on an extra 15 years of lease while eliminating clauses that would have let Dundon buy his way out of the lease, replacing them with one where the team can only relocate starting in 2039 if the owner and the state fail to “confer in good faith” on the “future of PNC Arena or a replacement arena.” The mixed-use development is also new, as is a provision for the Hurricanes to pay $4.5 million in rent starting in 2029. (The team currently pays no rent, and gets almost $2 million in operating subsidies.)
Because of all the weird moving parts, it’s almost impossible to figure out just how big a public subsidy this is without having answers to more questions: Is $4.5 million a year a reasonable fair-market rent for the 80 acres of state land that Dundon plans to build his mixed-use development on? What happens if the state spends its $300 million on arena upgrades and then Dundon dawdles on spending his $800 million or providing the affordable housing? (In Brooklyn, the answer was nothing much.) And is this really a lease extension until 2044, or just until 2039 when the state will need to “confer” on an agreement to spend even more money down the road on more upgrades or a new arena?
Some of this could be answered by getting a look at the actual lease agreement, but the local papers didn’t bother to include any links, and the Centennial Authority has a “public announcement” page that is entirely blank. I would check Twitter, but Elon Musk just shut down the free version of TweetDeck, making the site even more impossible to use — if anyone out there knows where I might find the actual documents, throw a brick through my window or something. And to the many people who regularly ask me where they can find a listing of how much public money is being spent on stadium and arena deals: I hope you see now why you shouldn’t hold your breath.
Because, as we all know, Tom Dundon never ever renegs on a deal.
IIRC, NC State also plays basketball in that arena. Are they just renting or are they part of the deal?
Not sure if that matters, but it might somehow.
Not that it justifies any of this, but I’ve always thought that Carolina is one of the least “secure” NHL markets. There are more than 2m in that area, but it’s not a traditional hockey hotbed and there is an even bigger market just down the road in Charlotte.
I’ve also found this to be bizarre. Raleigh is the 41th largest metro area. The minor league team in Charlotte (which is even more bizarrely not an affiliate of the Canes) has the 23rd largest market.
My Blue Jackets are in the 32nd largest market. We have an AHL team in Cleveland (34th) and two ECHL teams in the state in Toledo (94th) and Cincinnati (30th).
Cincinnati is kind of hilarious in that it only has a 3rd division club, so I guess it’s not that crazy.
At the time the arena was built and the Whalers moved to Raleigh, Charlotte did not yet have the arena that it does now. That was built for the Bobcats a few years later.
If history had gone a little differently, maybe the NHL would be in Charlotte instead of the Triangle Area.
Raleigh-Durham is smaller than Charlotte, but the advantage of being in Raleigh versus Charlotte was/is that they don’t have to compete with any other major league teams there. They do have to compete with college sports, of course.
Likewise, Columbus made more sense for the NHL than Cleveland or Cincinnati, because there was, potentially, less competition. It’s also growing faster. Still, I always thought the Blue Jackets might do better if they called themselves the Ohio Blue Jackets and tried to get more fans from across the state.
Cincinnati had a WHA team and has had a few minor league teams over the years. It once had two minor league teams at the same time, an ECHL one and and AHL one.
But it’s not so surprising that it’s settled for an ECHL team instead of an AHL team. The same happened in Norfolk (Hampton Roads is actually a fairly large market). Because it costs more to run an AHL team than an ECHL team, but for most fans, the difference in quality isn’t worth paying more, especially if the arena is 50 years old and nothing to write home about.
I know that some in Cincinnati think the city should help build a new arena to replace the Coliseum (or whatever it’s called now). It’s been there since Riverfront Stadium was built.
There was a push to build an arena to get a GOP convention, but Cincinnati does not really have enough hotels in the area anyway, and one week’s worth of visitors is not worth building a new arena.
It does get concerts and I know that NCAA hockey tournament still does regionals there. Maybe some other events like that. If it were replaced, they could get NCAA basketball regionals, but those don’t really justify a big public expenditure either.
It’s not worth it for Cincinnati to spend a lot to fix up the Coliseum just to get an AHL team rather than an ECHL team. It’s not clear what AHL team they could get anyway. NHL teams like to keep their AHL team close. Columbus already has Cleveland and they draw well.
There really any other prospective tenants. UC and Xavier are happy with their on-campus basketball facilities. Now that the NHL is in Columbus, there’s no chance that the NHL will come to Cincinnati and the NBA is more interested in Seattle and Las Vegas than adding more teams in the midwest.
The other thing was that Columbus got the NHL team because of the Whalers. Or, not.
Apparently, the story was that Karmanos, who owned Hartford, was willing to move the team to Auburn Hills (where the IHL Vipers were playing) to spite the Illiches and the Red Wings. And then tried to play out of an airplane hangar in Columbus.
So, despite Cincy or Cleveland being more optimal locations for an NHL team (Cleveland moreso), they went with Columbus for that reason.
I don’t think I follow that logic.
He shopped the Whalers to Norfolk (!), Nashville, Suburban Michigan and Columbus but I’ve never seen anything to suggest that those inquiries *caused* Columbus or Nashville to later get expansion teams.
It wasn’t like a Giants-to-Tampa situation. Those markets got teams because they had owners and an arena and, presumably, power point decks about their demographics.
I’m partial to Cincinnati, but I’m not sure Cincinnati or Cleveland are actually more optimal for an NHL team. Columbus, Cincinnati and Cleveland are similar sizes but, IIRC, Columbus is growing the fastest and didn’t have any an NFL, NBA, or MLB team to compete with for attention and sponsors.
It also figured out a way to get the arena built – even after a failed referendum. That’s the most critical step.
It’s also between those other two markets so has the best chance to draw TV viewership (and maybe ticket buyers) from both.
Cincinnati has never been willing or able to build a new arena. The deals they gave to the Bengals and Reds were very generous, so I don’t think they’re in the mood to build an arena for an NHL or NBA team that might never materialize. (Cincinnati had an NBA team long ago, of course. It wasn’t hugely popular).
Cleveland has an arena, but apparently Dan Gilbert does not want an NHL team to compete with the Cavs for attention and sponsorships. The AHL Monsters draw pretty well, so he does not have much incentive to want an NHL team.
“one week’s worth of visitors is not worth building a new arena. …. they could get NCAA basketball regionals, but those don’t really justify a big public expenditure either.”
Clearly, you have no future in municipal governance.
I appreciate the compliment.
Charlotte wasn’t considered for the NHL at the time, and won’t be in the future, because the market is already occupied by three other competitors for discretionary incomes (NBA, NFL, MLS). A Charlotte-based hockey team, even one in the NHL, would be its red-headed stepchild.
Back when the Whalers relocation occurred, it was between Raleigh and Columbus, each of which were already turning shovels on new arenas whether or not a professional team was entering their premises. Raleigh isn’t the size of Charlotte but has been growing at a faster rate the past two decades (much to my chagrin while navigating traffic at times), while Columbus is if I’m not mistaken now more populated than Cincinnati and Cleveland combined. Both they, and Nashville, were considered to be questionable markets for the NHL to enter into. Time has answered those questions however.
“Raleigh-Durham” is considered a slur by some who live here, by the way.
No, Columbus, Cincinnati and Cleveland each have a bit more than 2 million in their respective metro areas as of 2022. Cincinnati is the biggest for now.
The Office of Budget and Management calls the Triangle the Raleigh-Cary-Durham area, but I guess most people haven’t heard of Cary yet.
Y’all forget the first pro sport to take root in North Carolina … NASCAR.
“Raleigh” may be the 41st, but the reality that’s a Census Bureau thing. A better look is to combine the “Raleigh-Cary” and “Durham-Chapel Hill” MSAs. That’s the real market. It’s around #30 and jumping up a couple of spots every decade. Nielsen has the market at #24 and climbing (includes Fayetteville area, which is generous).
It’s all very similar to the brief period where the Census Bureau separated the Missouri and Kansas sides of the KC metro into different MSAs – until intense lobbying got them recombined. Neither the MSA or CSA (or CBSA) lists provide a one-size fits all definitive look at metro sizes. RDU (or The Triangle) is one that falls through the cracks.
It’s definitely not a “Top 20” market, but these leagues have 30 teams, and Raleigh-Durham is fine. And after 25 years, the Hurricanes are more than well established. It is now a well established market. Much like older and colder markets, the arena rocks when the team is doing well and “good seats are still available” when they suck. The Charlotte Checkers were the Canes minor league club for a good 10+ years. Dundon taking over the team has brought a lot of changes, many controversial.
But looking at specific teams or leagues in isolation doesn’t really explain the financial load for sponsors and broadcaster revenue streams on a market. While the three ACC schools do pull attention in the RDU market, the Canes have a huge broadcast and sponsorship area with little real competition as the AAA Bulls, NWSL Courage, and minor league NCFC are much more niche audiences. Columbus’ Blue Jackets have to compete in Columbus with Ohio State and the Crew, and the various major league teams in Cincinnati and Cleveland do limit some of the available sponsorship and broadcast revenues.
But Raleigh-Durham will likely never get a second “Major League” team unless the NWSL ever really reaches that status or MLS makes it to 36-40 teams. I would expect Charlotte to get a fourth (my money is on MLB) before RDU gets a second.
There’s a reason there’s no copy of the lease agreement. There is no lease agreement executed as yet. What they announced was signing off on a “term sheet,” which is about as binding as me pinky swearing. The details will be known in time, but the local sentiment could best be described by a “shrug” emoji – no one’s concerned about the amount of money, the details, or that it’s a 15 year extension rather than the 20 they claimed it to be.
Raleigh is an area that, thankfully, tends to put together truly long-range plans, then tends to stick to them except for minor adjustments as needed. There’s the seed of a plan already in place to replace the existing arena come 2039, 2044 or whenever. NC State has gradually evolved from co-pilot to economy class passenger though, which is odd considering that the university was the impetus behind the building decades ago.
As I understand it, the push for a new arena began in the Jim Valvano era, before they could have imagined an NHL team succeeding in the southeast.
Yes, the Raleigh area was going to build the arena whether it secured a professional team as a tenant or not. The only real carrot Karmanos got by relocating the Whalers was that the Hurricanes would be the arena’s “primary tenant,” giving it priority over NC State on date selections. Within a few years however, that status morphed into one where the Hurricanes had de facto control over the facility – complete with the ability to shut out anyone but NC State if it desired. The last pro team to occupy the arena was the original AFL’s Carolina Cobras – who were all but forced to leave Raleigh after three years, despite selling out most of its games, in no small part because they couldn’t secure suitable dates for home games.
Making that particular matter more sad is that across town there is a 60 or so year old, 5,500-seat arena (Dorton) which has been allowed to rot, yet cannot be torn down because it holds landmark status. If we spent a third of what we’re putting into the new arena into the old one (and I for one would be in favor of doing so on top of what’s being spent for the “new” arena), Raleigh would have not one but two arenas: one capable of hosting major-league level teams and events, and one capable of hosting minor-league level (e.g., indoor football, etc.) teams and events, along with smaller concerts.
Indoor football isn’t really a viable enterprise any more, apparently.
After the Dean Dome in Chapel Hill opened in 1986, the push for a replacement to Reynolds Coliseum at NC State began.
It really is amazing how good PNC Arena is for hockey given that most of the foundations were poured for a basketball specific arena when Karmanos made the push to relocate the Whalers. I don’t know who the architectural firm was, but they worked magic – changing the layout during construction. That said, as someone who has spent plenty of time working in the bowels of the arena, you can quickly tell what some of the compromises underneath are, but the fan accessible areas are still great. There’s honestly no good reason other than greed to build another arena at this point, but as denizens of this site know, 20-25 years is somehow the new “ancient”.
The fact is that the Canes, even with paltry crowds in Greensboro the first two years, were successful from the start. Hartford was in a terrible situation – business-wise. The ability to get sponsorships and broadcast revenue being squeezed by the then 8 or 9 “major league” teams in New York City area and the others in Boston reduced to the club to ticket/merchandising revenue.
Once the team moved into the RESA (now PNC Arena) the business side really took off. And that’s what keeps teams in markets. Acceptable losses – especially if those losses can be shoved off onto the taxpayers.
And in 1997/98 Raleigh-Durham was more attractive than Charlotte as the latter was still absorbing the financial load of the Panthers and Hornets. Raleigh-Durham was virgin territory for a major league pro club. 25 years later, it’s just a generic NHL market.
What if the team receives a massive subsidy and reneges on its promises of development? My guess is that the authorities would do what they’ve done in Detroit.
Here the city gave the Illitches, the Red Wing owners, $400 million in various forms of subsidies to develop the area around the arena and nothing much was done about it. Seeing that a solemn (and written promise) by the team ownership was not followed through, the Detroit city government rose in righteous anger…and added $780 million more in benefits.
That’ll learn ’em. They’ll never do THAT again.
I mean, sure, the Illitches are never going to do anything together again obviously, but still. Ya gotta be strong in negotiations.
So, at first blush this doesn’t seem like a terrible deal compared with many others. However, the promise to spend $800 million in surrounding development sounds like code for “Dundon gets to market/control the surrounding area and pocket the rent from those developments.” He’s likely not contributing any of the “$800 million” in private development.
Dundon may well spend to build whatever private development happens. But even if he does, that’s not really a return on public investment: “How about you give me $300m to spend on me, and I give myself another $800m to spend on me?” isn’t much of a deal.