Category: Florida Panthers

The Florida Panthers‘ arena in Broward County (I’m not going to go through the trouble of remembering its current corporate name) opened 19 years ago, at public expense, as a way to get the team to stay in the Miami area long-term. So, naturally, it’s time for the county to start thinking about tearing it down:

This week, Broward County embraced a development vision for the land, a potential playbook created by the Urban Land Institute… The institute’s land use experts said the county-owned BB&T Center, a giant venue surrounded by parking spaces, represents “an opportunity lost.’’

The main reason for hiring ULI is to figure out how to develop the land around the arena — which the county bought back for $86 million in 2015 — which would have been a better idea before spending the money, but better late than never. But that deal also handed Panthers owner Vincent Viola an out clause in his lease, so the consultants are also being tasked with figuring out what to do with the land if the team leaves:

The consultants explored three alternatives: the Panthers extend their lease, and a casino is added; the Panthers extend their lease, and office and housing are added; and the Panthers leave, the arena is demolished, and housing, a casino and offices are added. The third option would bring in the most tax revenue and income to the county, at an estimated $391.3 million over 11 years, the report said.

On the one hand, you could probably come up with more economically productive uses for the land than a hockey arena, assuming Broward County has much more time before it’s underwater. Though if the county ends up having to build the Panthers a new arena somewhere else to keep them after they opt out of their lease, that’s less helpful. That out clause really was as bad an idea as it sounded at the time.

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.

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.

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 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.