Below: A chronology of today's Florida Panthers / Broward County Commission meeting, with highlights of all that was said. Bottom line: A majority of commissioners support giving more hotel taxes to the team.
The Broward County Commission is holding an all day workshop today to attempt to form consensus on how to handle a hefty financial request from the Florida Panthers.
If this is your first exposure to the issue, click here for recent coverage.
I'll be covering the workshop with live blogging today. If you prefer an unedited version, watch it live- streamed here.
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3:05 p.m.: Broward Mayor Barbara Sharief gives direction to staff, based on what her colleagues said and asked for:
1. Analyze the property insurance situation and whether the arena could be brought under the county's umbrella policy.
2. Regarding the 22 acres, analyze what can be put there, and what plans exist in terms of gambling.
3. Regarding the arena, analyze what would/could the county do if the Panthers left.
4. Commissioners will meet individually with county top staff about Section 7 of the staff report, which is the request to alter the contract - the financial guts of the request.
"I've heard a general consensus that you want to do something,'' Sharief said, "but we need to figure out if the number is $4 million or the $6.2 million or something in between or nothing.''
Sharief told the Panthers that "everyone's asking to slow things down," which usually means 60 to 90 days.
Doug Cifu said he'd be agreeable to breaking apart the 22 acre development request from the request for more favorable lease terms.
"To me that is a separate issue,'' he said. He said he and co-owner Vinnie Viola didn't go into the Panthers deal wanting to develop the 22 acres.
He said if it were up to him, he'd have an agreement in a day. But he realizes that won't happen in government.
He said he'd like to have a deal drafted in 30 days.
The county attorney says consultants might have to be hired.
"This is a very complex commercial transaction. It's not what we do for a living,'' said a terse county attorney, Joni Armstrong Coffey.
The time frame will remain 60 to 90 days to get to a finished product ready to be voted on. The real estate part of the deal - the 22 acres - will be broken off and dealt with separately, later.
3:02 p.m.: Mayor Barbara Sharief will be the last commissioner to speak. She starts by saying that the Panthers can't be expected to win every year.
"Let's get that out on the floor right now,'' she said.
She said she'd also like an answer for the press of the debt service amount for the arena.
County staff says it's $225.1 million, consisting of: $150 million principal on the arena debt, plus interest, plus other loans the Arena Operating Company [Panthers sister company] is obligated to pay.
2:54 p.m.: Commissioner Sue Gunzburger, the only current commissioner who was on the dais back in 1996 when the original deal was made, is now speaking. She voted "no'' back then.
She says if the 22 acres to the arena's immediate north is developed, "it should go out [to competitive bid] so we can make sure both the Panthers and the county get the best deal for that property'' rather than just letting the Panthers have it for development.
"We're all looking for the better bottom line,'' she said. "And when you only have one bidder it's like the 800 pound gorilla. I don't need to say more about that.''
Gunzburger notes that by contract the team must stay until 2028.
"Everybody who's worried about them moving, unless they declare bankrutpcy, they can't leave. That's their only way out,'' Gunzburger said. " ... I think we are protected that way.''
Gunzburger says the 2 percent tourist tax added in 1996, bringing the total to 5 percent, can be used for beach renourishment and other uses besides the arena and convention center. She's disputing what the Panthers' attorney Mike Moskowitz said earlier.
Important to note: Gunzburger is from Hollywood, which is vigorously opposed to this proposal. She is also term limited, and in her final year on the commission.
(Commissioner Lois Wexler is term limited but has another two years.)
"I know you make an initial ask of two or three times more than you expect to get, and I'm sure that's the way it's going to turn out,'' Gunzburger concluded.
2:48 p.m.: Commissioner Dale Holness is a yes vote. That was easy.
He says he's been convinced the Panthers will reach out and include communities he represents in the opportunities that come about.
He said he thinks "it's fair to see how we can assist them to ensure this team is successful and stays here.''
Let's hold on for a moment and count votes. Yes, they do have a majority willing to give them a financial break.
The most passionate "yes'' speakers: Commissioners Kristin Jacobs, Dale Holness, Marty Kiar
The middle-of-the-road "yes'' speakers, who said they woudln't accept all of the Panthers request but would give them something: Commissioners Tim Ryan, Lois Wexler
Not participating because her spouse is a lobbyist for the Panthers: Stacy Ritter
Hasn't spoken yet but already told the Sun Sentinel she favors helping the team: Mayor Barbara Sharief
Hasn't spoken yet but voted against the original 2 cent bed tax for the arena in 1996: Sue Gunzburger
2:45 p.m.: I can't crystalize Commissioner Chip LaMarca's position on the Panthers request. He said a lot of things, but I didn't hear anything firm for or against. If I'm wrong, I'll come back and update it. Clearly, he represents the hoteliers who oppose the request. But he's also been arena-friendly in the past.
Now, on to Commissioner Dale Holness.
2:35 p.m.: Commissioner Chip LaMarca says there was a request at the Tourist Development Council to slow down the process. He asked the team owner Doug Cifu what hotel he's staying in. Cifu said he lives in Palm Beach Gardens and is "looking'' for a place in Broward.
"Are you or are you not in a rush?'' LaMarca asked Cifu, who bought the team last year with Vinnie Viola.
"We're losing $100,000 a day,'' he said, "So where I sit, time is of the essence.''
Cifu said the decision could impact other financial moves of the team, regarding payroll and trades.
If the team left, the county would pick up the Panthers' $4.6 million a year, Deputy County Administrator Rob Hernandez said in answer to a LaMarca question, plus $2 million a year in state sales tax rebate that is tied to the presence of a professional sports team.
LaMarca asked if the county had considered selling the land by the arena.
The county administrator said the current agreement runs until 2028 with renewal options.
"We don't really control it,'' she said.
LaMarca suggests analysis be done on the property insurance requirement, one of the Panthers' complaints.
LaMarca: "I don't know that I could support some of the things that are on here but I do see this is an asset, a capital asset.''
2:32 p.m.: Commissioner Chip LaMarca, who earlier today introduced himself as the commissioner who represents "80 percent of Broward's beautiful beaches,'' is now speaking.
I'm not quite sure what his position is. Stay tuned while I figure it out.
2:28 p.m. Fort Lauderdale City Manager Lee Feldman was here earlier. I sent an email to all five on the Fort Lauderdale City Commission to see if they have positions on this request. Will let you know.
2:20 p.m. Commissioner Kristin Jacobs weighs in to support the Panthers request, saying Commissioner Marty Kiar hit a lot of her talking points. Without the arena, the funds from the additional 2 percent bed tax levied in 1996 wouldn't be there (2 cents of the 5 cent tax).
"Should the team go away and we are now on the hook for all the debt obligation associated with the arena'' there'd be no funds for other priorities, Jacobs said.
"We are not adversaries. In fact we are partners,'' she said.
Jacobs said the southern 11 acres at the arena, which the Panthers have development rights to, are now being used as a transit park-and-ride spot.
She said the county hasn't analyzed the property tax revenue if the 22 acres to the north of the arena were developed as the Panthers request.
"For us to stay viable we absolutely have to consider and I think with some sense of urgency what are we going to do with that land?'' Jacobs said.
She suggests the county hire a consultant to look at what type of development would be best on the land.
The County Commission won't be voting today but they'll be giving staff permission to start negotiations, and giving them direction on what they'd be willing to support.
Jacobs said that regarding property insurance, she supports staff analyzing whether the arena is overinsured and would be better brought under the umbrella policy for all county buildings.
Mayor Barbara Sharief is pressuring commissioners not to spend much time giving their opinions.
2:13 p.m. Commissioner Marty Kiar says the Tourist Development Council wanted to ensure the viability of the BB&T Center. He suggests - in a subtle way - that the county tourism czar, Nicki Grossman, misrepresented what the TDC said.
Kiar said the economic health of the arena is of paramount importance. He also says it appears that the Panthers won't sustain their economic losses for a long period of time.
"There is a threat there that they would leave the BB&T Center,'' he said.
He says the value of the arena would plummet without the team.
"And we the county would be responsible for paying the $225.1 million owed. That is very, very lopsided,'' he said.
Kiar also said Live Nation's testimony was important to him. (See below) Live Nation said it would sever its relationship with the arena if the Panthers leave.
Kiar said there are some things he'd like to see. First, they'd have to give up any clawback claim on the 2 cents levied for the arena (see above). Second, they'd need to develop the site even if a casino isn't approved. And he'd like to see the county benefit from profit-sharing or lease payments on that land.
"It's important that we continue to slow the process down but that we move forward,'' he said, " ... to try to figure out a way to ensure that the Panthers arena is economically viable.''
2:09 p.m.: Commissioner Marty Kiar asks the team if they'd "forego'' any claim they might have on the $103 million in bed tax not allocated to arena debt service. No one from the team has ever intimated they would seek any of those funds. Nevertheless, Kiar asked the question and the team said they would not be seeking those funds.
Then he asked the Restaurant and Lodging Association about their comments that under this proposal, the Panthers would be getting 30 percent of the tourist development taxes.
Kiar says "let's just say [the Panthers] filed bankruptcy'' and the county had to pick up the Panthers debt payment and also losing the state's $2 million annual sales tax rebate that helps pay for the arena, "would that mean that a much greater amount of the tourist development tax dollars would be utilized to pay off the debt?''
The answer was yes.
2:07 p.m. It's Commissioner Marty Kiar's turn. "I thought that all of the presentations were excellent,'' said Kiar, who gives out lots of compliments.
2:04 p.m. "I don't have any sand in my district. ... For me the west is as important as the east and the south is as important as the north,'' says Commissioner Lois Wexler. She notes that Sawgrass Mills Mall, right across from BB&T Center, is the "second largest tourist attraction in Florida.''
"I would love to see us move forward in phases,'' Wexler says. "Relief first, and the 22 acres as a second conversation.''
That is similar to what Commissioner Tim Ryan said earlier today. And Mayor Barbara Sharief told us that at the Sun Sentinel editorial board last week.
2:02 p.m. "The chances of there being a Level 5 hurricane are slim to none,'' Commissioner Lois Wexler says, suggesting that the county discuss lowering the amount of insurance held on the BB&T Center in Sunrise, where the Florida Panthers play. Team CEO Michael Yormark says other National Hockey League teams don't pay that much freight for property insurance.
1:57 p.m.: The Florida Panthers are required to insure the BB&T Center to 100 percent of value. After Hurricane Wilma, that requirement was reduced, the county administrator says, but the team was enouraged to continue insuring it 100 percent. The team has complained that property insurance costs are enormous, and peaked at $3 million one year. Last year it was roughly $1.7 million. The team wants to cap its obligation at $1 million. The county would thus pick up a bill of $700,000 or so each year, depending on the insurance bill.
County officials say their other buildings, including the convention center, are covered in an umbrella policy.
1:51 p.m.: Commissioner Lois Wexler brings up some other requests of the Panthers, the lesser items we haven't really delved into. One is that the management fee the county pays the Panthers to run the arena each year would be increased each year by the Consumer Price Index (CPI), the rate of inflation.
"As we move forward in this conversation there are a number of areas for me that I think need continued flushing, so to speak, or tweaking,'' she said.
1:35 p.m.: "Nobody's heard our positions at all, so today's the first day for that opportunity,'' says Commissioner Lois Wexler.
She says the "train left the station'' in 1996 when commissioners approved the deal to partner with the Florida Panthers on building a hockey arena in Sunrise. Whether the team stays or not, the county is "on the hook'' for the bond payments, she said.
She asked Doug Cifu, new owner of the team with Vinnie Viola, whether they'd move the team.
"I just got here. We didn't come with the intent to relocate this franchise,'' he said. "... Our intention is to build a business that has a sustainable and long term business model. We need to do that in partnership with you all. ... The business model is just broken.''
As Cifu went on about how much the team is losing, and saying the owner can't be expected to sustain the losses, Wexler interrupted to tell him, "You knew all of that. You peeled the onion back or you would not be as successful in life as you are. ... It wasn't by being stupid.''
Cifu and Viola just bought the team less than a year ago, for $250 million.
Wexler asked him if he'd honor his agreement to stay at the arena another 14 years, which they're contractually obligated to do.
"I am willing to absolutely give relief. Am I willing to give what you're asking for? No, I'm not,'' Wexler said.
She said she felt in January like the team expected commissioners' heads to nod and approve the deal in whole.
She said she'd be looking for a long term commitment from the team to stay.
She also said the Panthers payroll is "closer to the minimum than the cap'' and she thinks it's very important "that the team be in the winning column.''
"Vinnie and I bought this team to win the Stanley Cup,'' Panthers co-owner Doug Cifu tells Commissioner Lois Wexle.
The payroll cap is going to be $71 million next year, Cifu said. The floor right now is $44 million.
"We will be a player in this market. Vinnie and I came here to win,'' Cifu said. " ... We are here to win in South Florida and we're here to stay.''
The team payroll has been misreported, Cifu said. It's between $60 million and $64 million.
1:30 p.m.: County Commissioner Tim Ryan "not keen at all'' on picking up $500,000 annual maintenance cost of the insurance for the building, he says. He's interesting in helping out on the debt, but wants assurances enough money would be spent on hockey team payroll to ensure the team goes "deep into the playoffs.''
"The operator is already making $8.5 million a year,'' he says of the Panthers. Add in the $4.5 million and they'd be making $13 million operating income average.
"How does that keep the team successful,'' he asks.
1:27 p.m. County auditor says the Florida Panthers last year reported $9 million in arena profits.
Commissioner Tim Ryan asks if county can assure the team doesn't leave if this proposal is approved.
"The whole goal is to keep the Panthers at the arena and keep the arena functioning,'' county administrator says.
1:22 p.m.: "My vision of a partnership is there's a sharing of the responsibility and a sharing of the benefits, of the profits,'' says Commissioner Tim Ryan. "We had an expectation, the county did, maybe it was unrealistic, that at this juncture we would have received $76 million in profits where we've received $331,000.''
Ryan says if Panthers get the county's additional money, the profit sharing threshold should be changed accordingly.
County Auditor Evan Lukic reveals that the proposal actually goes the other way, making it harder for the county to get a share of profits because of what the Panthers wanto to include and exclude in the figures that count toward revenue.
1:19 p.m.: Commissioner Tim Ryan says he has heard no discussion of ground rent, profit sharing, etc., regarding the Panthers' request to have development rights on county land. He suggests the time is not ripe yet for approving that.
1:16 P.M. Back from break.
"Having an entertainment complex that's next to the arena would lead to success,'' Commissioner Tim Ryan says, agreeing with county staff. He noted that the 22 acres sought by the Panthers are much more valuable than the 11 acres the Panthers have a right to build on.
No feasibility study has been done.
12:37 p.m.: The county is taking a short bathroom break.
12:29 p.m. As I suspected earlier, Broward County Tourism Czar Nicki Grossman steps in to correct some possible misimpressions regarding the arena's tourism draw. "Please don't believe ... that 40 percent of the attendees at the arena are filling any hotels,'' she says regarding previous Panther statements today about 40 percent of attendees being from outside the county. The arena's "heads in beds'' number "is not a significant number,'' she said.
12:27 p.m.: Official from Restaurant and Lodging Association urges a rejection to the proposal and then an overall plan for the tourist tax priorities.
12:14 p.m.: County Auditor Evan Lukic says he's distracted because he's awaiting news of his fifth grandchild being born.
"This is a huge deal. It completely changes the original agreement in many respects,'' he says, calling the Panthers a longterm "partner'' that the county has a history of helping.
Lukic goes on to say that his primary concern is "there's little consideration to the county'' for helping.
"They're simply saying they need help'' without offering anything in return.
Lukic said he's also concerned that the county's help would provide an "immediate financial windfall' to the team's owner, increasing the net worth of the team that was just purchased for in excess of $200 million.
He also said that eliminating the team's debt payments would remove any financial penalty to the team one day breaking its lease and moving away.
Lukic also posed the question of why the team is under-performing in the National Hockey League, in terms of single ticket prices and attendance, even compared to the team in Tampa.
"Secondly, the team's performance on the ice has not been stellar, as most would agree,'' he said. He said he was encouraged in talks with the new owners that it could be turned around.
Regarding immediacy, he said this isn't about cash flow. The team has money. This deal should be done "deliberately'' and "comprehensively.''
Lukic said he didn't see any return to the county in giving the team the right to build a casino-hotel on 22 acres of county land on the arena's north. The team currently has rights to develop an 11 acre piece of land on the arena's south. Lukic said the issue shouldn't be decided just yet. No feasibility study has been done to see if the development would succeed, and no offer of "consideration'' to the county has been made.
"We want the team to be here we want the partnership to survive,'' Lukic said, wishing the county commissioners luck in making this hard decision.
12:11 p.m. "We believe there is $225 million in outstanding debt,'' Broward County Administrator Bertha Henry says, explaining that the number differs from some others out there because there are various versions of debt on the arena.
12:03 a.m. Broward County Administrator Bertha Henry says the tourist tax fund has $65.8 million in it. Half of it is earmarked for beach renourishment. All the money is earmarked for something, she said, but she concedes that all of it can be reprogrammed for something else at the board's discretion.
11:56 a.m.: The county found five arenas that lost a major league sports team. By and large they are not faring well. Three arenas, in addition, have been repurposed into other things after teams left. One, for example, is being turned into a Bass Pro Shops mega-store, formerly the Pyramid Arena, where the NBA's Memphis Grizzlies used to play. That one made the audience laugh. There are, in addition, five arenas awaiting demolition, including the Houston Astrodome and Los Angeles Memorial Sports Arena. And then of course we have the already demolished Miami Arena, Amway Arena in Orlando and 11 others.
11:53 a.m.: Here's a link to County Auditor Evan Lukic's strangely short report.
11:42 a.m.: Deputy County Admnistrator Rob Hernandez says the Panthers' deal with Broward County is "middle of the pack.'' Some other major league teams have better deals, but some pay significantly more.
11:36 a.m.: Deputy County Admnistrator Rob Hernandez says the arena has generated $511 million since opening in 1998, which is about 12 percent below projections. The trouble is, the expenses are 44 percent higher than projections.
Regarding profit sharing the county was supposed to get: Anything about $12 million in profits at the arena is shared this way: 80 percent to the Panthers hockey team, 20 percent to the county.
But the profits have been a few million under the profit-sharing threshold throughout the term of the lease, except in 1999 when the county got $331,000 in profit sharing.
"It was estimated Broward County to this day would have received $76 million in revenue,'' he said. "that hasn't happened.''
11:28 a.m.: Deputy County Admnistrator Rob Hernandez says the 872,000 square foot arena is second largest in the southeastern United States and fourth largest in the country.
"It is a big place,'' he says.
The arena site is 140 acres total, including 7,200 parking spaces (plus another 300 or so for a park and ride facility), three vacant, developable parcels and three parcels for wetlands and drainage.
11:19 a.m:. Deputy County Admnistrator Rob Hernandez says the debate is not whether the county should be in the arena business. That's history. "We are in the arena business,'' he says, kicking off the county's presentation.
11:15 a.m.: "There are three components of our ask,'' Yormark says, wrapping up. Here they are: County picks up the Panthers' current $4.5 million annual bond payment for remainder of 14 year contract, increasing county's costs from $8 million a year to $12.5 million a year; county picks up $500,000 a year in maintenance currently paid by Panthers; county picks up cost of insurance if it exceeds $1 million, which it typically does by about $600,000 or $700,000.
Yormark also wants to build on 22 acres of county land that the team currently doesn't have development rights to, and which, under his proposal, would not be put out for competitive bid. He lists this, though, as something he would offer to the county:
"And as was the suggestion of county staff we are willing to develop a parcel at the BB&T Center that will be a benefit to Broward County and enable our corridor out in Sunrise to be a west Broward economic engine.''
Yormark continues: "Time is of the essence.'' Asks for "decisive'' action.
The team's request amounts to $5.6 million to $5.7 million a year for 14 years.
The team is also asking for a few other things, including getting out of the requirement to put $500,000 a year through 2017 into a capital reserve for the arena, and a reduction in financial reporting to the county. To view the term sheet with all the particulars, click here. County Mayor Barbara Sharief adds the capital reserve request to the total figures, which is why she is citing figures higher than are the Sun Sentinel, county administration and the Panthers officials. Because the county would not necessarily pick up that payment, the Sun Sentinel (and the others) are not adding it to the bottom line. Our figure, $78.4 million-$79.8 million, or "about $80 million," indicates financial requests to the county in tourist taxes.
If you included the capital reserve $2 million, the figure would be about $82 million.
11:09 a.m. Rather than put out a detailed analysis, County Auditor Evan Lukic wrote a two page memo suggesting the decision be postponed but giving a few recommendations if it isn't. Strangely brief, given his previous in depth reviews.
Panthers attorney Mike Moskowitz is now saying that the county's bed tax, the 2 percent levied to assist in building the arena, can only be used for the arena and convention center debt, unless the county amends its ordinance again. Not sure what county's legal analysis is but I assume we'll hear in a bit, because the 2 percent tax is being used for other things.
"The money can only be spent as authorized by ordinance,'' he says.
Then again, on any given Tuesday, county commmissioners can pass a new ordinance, he concedes.
11:05 a.m.: Brian Johnson of Minority Builders Coalition is also here on the Panthers' behalf. Next up, though is lawyer lobbyist Mike Moskowitz.
11:02 a.m.: Next up on the Panthers' expert witness list is Hank Fishkind, a hired opinionator regarding economics. He says the true economic impact is the new money brought in. He says roughly 40 percent of the attendees there are from outside Broward County.
He says the annual impact is $102.4 million.
His facts don't jibe with those of Broward tourism official Nicki Grossman, who says her studies show relatively few visitors come here to attend an event at the arena.
11:01 a.m. "An arena's built to be a community asset. ... It's a civic center,'' says Global Spectrum guy who didn't give name.
10:55 a.m.: Commissioners were sent letters in recent days from the cities of Plantation, Deerfield Beach, Hollywood and the town of Davie, as well as the Florida Restaurant and Lodging Association, and the Greater Hollywood Chamber of Commerce, and Hollywood Beach Civic Association, opposing the Florida Panthers' request for additional tourist tax dollars.
10:54 a.m. Expert here now from Global Spectrum, subsidiary of Comcast-Spectacor, to talk about the negative impact to the arena of losing the sports team. Brought here by Panthers.
Losing the team would reduce exposure for the arena, the guys says, reducing the team's ability to sell sponsorships and naming rights.
10:49 a.m. Michael Evans, president of Live Nation Arenas, is here to speak for the Florida Panthers. The company books 90-95 percent of the arena's content, Yormark says.
Evans sent a letter saying that if the Panthers were no longer the anchor tenant of the BB&T Center in Sunrise, "the partnership between Live Nation and the BB&T Center would cease and the number of events that visited the venue on a regular basis would dwindle significantly.''
He says the most successful arenas have professional sports tenants. Yormark has said he uses the Panthers mailing list to promote shows, for one thing.
10:42: a.m. I'll spare you a lot of the minutiae. The expert brought here by the Panthers is talking about other team leases.
"There's a whole slough of details I can get into later if you want,'' he said.
10:36 a.m.: Mitchell Ziets of Tipping Point Sports says that there've been 113 new stadiums and arenas open since 1998 when BB&T Center opened in Sunrise as home to the Florida Panthers. Some of the buildings "already are going through a second life,'' he says.
Buildings that opened in the early to mid-90s, including BB&T Center, "you didn't know then what we know today, and we have learned a whole lot since then.''
10:33 a.m.: The Panthers bring in an expert witness, Mitchell Ziets of Tipping Point Sports, to talk about the lease.
10:31 a.m.: The county's staff report indicates expenses for BB&T Center, where the Panthers play and which they operate via a sister company, are 40 percent higher than anticipated.
Yormark says there are now 19 buildings competing for entertainment programming, whereas there were six when the arena opened.
10:30 a.m.: "As we all know, when you win, people will come. And we need to win,'' Yormark says of commitment to field a better team.
10:29 a.m. Michael Yormark, Panthers CEO: "We need help. We need help. Our organization is losing $30 million a year.''
Cliff Viner told Yormark he lost $112 million during his ownership. He told him "I hope you can fix this partnership.
"We understand that we need to bear the brunt of those losses and we need to demonstrate that we can help ourselves,'' Yormark tells audience of lobbyists, Panthers folks and county staff, plus county commissioners.
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