Amway Center

Mike0476

Mike0476

Starter
Ailene Voisin wrote a blog on her touring the brand new Amway Center with Magic CEO Alex Martins and media director Joel Glass. She will have an in-depth article next week on how the Amway Center was financed, entities, why it took 11 years to complete the process of making a dream a reality, etc.

Some quick facts:

Opened in October 2010.
* Cost $385 million, $5 million in cost overrides paid by the club.
* Located in downtown Orlando, connected to the Church Street entertainment district.
* Owned and operated by the City of Orlando.
* Seating capacity of 19,000 can be expanded to 20,000
* Primary funding source: A one cent increase in tourism tax (from five to six cents); half of that additional center is designated for tourism
* The deal is three-pronged and includes the Amway Center, the Performing Arts Center and renovations to the Citrus Bowl.
* All signage and advertising within the arena is digital.

http://blogs.sacbee.com/sports/kings/archives/2011/02/amway-center-to.html

Check out these two videos on the Amway Center:

1. State of Downtown 2010 Intro

http://www.youtube.com/watch?v=cxbOXeimNkE

2. Amway Center Behind The Scenes Tour

http://www.youtube.com/watch?v=DZqUkIrqChY
 
The Amway Center was funded by a bond issue and it is owned by the city of Orlando. Parking, signage fees, etc. go to the city.
 
I made my trip to the Amway Center and it's hands down the best arena in the league and I've been to all of them. I never expected Sacramento to pony up for a building like that but at least something on par with what they have in Miami, Portland or San Antonio.
 
Beautiful arena and I would love to see something like that built, but not to sound too much like a Debbie downer, there are some other considerations to be concerned about. I know Wiki can be edited by anyone, but this is a little disconcerting:

On April 3, 2010 it was reported that Fitch Rating Agency had downgraded the bonds used to finance the new arena to "junk" status and further warned the arena's debt holders that in as soon as 30 months the new Amway Center could be faced with a default unless finances are corrected. The city and county were quick to assure local media that in no way would Fitch's downgrade delay construction and that all necessary funds were on hand to complete the center. However because of the Fitch downgrade the interest rate on the debt payments would increase the "payoff" cost of the Amway Center over time and the Orlando Sentinel pointed out that it would be harder to seek lending for the other phases of the project such as the "$425 million Dr. Phillips Center for the Performing Arts and the $175 million renovation of the Florida Citrus Bowl stadium." [12]

The downgrade to "junk" of the Amway Center's debt—although reversible—signals that unless local government either expands tax revenue or drastically reduces both Amway Center and non-center expenses, creditors could in just a short few years seek bankruptcy relief in the form of repossession or auctioning off the new center. Such a move would probably not threaten the Magic's status as tenant in the venue.

Stuff like this makes me wonder if, now that the economy is way worse than it was when the Orlando deal was agreed upon, Taylor's group might just come back and say, "It really isn't possible right now to do it." Maybe that is why guys like Stern are so pessimistic right now because they have their own team of accountants saying it is unlikely in this economy that anything will get done, especially in a small market.

Not very encouraging to say the least.
 
Last edited:
Fireplug said:
Beautiful arena and I would love to see something like that built, but not to sound too much like a Debbie downer, there are some other considerations to be concerned about. I know Wiki can be edited by anyone, but this is a little disconcerting:

On April 3, 2010 it was reported that Fitch Rating Agency had downgraded the bonds used to finance the new arena to "junk" status and further warned the arena's debt holders that in as soon as 30 months the new Amway Center could be faced with a default unless finances are corrected. The city and county were quick to assure local media that in no way would Fitch's downgrade delay construction and that all necessary funds were on hand to complete the center. However because of the Fitch downgrade the interest rate on the debt payments would increase the "payoff" cost of the Amway Center over time and the Orlando Sentinel pointed out that it would be harder to seek lending for the other phases of the project such as the "$425 million Dr. Phillips Center for the Performing Arts and the $175 million renovation of the Florida Citrus Bowl stadium." [12]

The downgrade to "junk" of the Amway Center's debt—although reversible—signals that unless local government either expands tax revenue or drastically reduces both Amway Center and non-center expenses, creditors could in just a short few years seek bankruptcy relief in the form of repossession or auctioning off the new center. Such a move would probably not threaten the Magic's status as tenant in the venue.

Stuff like this makes me wonder if, now that the economy is way worse than it was when the Orlando deal was agreed upon, Taylor's group might just come back and say, "It really isn't possible right now to do it." Maybe that is why guys like Stern are so pessimistic right now because they have their own team of accountants saying it is unlikely in this economy that anything will get done, especially in a small market.

Not very encouraging to say the least.
Click to expand...

It's always possible to do a deal. It's just a matter of how it is structured. What is probably needed is some sort of tax increase that doesn't involve a vote. Voters aren't going to like that and the pols probably would not push that, unless the tax were levied on outsiders. Of course, I am thinking of hotel/motel and car rental taxes. I don't know how much flexibility you guys have with that and what the legalities might be in terms of the state and/or caps.
 
twosomeca said:
It's always possible to do a deal. It's just a matter of how it is structured. What is probably needed is some sort of tax increase that doesn't involve a vote. Voters aren't going to like that and the pols probably would not push that, unless the tax were levied on outsiders. Of course, I am thinking of hotel/motel and car rental taxes. I don't know how much flexibility you guys have with that and what the legalities might be in terms of the state and/or caps.
Click to expand...

Sacramento has one of the lowest hotel/rental taxes of any major city.
 
Section 101 said:
Sacramento has one of the lowest hotel/rental taxes of any major city.
Click to expand...

Ok, so why isn't that a central feature of the plan? Is it because it wouldn't bring in enough money? You guys are not a major convention town, but you are big in terms of state government and even fed government travel. I know because I have done it. The Sac Hyatt is known throughout the state as THE best place to stay in Sacramento. Everyone is always trying to score government rates there. ;)
 
twosomeca said:
Ok, so why isn't that a central feature of the plan? Is it because it wouldn't bring in enough money? You guys are not a major convention town, but you are big in terms of state government and even fed government travel. I know because I have done it. The Sac Hyatt is known throughout the state as THE best place to stay in Sacramento. Everyone is always trying to score government rates there. ;)
Click to expand...

Even if it didn't bring in enough, it would still bring in something, which is more than nothing.
 
I feel they probably have rough numbers. They probably even know what kinds of taxes they have to work with. The council works on this way more than people realize. But the it has to appear that due process is taking place. It's not over yet.
 
Taylor/ICON said that they will present the city with a "menu" of choices for raising revenue for an arena. If it's hotel/motel tax, food and beverage, rental car or similar, then to get the money up front the city would sell a bond(s) and the taxes would be committed to pay off the bond.

A bond isn't actually city money, it's private investor money. However, the city would be guaranteeing repayment. The idea of bond funds has been floated before in Sacramento. It raised negative responses from the usual suspects. Some people don't seem to realize that the $70 million the Kings owe to the city will not go to the city. It is money that will be paid back to the private investors.
 
kennadog said:
Taylor/ICON said that they will present the city with a "menu" of choices for raising revenue for an arena. If it's hotel/motel tax, food and beverage, rental car or similar, then to get the money up front the city would sell a bond(s) and the taxes would be committed to pay off the bond.

A bond isn't actually city money, it's private investor money. However, the city would be guaranteeing repayment. The idea of bond funds has been floated before in Sacramento. It raised negative responses from the usual suspects. Some people don't seem to realize that the $70 million the Kings owe to the city will not go to the city. It is money that will be paid back to the private investors.
Click to expand...

SOME people have an agenda that creates wax in the ears so that rational and accurate thought does not reach their brain.
 
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