Pensacola, Florida
Thursday November 23rd 2017

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The Pelicans Pitch Part 2

By Duwayne Escobedo

On Sept. 7, Pensacola Mayor Ashton Hayward appeared twice before Escambia Board of County Commissioners (BCC) to ask for its support to bring a NBA developmental team owned by the NBA New Orleans Pelicans to Pensacola.

At the morning agenda review, Hayward said he believed the G League team would bring more revenue to the city and county. The New Orleans Pelicans on March 31 sent to six cities a request for proposals to host a new affiliate team.  Only two cities made presentations—Pensacola and Shreveport, La.

Mayor Hayward, his staff and Pensacola Sports Executive Director Ray Palmer made a presentation to team officials on June 7.  Since then, neither Mayor Hayward or Pelican officials have offered many details about what would be needed to lure the team.

Hayward told the BCC that he thought Pensacola had a better chance than Shreveport of landing the NBA affiliate, even though Shreveport has proposed a new arena as part of a $150-million downtown redevelopment plan.

“I’m a politician so I’m always optimistic about winning, and I don’t like to lose,” Hayward said. “So I think we got the edge right now. It’s a team effort, all hands are on deck.”

He continued. “I think we need to pull up our socks and let’s try to make a deal happen, if it’s a win for the community. Again, I think we should look at the community—being citizens of Escambia County and Pensacola—to see if we can do something.”

Commission Chairman Doug Underhill said he thought bringing the Pelicans’ developmental team to the Pensacola Bay Center was possible.  However, he wanted to know if both the Pensacola Ice Flyers and the NBA affiliate could both use the facility; what would be the necessary capital investment required; and how much would the operational losses be.

He received those answers at the Agenda Review session. SMG, the company that manages the Bay Center, said the two teams can both play their games at the Bay Center.  Cyndee Pennington, SMG General Manager, said three other SMG properties host hockey and basketball. Ice Flyers owner Greg Harris had told her he would share the facility.

Pennington said working out schedule conflicts would require negotiations between the Ice Flyers and Pelicans. She had sent the open dates to both teams, and they had asked for the same dates.

Both Commissioner Jeff Bergosh and Underhill expressed support for the Ice Flyers continuing to use the Bay Center.

“We’re not taking on the new relationship at the expense of the old,” Underhill said.

However, the Pelicans could impact more than just the Ice Flyers. Under a schedule that includes both hockey and basketball, figure skating clubs would lose 29 days on the ice, while public ice-skating would lose 11 days.

$5-Million Price Tag
Pennington did not hesitate when Underhill asked her point blank how much it would cost the county to host basketball and hockey. It would be $5 million, she said, with basketball costing about $2.5 million.

Pennington and Michael Capps, assistant general manager and director of event services, presented research done by SMG.

Its financial analysis found the New Orleans’ RFP specifications would require a capital investment of $1.66 million to $2.48 million. The estimated the cost of upgrades for the Ice Flyer so that the Bay Center could host both hockey and basketball would cost $1.91 million, which included $1.5 million for an ice plant replacement.

SMG estimated the G League team would operate at a loss when adding indirect costs, such as added employees, insurance, maintenance and utilities. The projected losses ranged between $225,300, if the basketball games average an attendance of 3,500, to $534,042, if attendance averages 1,000.

Paying for the Pelicans didn’t sit well with Commissioner Steven Barry.

“The proposal is going to have to include how it’s going to be paid for,” he said. “I’m not going to support reallocating $5 million from somewhere else tonight or next month for this proposal.”

Commissioner Grover Robinson also expressed concern about the price tag. A new facility might be the best answer, according to Robinson and Commissioner Lumon May. Developer Jay Patel plans to present to the board his proposal for a new arena on Sept. 14.

“We could have both teams,” Robinson said. “We can do it in a much more efficient way. We cannot do it with the Bay Center facility that we currently have. We need a new facility that would be better off dealing with that process.”

Still, the elephant in the room was how to come up with $5 million for the capital improvements and another half million dollars to subsidize the additional operating losses.

Mayor Hayward offered no funds to help with the requirements. Stephen Pate, the Pelicans’ Senior Director of Community and Governmental Affairs, attended the meetings but did not address the board.

The commissioners discussed the feasibility of increasing the bed tax, but the Escambia County Destination Marketing Organization Executive Director Rusty Branch said the hoteliers weren’t interested in increasing the bed tax for improvements at the Bay Center.

“We do not support that because we don’t think that’s the best return for those dollars for the community,” Branch said. “The fifth cent could be a part of that discussion if you’re getting a new facility.”

Start Negotiations
On Thursday night, the commissioners continued their discussion.  In the end, the board voted for county staff to negotiate more with the Pelicans, Ice Flyers and Mayor Hayward, but the commissioners weren’t optimistic a deal could be struck.

“The authorization to go forward and negotiate was very heavily caveated with the bad idea that a large capital investment on the part of Escambia County was not something there was a great appetite for,” said Underhill about the motion. “Nor is there a great appetite for Escambia County funding in any way, including the TDT, additional operational losses at the Bay Center.”

Commissioner Lumon May pressed Mayor Hayward for what his commitment was on funding the venture.

“I’m not allowed negotiate or talk about certain things,” said the mayor. “I think it’s important for staff just to start trying to talk. And some of the things that are important to Mr. Barry and commissioners that will be discussed and probably come to some accommodation.”

“The challenge is we identified $5 million to put into an aging facility,” said Commissioner Robinson.  “I don’t know that any of us thought there was a good investment of any of our taxpayer dollars necessarily. And again, unless the Pelicans and Ice Flyers or somebody else’s private money wants to come in and fund it, I think we’re going to have challenges.”

Mayor Hayward argued that regardless of the challenges. The negotiations need to take place.

“Maybe the number’s five (million dollars), maybe it’s less than five,” said the mayor. “But I think we owe it to people that want to come and grow in our community to discuss if we can do it or we can’t do it. We need to have that conversation with these people.”

Barry said. “I think Mr. Mayor can close that gap. He can close the funding.”

May agreed, “He’s a closer, he can sell it.”

“I think it’s very important as a city and county to talk with people that are very bullish on all fronts, to see if there’s a deal to be had,” said Hayward. “If there is, great. If there’s not, there’s not. But we want to respect that.”