The developers behind a proposal to build a new arena, field house, and hotel development in downtown Pensacola that could cost $70-$100 million have revealed conceptual renderings and updated plans for the project.
The project plans obtained exclusively by The Pulse detail the conceptual design and layout of the facilities.
Development being considered for one of two downtown sites
Artist renderings feature a development featuring at least five several story buildings, including a multi-use 6,500-fixed seat arena and events center, a 100,000 square foot sports tourism field house, a 120-150 room hotel, and at least two multi-story parking garages, along with mixed-use parcels, such as retail shops and restaurants, surrounding the development.
The updated plans are to be presented to the Escambia County Board of County Commissioners Thursday evening, where commissioners will vote on whether or not to move forward with the project.
Spearheaded by Pensacola hotelier Jay Patel and a coalition of local and out-of-state corporations and developers, the proposed new arena development’s price tag could top $100 million, with developers seeking to fully finance the project through private funding and then leasing it back to Escambia County for 30 years.
The development group — operating under the name Pensacola Arena Development Partners (PADP) — proposes two potential sites for the project, both in downtown Pensacola. One preferred option is the former 19-acre ECUA Main Street wastewater plant property, now owned by developer Quint Studer, who previously said he is land-banking the property for future development. The other option would include razing the 32-year-old Pensacola Bay Center and redeveloping the 12-acre site.
Both proposed sites would include building essentially the same facilities and would be designed to host both an NBA G League team, such as the New Orleans Pelicans, and the Pensacola Ice Flyers hockey team. The arena and field house would also host larger conventions, sports events, and meetings.
A neighboring 120-150 room hotel would be built adjacent to the development and managed by a private hotelier, according to lead developer Jay Patel, who owns several hotels in the Pensacola Bay area.
Project to be privately financed then leased back to county over 30 years
Patel said the upfront private sector investment to build the project is what makes the project stand out from other similar developments that have been proposed across the country.
“What should be the most important factor is that we’re taking the risk up front,” Patel said. “In the past, we’ve been unable to bring these types of projects to Pensacola because developers didn’t want to take the risk. We feel that’s changed and that’s why we’re making this proposal.”
While the developers propose paying the entirety of the $70-$100 million project upfront, they will be asking the county to pay back the development team through a variety of funding sources.
Among them, PADP will ask the county to dedicate the $1.3 million in bed taxes currently used to subsidize the Bay Center’s operations toward debt payments on the project over a 30-year lease, along with the $200,000 in Local Option Sales Tax dollars spent annually to cover maintenance at the Bay Center. At the end of the lease, the county would own the facilities outright.
According to conceptual financial details released by PADP, anticipated lease payments could range from $3-5 million annually during the first five years the facility is open, expected to be largely paid for with Triumph funding, then between $2.3 million and $4.3 million annually through the remainder of the 30-year lease.
Additionally, the county would be responsible for any operational shortfalls on the facilities, if any. According to PADP, the anticipated operating loss on the new arena and field house would be offset by a lease payment from a hotel and future mixed-use development on the chosen site. Profits from the private components of the project could be shared between the county and PADP or used to subsidize the operations of the arena and field house.
Project largely depends on Triumph funding, tax credits
To move forward, PADP will largely depend on the award of up to $45 million in funding — up to $20 million in federally-controlled New Market Tax Credits and up to $25 million in Triumph Gulf Coast funding.
Triumph Gulf Coast is the entity controlling $1.5 billion in funds to be distributed through 2033 to local communities as a result of the 2010 Deepwater Horizon oil spill. Triumph is mandated to award and distribute funds to organizations and projects that focus primarily on economic recovery. PADP partners feel confident of their ability to secure funding from Triumph for the project.
“I’m very confident,” Patel said, referring to securing Triumph funds for the project. “We’ve designed our economic and financial models specifically to secure Triumph funding.”
Triumph requires that projects meet a variety of criteria before they can be awarded funding, to include “generating maximum economic benefits,” whether the project is a public-private partnership, if it promotes new job creation, promotes tourism, and demonstrates long-term financial sustainability, among others.
“Our project meets nearly all the [Triumph] criteria,” Patel said. “They will ask us if this will be a public facility if it’ll be a public-private partnership, if it’ll create jobs, and if it’ll make an impact on tourism.”
In addition to Triumph funding, PADP will seek up to $20 million in federally controlled New Market Tax Credits. PADP could also seek Local Option Sales Tax funding, along with a property tax abatement from the city and/or county, such as an Economic Development Ad Valorem Tax Exemption, or EDATE.
Decision tonight will likely decide fate of project
The consortium of development partners will ask commissioners Thursday evening to conceptually approve moving forward with the project, allowing pre-development and design of the project to continue and county staff to begin due diligence and negotiations on the project.
If commissioners vote to move forward, Florida statutes require that a public notice be issued to allow for other proposals to be submitted for the project from other interested developers. Additionally, the project would have to be reviewed by an independent architect and engineer and an independent analysis of the project’s financial feasibility would be required.