Escambia County commissioners voted on Thursday to move forward with exploring a development group’s unsolicited proposal for a new arena development in downtown Pensacola.
The 4-0 vote — to open the door for 21 days to competing proposals, a move required by state law — is the first of several steps which commissioners must take before moving forward with the proposal submitted by Pensacola Arena Development Partners (PADP).
The public-private partnership, spearheaded by Pensacola hotelier Jay Patel, would include a multi-use 6,500-fixed seat arena and events center, 100,000 square foot sports tourism field house, a 120-150 room hotel, parking garages, and retail development. The project’s price tag could top $100 million, with developers seeking to fully finance the project through private funding and then leasing the arena and field house back to Escambia County for 30 years.
Representatives from PADP — a coalition of more than a half-dozen local and out-of-state firms — delivered a presentation to commissioners earlier Thursday at the board’s agenda review meeting. The development group identified two potential sites for the project: the former 19-acre ECUA Main Street wastewater plant property, now owned by developer Quint Studer, and the 12-acre Pensacola Bay Center site, owned by the county. A third site — located at the city-owned Port of Pensacola — was discussed by commissioners as an option at Thursday evening’s meeting.
Both of PADP’s proposed sites would include essentially the same facilities and would be designed to host both an NBA G League team — such as the one being launched by the New Orleans Pelicans — as well as the Pensacola Ice Flyers hockey team. The arena and field house would also host larger conventions, sports events, and meetings.
The developers have proposed fronting the entire $70-$100 million cost of the project, with the arena and field house then being leased back to the county for a 30-year term. According to conceptual financial details released by PADP, the county’s anticipated lease payments could range from $3-5 million annually during the first five years the facility is open, then between $2.3 million and $4.3 million per year through the remainder of the 30-year lease.
“What should be the most important factor is that we’re taking the risk up front,” Patel said Thursday. “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.”
To pay the lease, the county would use the $1.3 million in bed taxes currently used to subsidize the Bay Center’s operations, along with the $200,000 in Local Option Sales Tax dollars spent annually to cover maintenance at the Bay Center. But the largest source of public funding for the project could be Triumph Gulf Coast, the entity controlling some $1.5 billion in funds to be distributed through 2033 to local communities as a result of the 2010 Deepwater Horizon oil spill. PADP is recommending the county seek up to $25 million in Triumph funding for the arena development, while PADP will seek up to $20 million in federally-controlled New Market Tax Credits.
Patel said Thursday that he was “very confident” the project would be able to win Triumph funds. “We’ve designed our economic and financial models specifically to secure Triumph funding,” Patel said.
In addition to soliciting other proposals, state law requires that PADP’s proposal be reviewed by an independent architect and engineer and that an independent analysis of the project’s financial feasibility take place.