A new arena in downtown Pensacola isn’t necessary to host a proposed NBA G League team, according to SMG, the company which manages the Pensacola Bay Center.
Instead, a “limited investment” in the 33-year-old Bay Center would bring the facility up to the standards required for G League basketball, according to a new proposal submitted by SMG to Escambia County officials. Pensacola is under consideration by the NBA’s New Orleans Pelicans as the potential home for their new development league team, set to begin play by 2019.
“SMG believes that limited investment in the Pensacola Bay Center provides a better, more affordable solution for the County, while preserving a significant community asset,” wrote SMG executive vice president Doug Thornton in a letter to county officials. “Our proposed capital improvements not only take steps to modernize the facility, but they also address the specific capital requirements needed to accommodate an NBA G League franchise, which we know is something that has been of great interest to the community.”
The SMG proposal provides county commissioners with an alternative to the plan presented in October by Pensacola Arena Development Partners, a consortium led by Pensacola businessman Jay Patel. PADP has proposed the development of a $100 million public-private development, anchored by a new arena, event center, and field house and able to accommodate not only G League basketball but sports tournaments, conventions, and other events.
SMG’s proposal sets forth two options for commissioners. The first contemplates using $10 million in so-called “Triumph funds” — a pot of more than $300 million stemming from fines collected as a result of the 2010 Deepwater Horizon oil spill — to fund both general improvements as well as those necessary to meet NBA G League requirements. The project would include a $1.5 million replacement of the arena’s ice plant, $450,000 for a new arena sound system, more than $1 million for a new arena video board and exterior marquees, $1.3 million to remodel bathrooms and concession areas, as well as $1 million to install acoustic walls, among a host of other improvements.
A second “backstop” option would have SMG pay the $2.25 million needed to bring the facility up to G League standards, including the addition of office space, locker rooms, a new basketball court, goal stanchions, and more — all of which would be included in the first option.
Under either proposal, SMG highlights that the county would not be liable for any capital investment, debt issuance, or lease payments. Additionally, the Bay Center’s construction bond was paid off this year and the facility carries no debt service. If either proposal is approved, SMG’s Facility Development division would oversee the renovation project at no cost to the county, in exchange for a five-year extension of SMG’s management contract.
PADP’s proposal for a new arena complex called for $25 million in Triumph funds, a point SMG highlighted in its proposal.
“Scenario 1, when compared to the alternative, would free up $15 million in Triumph fund capacity for other local projects,” Thornton wrote.
Pelicans officials confirmed that SMG’s planned improvements would make the Bay Center a viable option to host the G League team.
“The New Orleans Pelicans continue to examine possible sites for its G League franchise,” wrote Pelicans senior vice president Edward Lang in a letter to SMG’s Cyndee Pennington. “Your commitment to fund and complete the capital improvements necessary to host our G League team is a necessary ‘first step’ in the process, and paves the way for us to strongly consider locating our franchise at the Pensacola Bay Center.”
The team is prepared to begin lease discussions if the capital improvements move forward, Lang wrote.
The Pelicans organization has an existing relationship with SMG, which also manages their home arena in New Orleans, the Smoothie King Center, as well as the Mercedes-Benz Superdome, home of the NFL’s New Orleans Saints. Both teams are owned by the Benson family. SMG has also overseen multimillion-dollar renovations at both facilities.
In their response, SMG also stated their concerns with PADP’s proposed facility, which would have an arena capacity of 6,500 seats. SMG said a concert venue configuration would likely only allow for 4,500 saleable seats — about half the concert capacity of the Bay Center.
“As a result, an act’s revenue potential will be dramatically reduced in the Pensacola market as the Bay Center’s concert capacity is approximately 8,500 salable seats,” SMG said in their proposal. “This reduction could effectively limit the quality of live entertainment at the venue as tour managers could potentially bypass Pensacola altogether in favor of venues higher earning potential.”
Reached for comment Thursday evening, Patel defended his group’s proposal for a new arena.
“We believe the submitted SMG proposal really has no comparison to our proposal in size, economic impact from multi-use sports tourism, conference and meeting space facilities, that will also include a sports museum,” Patel said. “Our proposal is projected by a national study to generate many heads in beds, create many new jobs, and will even include sustainability for Escambia County’s sports and tourism future.”
Both SMG’s and PADP’s proposals and letters of interest will be discussed at the next county commission regular meeting on December 14.
SMG’s proposal in full: