Wednesday, May 23, 2018
Business

Hold on to your Bolts: Lightning in talks to stay in Tampa through 2037

TAMPA — The Tampa Bay Lightning and Hillsborough County are narrowing in on a deal that would keep the hockey team here until at least 2037.

The two sides hope to have an agreement in place by January, according to county officials.

Under discussion is a proposal for the Lightning to exercise two five-year options to extend the current lease, scheduled to expire in 2027.

In exchange, Hillsborough County will commit $61 million over the next two decades to maintenance and upgrades of Amalie Arena, home of the Lightning and Tampa Bay Storm and one of the area’s top entertainment and concert venues. The money will come from the fifth cent of the Tourist Development Tax, a fee assessed on each night’s stay at a hotel or motel.

"We appreciate county leadership for its care and concern about Amalie Arena’s physical condition and its willingness to consider allocation of the necessary resources to keep it viable for the future," Lightning spokesman Bill Wickett said.

If the Lightning bolts before the lease expires, the team would have to reimburse the county half of its outstanding debt related to the arena. The Lightning also will have to spend $25.9 million on additional renovations before June 30, 2030.

The county owns Amalie Arena, but under the existing contract Hillsborough is not under any obligation to pay for maintenance or upgrades. That onus falls on the team, which runs the day-to-day operations.

If approved by county commissioners, it would be the second time in three years that Hills­borough will pump money into the arena. In 2015, Hillsborough commissioners voted unanimously to split a $25 million upgrade with Lightning owner Jeff Vinik, also using hotel taxes.

That renovation reconstructed the club level, added concession stands, expanded an exterior deck, added two club-level lofts and rebuilt the restrooms. In return, Vinik vowed to keep the team in Tampa through 2021.

County Administrator Mike Merrill said the team’s previous owners "didn’t know what they were doing" and "didn’t maintain the building." When Vinik bought the team in 2010, he used the fortune he amassed as a Wall Street hedge fund manager to pay for a $60 million upgrade that salvaged the facility.

That investment bought a lot of goodwill, Merrill said, and the continued upkeep by the team to modernize the arena has ensured the long-term viability of the 21-year-old facility. The arena first opened as the Ice Palace in 1996.

"We don’t want to have to build a new venue, and it’s about the time that owners start saying they want a new stadium," Merrill said. "Vinik is committing to stay in that building for 20 years. That’s huge. It’s a very worthwhile investment to avoid that cost.

"It’s the way it should be, sharing the cost of a county building, and we don’t have to beat him to do it."

The deal would need approval from the Tampa Sports Authority, the government agency that leases the facility to the Lightning.

Since Vinik purchased the team for a reported $110 million, the Lightning’s value has more than tripled. The team is now worth $390 million, according to the most recent estimate from Forbes magazine.

The Lightning also has experienced its longest period of sustained success, culminating with the franchise’s second trip to the Stanley Cup Finals in 2015. The arena, also run by Vinik’s front office, has become a destination for top musical artists and often hosts other coveted sporting events, like the NCAA Frozen Four hockey championships.

Next year, Amalie Arena will host the NHL All-Star Game.

Vinik’s commitment to keep the team at Amalie coincides with the massive downtown redevelopment he is planning around the arena with Bill Gates’ Cascade Investment. When completed, the $3 billion project known as Water Street Tampa will include a 500-room hotel, the 13-story University of South Florida Morsani College of Medicine and Heart Health Institute, residential towers, a grocery store, office space, and bars and restaurants.

In addition to renovations to Amalie, the County Commission has also in recent years green-lighted multimillion-dollar projects for Raymond James Stadium, home of the Tampa Bay Buccaneers, and George M. Steinbrenner Field, the spring training headquarters of the New York Yankees.

In each instance, the county paid for the upgrades with the Tourist Development Tax, sometimes called the bed tax.

State law restricts usage of the tax to three categories: beach replenishment, tourism marketing and tourism facilities such as museums, convention centers and stadiums.

Because of that, and because the tax is mostly assessed on visitors, commissioners have generally approved stadium expenditures paid by the bed tax. It’s one of the sources that will likely be considered for a Tampa Bay Rays ballpark if the team moves to Tampa.

But at least one commissioner, Stacy White, has more recently said he opposes using bed taxes on a ballpark. In 2015, he voted against the renovation of Raymond James Stadium.

White said he is aware of the county’s discussions with the Lightning but is withholding judgment until an agreement is finalized.

"At this point, I don’t know what, if anything, will come to the board for consideration," White said.

Contact Steve Contorno at [email protected] or
(813) 226-3433. Follow @scontorno.

 
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