THE VIRGINIAN-PILOT
Copyright (c) 1997, Landmark Communications, Inc.
DATE: Wednesday, February 5, 1997 TAG: 9702050467
SECTION: LOCAL PAGE: B4 EDITION: FINAL
SERIES: NHL In Hampton Roads
SOURCE: BY HARRY MINIUM, STAFF WRITER
LENGTH: 64 lines
Raleigh's City Council approved $48 million in hotel tax increases to help fund a proposed $120 million, 21,000-seat arena, but it added a contingency that may sink the city's hopes for a National Hockey League team.
The City Council voted 5-3 to approve the increases but only on the condition that the city and Wake County receive $2 million per year in revenue from the NHL team.
That revenue was not included in a preliminary lease agreed to by Charlotte businessman Felix Sabates, who has applied to bring an NHL expansion franchise to Raleigh, and the Centennial Authority, which will construct the arena. Sabates would operate the arena under terms of the preliminary lease.
Raleigh is considered one of Hampton Roads' chief competitors for an NHL expansion franchise. The two regions, along with Columbus, Ohio, and St. Paul, Minn., are believed to be the leading candidates for what could be a fourth and final franchise in the NHL's next round of expansion. Atlanta, Houston and Nashville are expected to get teams.
Carl Scheer, former general manager of the NBA's Charlotte Hornets who has led Raleigh's NHL effort for Sabates, said he's worried the demand for $2 million per year may make it impossible for an NHL team to make money.
NHL commissioner Gary Bettman has said repeatedly that leases for expansion teams must be structured to ensure the teams make money if they draw well.
``The (Centennial) authority seems to think they can make it work'' in lease negotiations next week, Sheer said. ``I'm withholding judgment on it.
``It's a great day for Raleigh and the Triangle area. They're definitely going to get their building. Whether they get an NHL team remains to be seen.''
Sabates already has made significant concessions in arena negotiations. He will provide about $12 million up front, provide a minimum of $650,000 per year for maintenance and would be responsible for any operational deficits.
Charlotte businessman George Shinn, who has applied to bring an NHL team to Hampton Roads, would pay $1 million a year in rent and would not provide any money up front according to terms of an arena agreement he reached with the Hampton Roads Partnership.
The Raleigh arena will be funded jointly by the city, county, North Carolina State University and the state of North Carolina.
The arena appropriation was bitterly opposed by Mayor Tom Fetzer and most of the city's Republican faction, who say the arena is too large and expensive.
Wake County officials did not ask for the $2 million in their resolution passed unanimously two weeks ago. County and city officials will meet later this week to work out differences in the two resolutions, which must be identical in wording before receiving final approval by both governments.
Sabates told The News & Observer that Bettman has insisted that Raleigh have the outlines of a lease agreement at the league's New York headquarters no later than Feb. 13. The league's executive committee is expected to begin the process of picking four expansion teams from nine cities on Feb. 18 in New York.
NHL sources told The Tennessean in Nashville on Tuesday that the NHL could choose the four expansion cities at that meeting, or by early March at the latest.
``I'm sure there's a way to make this work if they want a hockey team here,'' Sabates told the Raleigh newspaper. ``This is probably the only shot the Triangle has at a major league sports team. We've got to find a way to make it work.''
KEYWORDS: NATIONAL HOCKEY LEAGUE FRANCHISE ARENA