The authority that oversees PNC Arena on Thursday received a more detailed report on possibilities for major changes to the 23-year-old arena, with a new focus on the proposed development of an adjacent entertainment district.
The report by CAA ICON to the Centennial Authority on Thursday laid out a road map for not only arena renovations but the “ancillary development” that could include hotels, retail shops, restaurants and a concert venue outside the arena, as proposed by Carolina Hurricanes owner Tom Dundon.
CAA ICON, the strategic management consulting firm contracted by the authority, noted the development of the almost 80 acres surrounding the arena, north of Carter-Finley Stadium, is likely essential to further extending the Hurricanes’ lease with the authority, the arena landlord. The current lease runs through 2029 but the Hurricanes can buy their way out as early as 2024.
“Time is of the essence given the current lease situation,” the report states. “An extension could also be an important component of a potential ancillary real estate development project.”
Dundon, a Dallas billionaire, and the Hurricanes have the first right of refusal to participate as a development partner and would have 90 days to make a decision before the authority could entertain a third-party developer, the report said.
CAA ICON consultant Dan Barrett, who prepared the report and also served as the authority’s representative in the recent lease negotiations with the Hurricanes, recommended the authority proceed with Gale Force as the primary developer initially, rather than open the process up to other developers.
Working directly with Gale Force “allows for a much more cooperative approach to negotiations on both the arena lease extension and the development,” Barrett said.
The CAA ICON report also lists the large number of agencies and parties that would have to approve the process because of the many overlapping agreements, including the North Carolina Department of Administration and N.C. State.
“The ancillary development is important, not just for the ability to entice (the Hurricanes) potentially to extend their lease, but more importantly as an important amenity to the community,” Barrett said. “It can create a different experience going to events here — create a destination, a year-round destination that doesn’t currently exist here.”
Arena upgrades, developments elsewhere
As part of the work the firm completed for the authority, CAA ICON developed case studies on other NHL venues undergoing arena renovation projects, including Tampa Bay and St. Louis. It also studied the $215 million renovation of the Spectrum Center in Charlotte that is publicly financed.
PNC Arena, which opened in 1999, is used for Hurricanes games and N.C. State men’s basketball games, as well as concerts, meetings and other events. There are about 4,000 parking sports outside the arena used for Wolfpack football games as well as basketball games. (Carter-Finley also has 4,000 spots of its own.)
Some or all of those surface parking spots would have to be converted into parking decks to allow the development of that land. The N.C. State Fair also uses those lots for fairgrounds parking.
“We understand some of the sensitivities, but that’s going to need to be flushed out and really understood well by all of the parties, so that a solution can be crafted everyone feels good about going forward,” Barrett said.
Proposed plans for the renovation of PNC Arena completed by Ratio and HOK would include expansion of an indoor/outdoor plaza area on the south end of the arena, expansion of the Hurricanes team store, and improvement to concourse areas including the addition of “view terraces” on the upper concourse.
Gale Force Sports & Entertainment, the corporate umbrella that includes the Hurricanes, has agreed to an arena lease extension through September 2029. The authority would like to add to it, mindful that a commitment to the ancillary development and entertainment district will be a key component in the negotiations.
As a part of the CAA ICON report, other case studies were done on ancillary developments in similar-sized markets, including Austin, Texas; Columbus, Ohio; Milwaukee and Edmonton, Alberta. Another study was done on The Battery at the Atlanta Braves’ new stadium, Truist Park.
‘Potential threat of relocation’
The CAA ICON report notes that the firm met with representatives with officials from the City of Raleigh, Wake County, Gale Force, NCSU, the state departments of Administration, Agriculture and Commerce, the General Assembly and development firms Kane Realty of Raleigh and Dallas-based Woods Capital.
The CAA ICON report said: “While the scope, scale and focus of a renovation will be central to a long-term lease extension with the Hurricanes, it must also adequately address the needs of N.C. State and other building users.”
The renovation and ancillary development projects would be completed in phases, which could overlap, although no timeline has been determined.
“What’s important in this location particularly, because it’s not a downtown location, the first phase has to have a certain critical mass so that is a destination in and of itself,” Barrett said. “It can’t just be driven by when events are happening at the arena or stadium.”
The report noted that the “potential threat of relocation has often driven the cost and funding for NBA/NHL arenas, particularly in smaller markets such as Raleigh.” The report included a list of nine “rumored NHL relocation markets” such as Houston and Portland, Oregon. NHL commissioner Gary Bettman alluded to the possibility such of a move when he visited Raleigh in May.
“On behalf of the league, we like being here and I know Tom likes being here and wants to be here,” Bettman told The News & Observer then. “But obviously there’s work to be done to make sure that the team and the community have something that is today’s standards.”
Authority chairman Philip Isley agreed, saying Thursday the development of the area around the arena was long overdue.
“That’s what they expected in 1997, 1999,” Isley said. “We’re 25 years down the line here, but finally things are beginning to coalesce to a point where things are headed in the right direction.”