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The Compaq Center/New Arena Articles
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The Compaq Center/New Arena Articles
Rockets find second time is the charm
November 9, 2000
Copyright 2000 MediaVentures
With far less opposition, the Houston Rockets got voter approval for a new arena. The team lost an election last year, but the deal was retooled and opponents were won over. This time 65% of the voters came out in favor of the new deal. The approval does not raise taxes, but allows the Harris County-Houston Sports Authority to use existing funds for the arena.
The Rockets had been courted by Louisville and the NBA said if Houston lost the Rockets, it would be a long time before the league returned to the city.
The proposal requires that the city buy land for the $175 million arena. The sports authority will build a parking garage adjacent to it. A private group has agreed to loan the city the money for construction at no interest. The sports authority would sell bonds for $175 million to build the arena and secure the bonds with money from hotel and car rental taxes. The team's lease of $8.5 million a year would also be used as collateral. The team would get nearly all building revenue, including parking money during team events. The city gets parking revenue from other arena events and for daytime parking.
The sports authority will get the lesser of 5% of the naming rights earnings or $200,000 per year. The naming rights money will apply toward the team's payments. The team spent $2 million in design costs before the election. Work could begin next year with an opening anticipated in 2003.
COMPAQ CENTER COULD BECOME LOVE SHACK
November 2, 2000
Copyright 2000 MediaVenturesA Houston church that bills itself as an "Oasis of Love" wants to take over the Compaq Center when the Rockets and Aeros move into a new arena now under construction. The church now has an 8,200-seat building that it says is too small. The Compaq Center would provide a 16,000-seat venue.
As part of the deal for a new arena, the city is precluded from booking acts into the Compaq Center that compete with the new arena.
The city now gets about $250,000 per year from its lease with Arena Operating Company. The company also pays $1.5 million on arena debt payments. That lease expires in 2003 and the debt will be retired at that time. City officials expect the church would pay at least $1 million in annual rent.
The issue could also be affected by Crescent Real Estate Equities, the company that owns the parking space around the Compaq Center. Parking revenue is divided between Crescent and Arena Operating Co., although Arena Operating's revenue is limited to $500,000.
Since the parking agreement also expires in 2003, Crescent could have a major influence in the center's new tenant because, without parking, the building would be crippled. Crescent has not taken a stand, but reports say the company would prefer that the arena be razed.
Arena gets second vote in Houston
Last year the answer was no to a plan to build a new arena for the Houston Rockets. This November voters will get a chance to decide again whether to help fund a new arena.The deal this time is different, but observers say if voters again reject a proposal, it's likely that the NBA team will look for a new home. If the Rockets move, the NBA has promised that it will be a long time before another franchise is allowed to call Houston home. Voters seem to approve of the issue. A poll taken last weekend shows 58% of those responding said they were in favor. The poll showed a broad band of support, especially among female voters.
The new proposal calls for the arena to be financed primarily through an existing hotel and car rental tax. The city will also provide the land for the arena and some site preparation.
Both the Harris County-Houston Sports Authority and the Rockets have worked to overcome opposition to the plan. Opponents to last year's plan, County Tax Assessor/Collector Paul Bettencourt and Chuck Watson, owner of the IHL Aeros, have come out in favor of the new deal. Watson helped finance the opposition fight last year.
The proposal requires that the city buy land for the arena. The sports authority will build a parking garage adjacent to it. A private group has agreed to loan the city the money for construction at no interest. The sports authority would sell bonds for $175 million to build the arena and secure the bonds with money from hotel and car rental taxes. The team's lease of $8.5 million a year would also be used as collateral. The team would get nearly all building revenue, including parking money during team events. The city gets parking revenue from other arena events and for daytime parking.
The sports authority will get the lesser of 5% of the naming rights earnings or $200,000 per year. The naming rights money will apply toward the team's payments. The team will spend $2 million in design costs before the election. Work could begin next year with an opening anticipated in 2003.
ROCKETS' SUPPORTERS LINE UP FOR EARLY VOTE
October 26, 2000
Copyright 2000 MediaVenturesA group of young supporters of the Houston Rockets waited in line for 17 hours so they could be among the first to vote on funding for a new arena. About 100 young persons took part in the event, urged on by a fan's Internet site.
The pro-arena campaign brought Coach Rudy Tomjanovich in to serve the voters breakfast and provided tee shirts. The shirts had to be reversed before voting to comply with election laws. Opposition workers were in the hall outside the elections office to talk with voters.
Early voting ends Nov. 3 and the general election is November 7, 2000.
POLL FINDS SUPPORT FOR HOUSTON ARENA
October 12, 2000
Copyright 2000 MediaVenturesA poll commissioned by a Houston television station finds 59% of voters in favor of a plan to build a new arena for the Rockets. The poll has the support of young voters and both men and women.
The results come after major opponents to a plan last year signed on to the new issue. Voters will make their decision Nov. 7.
OPPOSITION TO HOUSTON ARENA EMERGES
October 5, 2000
Copyright 2000 MediaVenturesThe Harris County Green Party has mounted an opposition campaign to November's vote on funding for a new arena. The group, which is not nearly as well funded as a group that opposed an arena vote last year, says it does not believe the government should help pay for sports facilities.
The proposal to use existing hotel tax money for the arena will go before voters in November. Voters turned down the issue last year, but the new proposal is considered better for taxpayers and has won support from those who previously opposed it.
Voters veto Houston arena
November 4, 1999
Copyright 1999 MediaVenturesAn unofficial 54% of the voters in Houston said no to a proposal to use existing tax money to build a new sport arena for the Houston Rockets. Rockets officials had few comments after the election, saying they did not expect to lose.
The proposal was opposed by a group saying it was a bad deal for taxpayers. A portion of the funding for the opposition came from Chuck Watson, owner of the IHL Houston Areos, the Rocket's neighbor at the Compaq Center. Both Watson and Rockets owner Leslie Alexander have been investigating the purchase of an NHL team for the city.
The Rockets have a lease at the Compaq Center through 2003 and now could be a candidate for a move. Officials in New Orleans, where a new sports arena just opened, have said they'd love to have an NBA team in their market. Observers say the team now is approachable by other communities and if Houston wants to keep the team, it will likely have to match or exceed offers from others.
The 25-year-old Compaq Center has only 20 luxury suites, no club seats and little opportunity to boost arena revenues. The new $160 million, 18,000-seat arena would have been equally funded by the sports authority and Alexander, owner of the Rockets, WNBA Comets and Thunderbears of the Arena Football League.
The arena deal set a maximum cost. The agreement came after the team gave up its preferred site for the arena and agreed to pay for concession stand build-outs. The team also agreed to provide land for a parking garage. The city would buy the land for the arena and would have managed the facility.
The Rockets also would have the right to sign exclusive advertising agreements for the arena. The authority wanted the sale open, but Alexander wanted to protect sponsors from having competitors' ads in the venue. The agreement extended to temporary advertising that might be sold by a future NHL franchise, should one move into the arena.
Last week arena supporters tied the arena vote to the building of a new NFL stadium. Supporters said there won't be enough money to build a new NFL stadium if the arena was rejected. That's because the ticket and parking tax revenue generated by the arena is needed to free up other cash for the NFL stadium's construction.
Sports authority members now say that because the authority can't cover a 10% overrun on the $310 million construction cost, new revenue from the arena is the only way to make up the difference. The price has gone up because the financing was calculated a year ago and prices increased while Los Angeles attempted to work out a plan
VENUES ON THE BALLOT NOVEMBER 2
Voters in Houston, TX go to the polls Nov. 2 to decide whether to fund an arena in Houston.
The Harris County-Houston Sports Authority has money available, but voters will be asked to approve using some of those funds for an 18,000-seat arena. The $160 million project would be equally funded by the sports authority and Leslie Alexander, owner of the NBA Rockets, WNBA Comets and Thunderbears of the Arena Football League.
The arena deal sets a maximum cost, so cost overruns should not be an issue. The agreement came after the team gave up its preferred site for the arena and agreed to pay for concession stand build-outs. The team will also provide land for a parking garage. The city will buy the land for the arena and will manage the facility.
The Rockets also won the right to sign exclusive advertising agreements for the arena. The authority wanted the sale open, but Alexander wanted to protect sponsors from having competitors' ads in the venue. The agreement extends to temporary advertising that might be sold by a future NHL franchise, should one move into the arena. Current plans are for the IHL Aeros to share the venue.
If voters approve, the venue can open in 2003 when the Rockets' lease at the Compaq Center expires. The new venue is slated to have 125 luxury suites.
WATSON ENTERS HOUSTON ARENA FRAY
October 21, 1999
Copyright 1999 MediaVenturesHouston Aeros owner Chuck Watson entered the battle over a proposed new arena for the city calling the idea an "ugly duck" and offering to help fund the opposition campaign. Watson also began negotiations to use the Astrodome as a hockey arena after the Houston Livestock Show and Rodeo leaves for a new NFL stadium.
Voters will decide on the new arena issue in November. It does not call for an increase in taxes, only approval to use existing money for the project. Pro arena groups are expected to spend more than $2 million to win support. Sources tell the Houston Chronicle that Watson could spend up to $500,000 and so far has given $100,000.
The venue could be the home of the NBA Rockets and possibly the IHL Aeros, depending on the fate of the Compaq Center where both teams now play. Some have suggested the venue could accommodate an NHL team.
Over the weekend Watson commented that the arena is an "ugly duck," then said he would have nothing more to say about the project. Watson believes the public is paying too much for the arena. The venue's $160 million cost is divided between Leslie Alexander, owner of the Rockets, and the Harris County-Houston Sports Authority. Fees will be added to tickets and parking to help fund the public portion of the project. Watson also had concerns over the venue's location and how traffic would be affected.
Meanwhile Watson has been talking with the Harris County-Houston Sports Authority about renovating the interior of the Astrodome for use as a hockey arena. The arena would be part of a sports hall of fame, museum, movie theater and hotel project. No financing plan was outlined.
POLL FINDS HOUSTON RESIDENTS AGAINST NEW ARENA
October 7, 1999
Copyright 1999 MediaVenturesA poll by the Houston Chronicle and KHOU-TV shows that more than 55% of Houston residents would vote against building a new arena even though it won't mean a tax increase. The poll has an error margin of 5%. Both city and county residents are opposed to the issue by nearly equal margins. It has stronger support among African American voters and less among Hispanic voters and whites.
More than $1 million has been raised to help promote the arena issue before voters decide Nov. 2. Leslie Alexander, owner of the NBA Rockets who will use the arena, will match that contribution, bringing the war chest up to nearly $2 million. Many observers believe support can be won in the time available with the money available.
Under the plan to go before voters, the Harris County/Houston Sports Authority will contribute $80 million toward the $160 million cost of a new arena plus $10 million toward concession stands and a $45 million parking garage. The team will invest $80 million in the arena.
WATSON'S SUPPORT SOUGHT FOR NEW HOUSTON ARENA
September 30, 1999
Copyright 1999 MediaVenturesProponents of a new Houston arena are hoping to win Chuck Watson's support for a new arena. Watson is the owner of the IHL Houston Aeros and a new arena could be a problem if it also becomes the home of an NHL team. Many believe Watson could decide to spend up to $500,000 against the arena and negate the efforts of proponents who are expected to spend nearly $1 million promoting the venue.
Promoters have been talking with Watson, asking him to support the Nov. 2 election where voters will be asked to bless the $160 million project. No tax increase is required, but voters must say yes to using existing funds. Les Alexander, owner of the Rockets, will contribute $80 million. Both teams now play at the Compaq Center.
Watson has not taken a stand on the issue other than to say he will not oppose it, but proponents say Watson does not have to take a public stand in order to fund an opposition effort.
Meanwhile proponents are hoping to change the ballot language to add an explanation that private money will be used for part of the construction and to clarify the proposal. Opponents say the change makes the proposal more vague. The city council also voted its support of the project after delaying action for a week to get answers to questions about ticket prices, parking and property tax abatements. The vote was symbolic and not required to put the issue on the ballot.
HOUSTON GROUP FORMS TO SUPPORT NEW ARENA
September 23, 1999
Copyright 1999 MediaVenturesA group that reaches across business and cultural lines has been formed to raise $1.5 million to promote a new arena for the Houston Rockets and Aeros. Voters will decide Nov. 2 on using existing hotel and car rental taxes along with a ticket tax to fund half the $160 million venue. The rest of the money will come from Les Alexander, owner of the Rockets. The most recent polls show that voters are almost evenly split on the proposal.
Meanwhile the city council put off a vote on a resolution supporting the ballot issue until it gets answers to some questions such as the cost of land the city is expected to donate for the project, the future plans for the Compaq Center and how engineers and architects will be chosen for the project. The vote was rescheduled for next week.
DEAL REACHED ON HOUSTON ARENA
September 2, 1999
Copyright 1999 MediaVenturesLes Alexander, owner of the Houston Rockets, and local officials have reached a deal to build a new arena. The plan between the team and Mayor Lee Brown called for an even split of the cost of designing and building the venue, but the Harris County-Houston Sports Authority was concerned that it does not have the funds to meet the obligation and it imposed a ticket tax.
The authority is concerned that paying more for the $160 million arena than it originally planned could jeopardize funding for a new NFL stadium. Financial advisors say the authority can only issue $76 million more in debt, leaving a shortfall on the deal. The authority approved a ticket tax on arena events to make up the difference. The plan calls for the tax to be refunded to the Rockets for all basketball games along with those of the WNBA Comets and AFL Thunderbears. The Comets and the Thunderbears are also owned by Alexander. Ticket taxes on other events would be kept by the authority and would increase bonding capacity by $15 million.
Houston is the NFL's second choice for an NFL team, but it appears Los Angeles could fumble the ball and lose the team. The authority wants to make sure it has plenty of money should the city be awarded the franchise and the cost of the football venue creeps up. The authority has pledged $195 million toward the $310 million stadium. Robert McNair, the NFL proponent and the Houston Livestock Show and Rodeo, a major tenant, are concerned that construction of a retractable roof could increase the estimated cost of the building.
The arena deal sets a maximum cost, so cost overruns should not be an issue. The agreement came after the team gave up its preferred site for the arena and agreed to pay for concession stand build-outs. The team will also provide land for a parking garage. The city will buy the land for the arena and will manage the facility.
The Rockets also won the right to sign exclusive advertising agreements for the arena. The authority wanted the sale open, but Alexander wanted to protect sponsors from having competitors' ads in the venue. The agreement extends to temporary advertising that might be sold by a future NHL franchise, should one move into the arena. Current plans are for the IHL Aeros to share the venue.
Voters will consider the issue in November and, if approved, the venue can open in 2003 when the Rockets' lease at the Compaq Center expires.
HOUSTON PRESSES ROCKETS ON ARENA SITE
August 19, 1999
Copyright 1999 MediaVenturesHouston and Harris County are racing to meet a Wednesday deadline to strike a deal for a new Rockets arena so the issue can be put on November's ballot. While there are several issues to be resolved, the main sticking point is reportedly the team's opposition to a city-owned site for a new arena. The team had previously opposed the site because it is too close to the city's convention center and the new Enron Field where the Astros will play. If the team rejects the site, local officials say the team will have to pay the cost of land that must be acquired.
Team officials believe if all venues are in use at the same time, that parking and traffic problems will result, however, they don't want to pay the estimated $15 million to $40 million cost for buying new property. The Harris County-Houston Sports Authority wants to control the cost of the project and keep it at the projected $160 million. Both sides hope to have an agreement by Aug. 25 so an issue can be prepared for voter approval Nov. 2.
As it stands, the Rockets are asked to pay $100 million for design and construction with $60 million coming from the Authority. A parking garage holding up to 2,500 vehicles would be built by the city or Authority and the team and Authority would split the revenues after operating and capital expenses are paid. The Rockets would operate and maintain the garage.
The team will get all concession, merchandise, club seat, luxury suite, naming rights and advertising earnings from all events at the venue, but the city would have 10 days to use free of charge after operating expenses. If an NHL team were to share the arena, the Rockets would not share in that team's earnings and its rent would be paid to the city. The NHL team would get game-day concession, club seat and some advertising revenue.
The Rockets have not signed off on the Authority's proposal and reportedly want to make a smaller contribution to the venue's construction.
July 29, 1999
Copyright 1999 MediaVenturesThe Rockets and the Harris County-Houston Sports Authority have passed another self-imposed deadline for reaching a deal on a new arena. Both sides are optimistic a deal can be reached by mid-August, which will be plenty of time to get the issue on the November ballot.
ROCKETS' ARENA PLAN COULD MAKE VENUE TOO SMALL FOR NHL TEAM
July 15, 1999
Copyright 1999 MediaventuresThe Houston Rockets say an 18,000-seat arena would be perfect for basketball, allowing them to sell out the house and keep ticket prices at maximum levels, but the size may make the venue too small for an NHL team. If an ice sheet were added to the venue, it would likely reduce the seating by up to 2,000 seats. Rockets officials say the smaller size also makes for better sight-lines and a better atmosphere for basketball.
The Rockets and the Harris County-Houston Sports Authority have been working out the details of an arena proposal they hope to put before voters this fall. The Authority plans to finance the venue with existing funds. The election is to certify that no state funds will be used. The Authority's original plan called for a 20,000-seat arena in hopes of attracting an NHL team to Houston. The arena is estimated to cost.
The Houston Rockets have their eyes on three downtown sites for a new arena. The team hopes to pick a site soon so voters can be asked in November to approve funding the project. No tax increase is anticipated.
HOUSTON ESTIMATES ARENA'S POTENTIAL COST AT $175 MILLION
June 24, 1999
Copyright 1999 MediaVenturesThe Harris County-Houston Sports Authority estimates it will cost $175 million to build a new arena to host the NBA Rockets. The price does not include land, financing and infrastructure costs.
The Authority is negotiating with the Rockets on the issue. The team wants to move out of the Compaq Center for newer digs with more premium seating. If a deal can be reached in time, it would be available for a vote this fall. The Authority must also pick a site for the venue.
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