Venue Detail
New Orleans Pelicans
RSV Pro Facilities Report
February, 2016
New Orleans Pelicans
1506 Girod St New Orleans, LA 70113 Phone: 504-301-4000 Fax: 504-301-4121 URL: www.nba.com/hornets Owner: Tom Benson League: National Basketball Association, Western Conference, Southwest
Venue
Smoothie King Center, 1660 Girod St, New Orleans, LA 70112 Owner: Louisiana State Exposition District Managed by: SMG Facility Management Built: 1999 Capacity: 18,500 Permanent concession stands: 34 Concessionaire: Centerplate Suite caterer: Centerplate Soft drink: Coca Cola Beer: Multiple
Naming rights
Sold to: Smoothie King Price: $40,000,000 Term: 10 years Expires: 2024
Ticket prices
Season tickets range from $324 to $3,180 Single tickets range from $12.00 to $1,370.00
Attendance
2013 average attendance: 13,803 2014 average attendance: 16,677
Suites
Quantity: 54 Term: 3 to 5 years Price: $115,000 to $205,000 Seats: 12 to 18
Club seats
Quantity: 2,450 Price: $7,785 to $7,785
Financing
The $110 million arena was completely funded by taxpayers with money from an existing hotel/motel tax.
Naming rights to the arena were sold in 2014 to Smoothie King. The initial term is for 10 years, but the company has an option to renew it for another 10 years. The sale price is based on published estimates.
The arena got millions of dollars in improvements for the 2013 season.
Now there are 16 new loge boxes in the lower bowl that include swivel seating and LED monitors. There's a party perch in the upper bowl where fans can order drinks and mingle at a bar and the Pelicans are considering adding live entertainment that could include a band playing during games.
All of the concession stands throughout the arena have been upgraded with more food options.
A new spacious 12,000 square foot Chairman's Club was built with glass windows overlooking the hallway across from the Pelicans' locker room that will allow 150 front row, courtside season-ticket holders a chance to see and hear the players as they come out.
Trying to meet the needs of their high-end, season-ticket holders, the Capital One club has been expanded and will include a new wine room and an existing bar will expand to the club's outdoor patio and include a fire fountain.
All 56 suites have been upgraded with new furniture, stadium styled seating and a newly designed private concourse entry was added. The Pelicans players will also benefit from the renovations, with a new spacious locker room. A new visitors' locker room also was built.
The renovations were part of a $50 million upgrade that happened in two phases.
The Louisiana legislature approved a capital bond issue of about $50 million to fund improvements to the Arena that was part of the team's new lease agreement approved in 2012 after Benson purchased the franchise from the NBA.
The ECHL Brass was the first professional hockey team to play in the $110 million New Orleans Arena, but they were bounced in 2002 when the Hornets came to town from Charlotte. The venue is also host to Tulane University's basketball team. The Hornets changed their name to the Pelicans in 2013.
All the teams were displaced in 2005 when Hurricane Katrina struck the city. While the arena was not as severely damaged as the Superdome, it did push the Pelicans out of town for the 2005 season.
The Pelicans played 35 of their 41 home games at the Ford Center in Oklahoma City. The others were played at the Pete Maravich Assembly Center at Louisiana State University.
League officials said the move was for the entire season so season tickets could be sold. Those were priced beginning at $999. Fans could buy 4,000 $10 tickets per game and 7,500 were priced at $20 or less.
On the road, the team was known as the New Orleans Pelicans. While in Oklahoma City the team was called the New Orleans/Oklahoma City Pelicans.
Oklahoma City offered the Pelicans incentives to play in their community. The deal included a $10 million revenue shortfall guarantee that was funded by the city, the Oklahoma Capital Investment Board and a private business partnership. If the team's revenue's exceeded $42.5 million, the city would share some of the profits. If it fell below $40 million, the subsidy became available. The $40 million target was 105 percent of the team's previous season's local earnings.
The state suspended sales taxes on game tickets. Team employees were subject to state income taxes.
In addition, the city spent $2 million on upgrades and operational expenses for the Ford Center. Local officials say the investment is worthwhile because it showed the rest of the world the city's progress.
In late 2007, the Pelicans extended their lease by two years, but the document also gives them the power to leave after the 2008-09 season if attendance targets aren’t met.
The deal gives the team and state a two-year window to measure the success of the team in the post-Katrina market while simultaneously relieving taxpayers of a potential $25 million obligation to the club.
It also places the onus of keeping the team largely on the shoulders of fans, who have been tepid in their support of the Pelicans this season despite the club's hot start.
The Pelicans can opt out of the agreement if the team fails to draw an average paid attendance of 14,735 for the final five months of this season and next season, a time period starting Dec. 1, 2007, and ending with the final game of the 2008-09 season.
The sample of games used to determine the final attendance benchmark will not include the seven games the Pelicans played this season in October and November. Officials didn't think it was fair to include games from those months because fans, at the time, weren't aware of the terms of the new deal.
Officials arrived at the figure of 14,735 because it equals the team's average attendance for the three seasons in New Orleans before Hurricane Katrina. The figure equates to roughly 86 percent of the 17,188 capacity the team goes by at New Orleans Arena. Playoff games will be excluded.
The Pelicans were encouraged by attendance at the nine games played in New Orleans during the two seasons when they were based in Oklahoma City. In 2005-06, they averaged 17,485 in the three games in New Orleans, and last season they averaged 17,129 in six games, including 18,535 on March 23 against the Lakers, the most fans to ever see a regular season game at the New Orleans Arena.
Opting out would be costly for the Pelicans. To move or sell the team, Shinn would be on the line for up to $100 million.
About $30 million of that would be penalties, reimbursements of past inducements from the state and relocation fees to move.
Owner George Shinn said one of the terms to the deal he struck with minority partner Gary Chouest, a Galliano businessman, when Chouest agreed to buy 25 percent interest in the team in 2007, was that Shinn would be forced to pay back Chouest's investment, about $62 million, if he sells or relocates the team.
Shinn said Chouest made it clear during ownership negotiations that he did not want to invest in a team that would not play in Louisiana. Shinn also said Chouest has plans to increase his stake in the club and that he will remain the only other partner in the ownership group.
Shinn also said he spent $10 million to return the team to New Orleans from its two-year displacement to Oklahoma City because of Hurricane Katrina.
The lease also relieves the state of its responsibility to construct a practice facility for the team. The Pelicans will continue to train in the Alario Center in Westwego, which is in the midst of an $8 million expansion.
Under the old deal, the state and city committed to build the team a state-of-the-art training facility. If built in downtown New Orleans near the New Orleans Arena, such a facility could cost as much as $25 million in post-Katrina construction market.
The deal requires the team to market itself to the "NBA's best standards and practices" and also provide daily economic reports to state officials and a third-party auditor. State officials said the Pelicans have been forthright and cooperative throughout the sometimes contentious negotiations. In what Jimmy Clarke, Gov. Kathleen Blanco’s chief of staff, called “an extraordinary” gesture, Shinn even provided the club's financial records to them.
Louisiana paid the $250,000 application fee to move the team from Charlotte, plus moving expenses and temporary office space costs up to $1.75 million. The state has also set up a $5 million contingency fund.
New Orleans beat out Charlotte, Louisville and the Norfolk/Hampton Roads area of Virginia for the team.
Before being sent packing, the Brass signed a 10-year lease at the venue and pays the greater of $300,000 or 10 percent of gross sales. The team got 40 percent of net concession sales and 60 percent of parking revenue. The team invested $1 million in ice making equipment. (Basketball, Facilities, NBA, Professional Sports, Venue)