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21
Oct

Arena lease with UNL contains few surprises

Construction of Lincoln's new arena is underway just west of the Haymarket District.


It was front-page news today in the Journal Star: On Monday, the City Council will vote on a 30-year lease with UNL for the arena. But the lease looks pretty much like the “memorandum of understanding” that the city and UNL signed off on last year.

During the arena groundbreaking, it was somewhat alarming to see Nebraska Athletic Director and the UNL mascot missing, and even more alarming to learn the city and UNL had not yet signed a lease. So now, here it is, and it is the same deal we were told it would be before the election.

The upshot? UNL basically gets to have its men and women basketball teams play in the arena for about nothing. Sure, UNL is supposed to pay $750,000 in rent, but they get so many credits that arena program manager Dan Marvin told me long ago that it’s basically a wash for them. The credits are all turnback sales tax receipts the city receives from the sale of basketball tickets (70 percent of the state sales tax), the first dollar of all ticket surcharges on basketball tickets and $300,000 for UNL’s lost concessions revenues.

No news there.

Other nuggets in the lease include: (11164a)

• Just in case you didn’t pick up on this during the campaign, UNL “shall have no responsibility or liability for repayment of the bonds” that were sold to finance the $340 million project. “Except as otherwise expressly provided in this Agreement, the Parties recognize and agree that any Arena components or services identified in this Agreement shall be at the City’s sole cost and expense.” So no matter what, even if we slip into the second Great Depression, repayment is the city’s responsibility, not UNL’s.

• The lease says “although plans and specifications for the arena have not been completed” (really?), “there are certain components of the Arena and the Basketball Space required in order satisfy the needs of UNL.” In other words, they’re gonna build it the way UNL likes it — right down to promising to re-seal the basketball floor every summer and repainting it every five years.

• There will be a minimum of 2,000 student seats — with the location determined by a design working group comprised of city and UNL representatives — and a portion devoted to risers for students to stand on, if UNL wants them. And the risers will belong to UNL — if another event wants to use them, they’ll have to rent them from UNL.

• As expected, alcohol will not be served in the arena during UNL events. But check out this little nugget in the lease: “The city agrees to renegotiate the make-whole provision for concessions in the event UNL eliminates or modifies its restrictions on the sale of alcohol at Home Games and other UNL events held in the Arena.”

• UNL retains all gross income and revenues from sale of merchandise, UNL suites, club and floor seating, UNL ticket sales, naming rights, signage and broadcast rights or other intangible rights in connection with signage and ribbon boards and scoreboards.

• In addition to using the arena for 30 home games per basketball season (15 men’s, 15 women’s), UNL may schedule use of the arena for up to 15 non-basketball events per year (such as commencement ceremonies) without paying additional rent.

• UNL promises to try not to schedule games during state high school volleyball, basketball and wrestling tournaments.

• Somewhere on the exterior of the arena, there will be a big, fat (presumably red) “N” — in an “appropriate location mutually acceptable to the city and UNL.”

• The city intends to charge a $1 surcharge on all event tickets, but may increase that up to $3 if the money is needed.

• The city will have the right to selling naming rights for the arena, and UNL will sell naming rights for the basketball court, locker rooms and other UNL spaces.

• If the city fails to get the arena built in time for the 2013 basketball season, the city will have to pay UNL $100,000 for each of the first two games delayed, $200,000 for each game after. In addition, the city would have to provide UNL the use of Pershing Auditorium free of charge for any women’s basketball game that must be relocated or rescheduled because of the construction delay.

• No “adult-oriented” nor political advertising will be allowed during UNL events (TransCanada, we’re lookin at you) and any casino, alcohol and tobacco ads can only be digital, so they can be removed for UNL events.