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Canes, Centennial Authority Face Off Over RBC Lease

Posted December 19, 2007

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— Negotiations between the Carolina Hurricanes and the state authority that owns the RBC Center over an extension of the team's lease at the arena are on thin ice.

The Canes are seeking an immediate reduction of their annual rent at the arena from $3 million to $2 million in exchange for adding five years to their lease agreement. The current lease runs through 2019.

"We've asked for assistance. It's fallen on deaf ears. We continue to negotiate, but it really hasn't happened yet," said Dave Olsen, vice president and general manager of Gale Force Holdings, the management team for the Canes and operators of the RBC Center.

Aside from the Canes' Stanley Cup season two years ago, Gale Force has lost money every year since moving to North Carolina in 1997, Olsen said.

Mike Amendola, the Canes' chief financial officer, said the hockey team lost between $4 million and $5 million last season. The team made between $5 million and $10 million the year they won the Stanley Cup, he said.

Olsen said Gale Force lost an additional $1.8 million last year on arena operations, putting Canes' owner Peter Karmanos' total losses for the year at more than $6 million.

"Our insurance since 9/11 and utility costs since 9/11 have gone up substantially. We continue to run the building at a deficit," Olsen said.

Annual utility bills at the RBC Center, for example, have jumped from abut $1 million to $2.7 million, he said.

"You have to sell a lot of sodas, a lot of beers, a lot of hot dogs, a lot of parking to cover those costs. We just can't get there," he said.

The Centennial Authority recently pledged $47 million in improvements at the RBC Center, including a new sound system and vending machines that accept credit cards. The authority would use its own revenue, hotel and meal taxes from Raleigh and Wake County and money from North Carolina State University, which also uses the arena, to pay for the upgrades.

"Anything you take away from the rent is obviously taking away from improvements that we can do to the building," authority member Reef Ivey said.

The five-year lease extension was initially part of the agreement for the arena improvements, Ivey said. But the authority struck that provision after Gale Force balked, he said, and chose to negotiate the extension separately while proceeding with the improvements.

"We're willing to make the building what the Hurricanes think it needs to be. But in order to do this, (they) have to tell us that (they're) going to be here ... over period of time so that we can recoup our investment," Ivey said.

Gale Force also would like to recoup something on its hockey and arena operations, Olsen said.

"When you're the only entity in a three-party agreement that continually loses money, you have to take a look at that, and you have to look at other partners and wonder why is that," he said.

If the Canes were to pack up their sticks and pucks and leave in 2019 – there's a hefty penalty for breaking their lease earlier – the arena deficit would likely more than double and area taxpayers would have to foot the bill, he said.

"We are a valuable commodity," Olsen said. "We're not taking advantage of that. We just want what's fair, not only as a tenant but as a party in this three-sided agreement."

Both sides said they expect to reach some sort of agreement eventually on the lease extension and the rent payments.

"There's nobody looking, certainly in our organization, that we're leaving here or want to leave here. But the business has to work," Olsen said.

"We don't want them to leave, and this is just kind of a normal negotiation between a landlord and a tenant," Ivey said.


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  • JBunny Dec 20, 2007

    I really, really, really hope that the Canes won't leave the RBC Centre or the Triangle...

    Because then I'll have to travel back home to see my beloved Bruins play... DECEMBER 28TH - here @ RBC.

    Yes, I am a hockey fan and YES, I'll pay upwards of $150/seat for the two times a year my team is down here. And you know what? The Canes fans always have a great time - even when I'm in their section. :0) GO NHL!!!

  • oceanchild71 Dec 20, 2007


    We were there at that game until, what was it 1:00 in the morning when Detroit finally scored. What a game! But the best chill-bump-producing-memory was when we won the cup. When Justin Williams scored the empty-netter it hit me then that we were actually going to win it. Ahhh, what a night! GO CANES!

  • oceanchild71 Dec 20, 2007

    The NHL hurts its own self with their idiotic TV blackouts. For example, if the Canes are playing in Philly and our team is not doing a broadcast with John and Tripp, then they block the Philly broadcast in Raleigh! This does not make sense as it is not very likely that people in Raleigh would make the trip to Philly. I see this as a major stumbling block into opening the NHL to more people. If you can't watch your team when it is playing away and it is being broadcast (on satellite), then a lot of people will lose interest.

    That being said, the Centennial Authority would be very short-sighted to not make the deal. There is no way they could find enough events to make up for a Canes season.

  • bubbba Dec 20, 2007

    Aside from winning the Cup on 06. Does anyone remember when the Canes where playing the Wings and it went to triple overtime. NO ONE LEFT THEIR SEATS! That was the year the refs said Raleigh has the loudest fans in the league.
    This southern boy still gets chills thinking about the game.
    If you dont like hockey, thats fine. We wont miss you at the games.

  • bubbba Dec 20, 2007

    "The NHL sucks now, I wish hockey was like it used to be.... I had season tickets to the Canes since they came down from Hartford, but quit buying tickets 2-3 years ago because the product blows overall."

    Hey genius, 2 years ago the Canes won the Stanley Cup.

  • ma2345 Dec 20, 2007

    Canes have been in Raleigh for 6, 7 years now and have already won a Stanley Cup. The local economy has enjoyed trememdous national exposure. Hey I am born and raised here and sometimes I wonder when I travel around the country and hear people say
    "southerners have the lowest IQ in the country". Maybe they are right.

  • BIGCHEESECAMATO Dec 20, 2007

    if you dont like it ..GET OUT OF TOWN CANES......Have a nice Christmas....

  • mjjunk Dec 20, 2007

    rlewis -

    I guess it is similar to what a friend of mine described as "jumping on the bed". People who "jump on the bed" like to say: "your bed is going to break... see ..." and they proceed to jump on the bed until, guess what... it collapses. The only thing that this does is prove themselves right. Had they not jumped on the bed in the first place, you would still have a perfectly good bed. But no, they could not let it alone, they had to break it just to say they were right.

  • 2 Dec 20, 2007

    I am noticing a trend here... all the ignorant comments are coming from pro-unc fans. Wow, that is weird...

  • rlewis Dec 20, 2007

    Well said, MJ.

    I think some people just feel somehow threatened by something that they don't like (or don't keep up with). It's like they're worried that they'll be on the outside of something if it were to gain popularity. Why else would someone bother badmouthing?