What's next for PNC Arena upgrade after city, county approve financing plan
Posted May 10, 2024 1:16 p.m. EDT
Updated May 10, 2024 2:30 p.m. EDT
It's been months – an entire hockey season, even – since the Carolina Hurricanes announced they'd agreed to a 20-year lease extension at PNC Arena, as part of a funding plan for renovations, and a development plan around the building.
And it's going to be another year before the $300-million renovation project at PNC Arena even starts.
PNC Arena is home to the Hurricanes, NC State men's basketball and a slew of music concerts and other events.
The Wake County Board of Commissioners and the Raleigh City Council this week approved the use, term and timing of funding allocations to the Centennial Authority, which owns PNC Arena. The bodies had agreed to the top-line figures last August.
The county and city will provide the Authority $545 million, paid over the next 28 years, to finance the projected renovation project for the arena, which opened in 1999. That financing is expected to yield $300 million for construction, though interest rates could influence that.
The money, which is in addition to $9 million annual payments to the Centennial Authority from the city and county, comes from existing hotel occupancy and prepared food and beverage taxes.
The Authority recently hired and approved a contract for a new design firm to develop potential enhancements to be considered. But no individual projects have been approved.
The next step is reaching final terms on the lease agreement and the development plan.
The arena renovation term sheet, signed in August, calls for a 20-year lease extension to begin after this season. After the 2038-39 season, the parties will meet to discuss "the future of PNC Arena or a replacement arena."
It also calls for the Hurricanes to guarantee at least $4.5 million annually to the Authority beginning in the 2029-30 season. It also called for the construction of a 3,000- to 5,000-capacity indoor music venue adjacent to PNC Arena.
It was accompanied by a PNC Arena District Redevelopment term sheet that laid out a high-level agreement to give the Hurricanes' parent company the right to develop up to 80 acres of state land located around PNC Arena over 20 years.
Gale Force, the Hurricanes' parent company, would be able to develop 20 acres in each phase, provided the assessed value of the improvements exceeded $200 million each phase.
The term sheet included specific commitments on mixed-use development and parking spaces for NC State football games.
The agreements – from the city and county financing plan to the lease extension and renovation to the redevelopment plan – all work together.
Trying to write a document to account for 20 years of contingencies and possibilities is difficult, Centennial Authority board chairman Philip Isley said.
"Papering this is always the hard part and making sure it's right and making sure we thought through all these other issues from next year to 15 years from now," Isley said.
"We hope those will be done as soon as possible. This month, next month, we want it as early as we can get it," he said.
The lease extension, redevelopment agreement and renovation plans must be submitted to the city and county before the first funds are released. The Centennial Authority will be able to borrow $100 million as soon as July 1 and can borrow another $200 million as soon as July 1, 2026. The Centennial Authority said it may seek funding in September or October,
A recent economic impact study commissioned by the Centennial Authority found that PNC Arena attracted more than 1.5 million attendees and generated $590 million in economic impact during the 2022-23 season.
The Centennial Authority board consists of 21 members appointed by state lawmakers, Wake County, Raleigh and Wake County mayors as well as the chancellor of NC State.
