Ground-breaking on $160 million Pepsi Center may come in October
DENVER (AP) _ Calling it the end of three-year odyssey, the city and Ascent Entertainment Group announced an agreement Tuesday to build the $165 million Pepsi Center _ a deal that would keep the Denver Nuggets and the Colorado Avalanche in Denver for another 25 years.
Ascent, which owns the Nuggets and the Avalanche, and the city have been trying to hammer out an arena deal since 1994. The city wanted a say on where the arena would be built. Ascent didn’t want Denver to meddle too much.
Talks, often contentious or stalled, have centered on keeping the Nuggets and Avalanche in Denver _ and not in the suburbs or out of state.
``And that’s a difficult thing to do in an era when teams move from city to city,″ said attorney Thomas Razonetti, who helped the city and Ascent reach an acceptable agreement.
Under the new deal, scheduled to be finalized Wednesday, the city will get up to $17 million in sales tax over the next 25 years.
Mayor Wellington Webb said the deal compares favorably to others around the country and said it will be good for Denver because it will bring more jobs, more tourism and more tax dollars.
It also will keep the city at the forefront of professional sports and, more importantly, will keep both of Ascent’s teams in Denver through the next century, said Webb.
``It’s at the top. It’s not the best. It’s not bad,″ he said of the long-awaited agreement.
For its part, Ascent will own, operate and maintain the Pepsi Center, which it will build on 50 acres in the city’s booming Central Platte Valley.
The 675,000-square-foot arena will have approximately 19,000 seats, 95 luxury suites, 1,850 club seats and a 250-seat restaurant.
Ascent also has been guaranteed tax breaks, including a $2.25 million rebate once the arena is completed, and $4.5 million in city funds to help upgrade surrounding streets and infrastructure.
A sticking point during negotiations had been what the city will lose in revenue because the Pepsi Center, a private structure, will replace the publicly owned McNichols Arena, where Denver charges a seat tax. McNichols currently brings in about $3.7 million a year in seat taxes.
Under the new deal, Ascent will pay the city a minimum of $1 million per year in sales taxes for the first five years because the company will not pay seat taxes at the Pepsi Center. For its part, the city will decide whether to keep McNichols for other sporting events or demolish it.
If the city decides to get rid of the sports complex, Ascent has agreed to pay for its demolition.
Meanwhile, Charlie Lyons, Ascent’s chairman and chief executive, refused to speculate on whether the deal will mean Avalanche captain Joe Sakic will remain in Denver or accept an offer from the New York Rangers that includes a $15 million signing bonus.
Speculation has been that a lucrative arena deal with the city could give Ascent the money it needs to match the Rangers’ offer.
``We have until (Wednesday) at 6 p.m. to make a decision,″ Lyons said. ``Stay tuned.″
Lyons said Ascent would begin seeking financing to build the Pepsi Center as soon as the agreement is finalized. Ground could be broken in October.
The arena is slated to open during the 1999-2000 season, two years behind the original timetable.