PORTLAND ? Negotiations on a new lease agreement between the Portland Pirates and Cumberland County Civic Center trustees has reached a pivotal moment, leaving many to wonder if the AHL franchise days are numbered in the city of Portland.
Pirates Managing Owner and CEO Brian Petrovek said that he?s running out of time in order to complete a new lease agreement with county trustees.
Petrovek, who said he?s scheduled to meet with trustees on Thursday, is hoping that a deal can be completed in the next few days because the team has yet to begin selling season tickets, or dealing with corporate sponsors for next season.
?We?re in a window where we should be selling season tickets for next season,? said Petrovek. ?We?re under the gun right now because long term we have no lease, and in short term we have no commitment from season tickets holders, no deposits on seats and we?re not generating any cash. That?s a big challenge today let alone the challenge of having no lease to communicate with our longer term partners, sponsors or otherwise about the future.?
?We?ve got to figure this out and I?m hoping we can do that in the next couple of days, because we are down to days. We were expecting to be in a much different place weeks ago, if not months ago and we?re not.?
The current lease agreement, a one-year extension signed last spring, is set to expire on April 30, opening debate about whether the Pirates could relocate to another city. It?s not the first time that there has been relocation talk regarding the Pirates, who were on the verge of moving to Worcester, Massachusetts in 2005, and again in 2010 when the team explored a move to Albany, New York as leverage toward a new five-year lease.
While not completely ruling it out, Petrovek said this time was different because of the current renovation that?s taking place at the Civic Center, but he needs to have new lease completed soon.
?(Relocation) is the last thing we want to do. It?s not the reason why we bought the team. We?ve been here for 13 years waiting for the building to be renovated. We knew when we bought the team it was outdated, but we worked toward a solution, and now that we have one, the last thing we want to do is consider relocation.?
?I agreed to extend the lease for one year on the basis of having a deal last fall, and I don?t have one and I?ve run out of time,? said Petrovek. I need to have a deal. I don?t want to go elsewhere and I don?t really want to consider other options.?
The Civic Center is currently undergoing a 33-million dollar renovation that was approved by voters in Nov. 2011. With Phase I nearly complete, it was expected that the arena would be closed for Phase II of the project following the completion of the Pirates? regular season on April 22, and a belief among some trustees that the Pirates would play its playoff games elsewhere, namely at the Androscoggin Bank Colisee in Lewiston, where they played six regular season games this season.
Although Lewiston was considered a success, selling out five of the six games, the Pirates decided to play its playoff games in Portland for player development and financial reasons as the Colisee only holds 3,650 compared to the Civic Center?s capacity of 6,733.
Despite the team?s recent slide in the standings, it?s still likely Portland will still make the postseason, which will push the start date of Phase II of the renovation into late May or June, delaying the opening of the building into the next hockey season.
It?s that opening date that?s has both sides at odds with each other as Cianbro, the construction company in charge of the Civic Center renovation, revealed during a building committee meeting last week that the opening would be delayed until Jan. 22, 2014, pushing the Pirates out of the arena for nearly two-thirds of its season.
?The Pirates are still under lease for the remaining of this season including the playoffs. They chose to play at the Civic Center,? said Neal Pratt, Chairman of the Civic Center Trustees. ?The April 22nd start date was based on the assumption that the Pirates would be playing its playoff games elsewhere, or they wouldn?t have made the playoffs. Now with the prospects that they?ll make the playoffs and they will be playing at the Civic Center everything will be pushed back.?
It?s that sentiment that left Petrovek aggravated with the trustees.
?We had an option in our lease to play our playoff games (in Portland) and we made a decision in the best interest of player development and our business to do that,? said Petrovek. ?It was our right and frankly, I?m getting a little frustrated by those who think it?s our fault. I didn?t set the schedule for the renovation. I wasn?t asked about it. But, we?ve all got to work around it and there are those who think it?s our fault because the building won?t open til Jan. 22, 2014 and I?m having a difficult time accepting that.?
Petrovek believed that the two month delay would only apply should the Pirates make the Calder Cup finals, and was prepared to play the first several weeks of the regular season next season on the road and at Lewiston, but was taken by surprise to learn that the delay would happen even if the Pirates played one round at the Civic Center.
?We originally knew it could be a delayed start into the fall, two months as most, and we were comfortable with the two month window, but to get news from (Cianbro) and hear them utter the words January. It was the first time we?d heard about it, so it created a much difficult situation we have to deal with.?
The first round of the American Hockey League playoffs is a best-of-five with the higher seed choosing whether they want to start at home or at the road. The Pirates are currently fifth of eight teams in the Eastern Conference that would make the playoffs if they were to begin today.
With the lower seed potentially only playing two home games, Petrovek questions why Cianbro couldn?t begin construction around the building until the first round is complete.
?Why couldn?t the construction start around us,? Petrovek questioned. ?There have been many buildings that have undergone renovations where the team continued to play while the work was on going. I never understood why it was a two month delay if we played just two home games (in Portland).?
Pratt said that the delay was because of Cianbro?s need to prepare the construction site, moving in equipment, including a large crane, and shutting down a section of Spring St. to traffic.
?The two to three months delay is mainly because when you?re hiring all the various subcontractors and planning the scheduling all of the contractors doing the work, they just can?t essentially sit idle until the playoff schedule is complete. It?s a time consuming process and takes time to put all the pieces in place.?
Besides the complexity of the renovation, both sides simply coming to an agreement on how to approach the issues have proven to be a challenge. The Pirates are of the belief that the financial data to complete a lease is available and that a long-term lease should have been done months ago, while the trustees have opted for a more methodical approach due to the 33-million dollar bond which voters approved in Nov. 2011.
The issues are more complicated because of the renovation,? said Pratt. ?Everything impacts the next item so it?s about coming with that logical solution to all of the issues because the Civic Center is responsible for paying the bond. We have to take very seriously our financial needs so that we can repay the obligation to the renovation. That something we?re very much focused on.?
Petrovek?s main contention is that the county trustees shouldn?t be waiting for the building to opening before selling naming rights to the arena, or be in the process of selling both club seats and corporate suites. He believes that process should complete or well-underway by now.
?There are experts in the industry that can make logical, intelligent conservative assumptions about what this building will generate when it?s complete,? said Petrovek. You can?t wait for the building to open because it?s too late to run business like that. We disagree vehemently in that regard and we?ve been getting ?there are a lot of things we don?t know?. Well go find them out. We should have a naming rights partner already sold for the building. We should have had it done before the final drawings were complete. It?s nonsense on their part.?
?There is no reason why we can?t get something done. We keep exchanging ideas and doing analysis and it?s never ending. It?s got to stop because we?re running out of time.
Petrovek said he can?t understand why the trustees are hard-pressed to want to have a long-term lease with the Pirates as it guarantees the Civic Center income, noting that they now have a debt service on the renovation bond.
?They should want a long term deal,? he said. ?They have debt to pay. When you have a long term anchor tenant you have contractual income coming in all the time in order to pay down the debt service. We?ve seen how well long-term deals work in the city of Portland with the Sea Dogs. It?s a perfect example of a long-term relationship that guarantees a landlord getting paid over a long period of time.?
According to Pratt, the trustees are not against a long-term lease and that its part of the natural discussion toward reaching a potential resolution.
?We are looking at all aspects of the relationships and exploring various options,? he said. ?That?s been part of the discussion as to what makes sense. The length of the lease has been part of that discussion and what the financial implication would be on both the Civic Center and the Pirates in any deal.?
Source: http://mainehockeyjournal.com/2013/03/28/pirates-civic-center-at-a-stalemate-in-lease-negotiations/
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Public release date: 28-Mar-2013
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