Hurricanes lease, development agreement offer PNC Arena area chance to 'come to life' ::

Hurricanes lease, development agreement offer PNC Arena area chance to ‘come to life’ ::

Philip Isley, chairman of the Centennial Authority, choked up as he tried to put the events of the day into perspective.

The board, which owns PNC Arena, had just voted Thursday to approve a 20-year lease extension and an 80-acre development agreement with the Carolina Hurricanes, a pair of deals expected to radically alter west Raleigh and kick off a $300-million renovation of the arena.

And here was Isley – having navigated this broad deal through a series of delays and various government agencies and tough negotiations with the arena’s key tenants – fighting back tears, a lump firmly in his throat.

“This is a historic day for all of us,” said Isley, a Raleigh lawyer and lobbyist and former city council member. “Historic day for the city, for the county, for the state of North Carolina, for our region.”

Isley and the 21-member board, filled with titans of industry from Raleigh and across the region, met for more than 90 minutes in closed session Thursday morning to go over the documents. It then voted unanimously to approve both deals. The documents will be made public as soon as they are signed by both parties.

“This is the largest economic development project in the history of our city,” Raleigh Mayor Mary-Ann Baldwin said. “So we’re expecting great things. I don’t think you’re going to recognize this area five years from now, 10 years from now. It’s going to come to life.”

The Hurricanes and the Authority announced non-binding term sheets on the lease extension and development plan in August. They were contingent upon funding from Raleigh and Wake County for a $300-million renovation of PNC Arena.

It’s taken nearly a year to get finalized contracts completed. The city and county gave final approval to the renovation funding plan in May.

“The expansion of our dynamic sports and entertainment offerings beyond the walls of the arena will provide fans with a world-class experience,” Hurricanes owner Tom Dundon said in a statement. “This long-term initiative will help drive sustained growth in our community.”

Development around PNC Arena was part of the original plan for the building, which opened in 1999. But it’s been 25 years of false starts.

Until now.

Dallas-based Pacific Elm Properties, majority owned by Dundon Capital Partners, will lead development of the mixed-use district, to be build in phases. The first phase will include a 4,300-seat ballroom, operated by Live Nation, for musical acts and other entertainment.

The first phase, consisting of 20 acres located in current parking lots to the sides of the front of the arena, will also include 200,000 square feet of entertainment and retail, more than 500 apartments, and 150,000 square feet of office space. It is expected to be complete by 2030.

“It becomes a destination,” Baldwin said. “They have places to eat, places to drink, places to hang out. I know sports betting is going to be part of it as well. Not my jam, but you know, it’s is a lot of other people’s. I think that the transformation is going to be remarkable, plus putting $300 million into the arena will transform it.”

Baldwin said the housing aspect of the plan is most exciting. Ten percent of the units of multi-family rental housing required in the first phase of development must be at no more than 80% of the Raleigh area’s median income.

“It’s empty parking lots most of the day and most of the year,” she said.

The parking lots are used for tailgating for NC State football games at Carter-Finley Stadium as well as Hurricanes and Wolfpack basketball games. It is an area that was addressed in the term sheets with the development replacing nearly all of the parking spots lost.

The Hurricanes said, in their statement, “a dedicated tailgating area will provide one of the most unique game day experiences in sports.”

WRAL Sports Sunday

Said Isley: “This tailgate zone that our term sheets contemplated, we’ve seen some early iterations of that. It’s going to blow peoples’ minds. You’ve got a little bit for NC State, a little bit for the public at-large. But the thing that we’re trying to do here is bring a feel and an experience that is nowhere in North America.”

Under the lease term sheet, the Hurricanes’ lease is extended by 20 years after the 2023-24 season, which ended with a playoff loss to the New York Rangers.

The team can’t relocate from PNC Arena or terminate the lease, except after the 2038-39 season if the Authority doesn’t make agreed-upon improvements at that point. After that season, the Hurricanes and the Authority will meet to discuss the future of the arena or a replacement arena.

“In the next five to 10 years this place is not going to look like it looks today,” Isley said. “This building is going to be refreshed for at least the next 20 years. And then we’ll have another hard decision to make.

“Do we still stay in here? Or do we use the 20 acres that are still going to be left over and put a new arena there and then utilize this spot for filling in the last part of the development.”

Potential enhancement projects for the arena could be made public in July or August with the Authority seeking permission for bonding authority in the fall. Renovations are set to begin in the summer of 2025 and the entire project may not be completed until 2027 or 2028.

By then, some of the development around the arena may be nearing completion as well.

The Centennial Authority board members are appointed by state lawmakers, Wake County, Raleigh and Wake County mayors. The chancellor of NC State is also a member.

Isley, who moved to the area in 1992, was appointed chairman of the authority in late 2021. It is an unpaid position and one that required far more work than he anticipated.

“There have been times where I was like, ‘Oh, this may not happen.’ And it’ll be my fault,” Isley said. “So I don’t want that to happen, either. Everybody came together. And we have an incredible opportunity here.

“… It’s the coolest thing I’ve ever been a part of in my entire life. i I never in a million years thought I would be doing something like this, as impactful as it may be for this area.”