GlobeSt.com UPDATE: Deal Near on New Magic Arena

The deal will involve a compromise on the amount of money Magic owner Rich DeVos wants from city, county and state coffers.

The billionaire owner is asking $122 million from the tourist tax fund; $50 million from the city of Orlando; and $29 million from the state. That's 80% of the estimated $250 million arena development cost. DeVos would kick in $10 million cash and contribute $40 million from arena-related revenue.

If he doesn't get a new Downtown arena, he will move the team to another city, DeVos has indicated but not spelled out specifically to date. The team is losing $12 million a year, he says.

Team officials and hoteliers are meeting informally. They have agreed to hold back making a firm and final decision until Sept. 1.

But the hoteliers remain unconvinced the Magic is losing $12 million a year. They sense that a new arena could be constructed for an estimated $150 million.

Some hoteliers feel the 11-year-old, $110 million, 17,028-seat, 350,000-sf TD Waterhouse Center, the Magic's current home, could be renovated and satisfy Magic owner demands for $75 million.

But DeVos wants no part of a renovated arena. Still, brokerage sources close to the controversy tell GlobeSt.com the renovation idea may still be a viable option despite DeVos' protestations.

Magic executives are trying to convince the innkeepers that a hefty portion of the $120 million they take in annually from tourist sales taxes should go to the construction of a new 18,500-seat, 450,000-sf basketball court for the 11-year-old National Basketball Association team.

For their rationale, Magic execs point to the $1 billion, four million-gross-sf Orange County Convention Center, largely built with tourist tax funds. They argue the convention center is not purely tourist-oriented but still gets the bulk of the tourist-tax money.

Hoteliers dismiss that argument. They contend the basketball court and the Magic are not tourist-related; do not bring tourists to Orlando; and so don't qualify for any of the tourist tax funds.

Hoteliers argue the convention center has been attracting tourists and corporate visitors to the city in volume for the last 15 years. They maintain the bulk of the tourist tax money is already committed to the $750 million, fourth-phase, 1.2 million sf, exhibition hall expansion nearing completion at the center.

Confident their numbers will stand up to any audit, Magic executives for the first time are allowing hotel industry representatives to check their books; comb their immediate revenue needs and projections; and review their numbers on the construction of a new arena.

Among the hoteliers investigating the Magic's books is Harris Rosen, the Brooklyn, NY-born, former Disney executive who rose in 15 years to become the largest independent hotel operator in Florida. Rosen is a legend in the industry for using a scalpel in shaving construction/development costs.

Rosen couldn't be reached at GlobeSt.com's publication deadline. But an Orlando associate who has worked with him on numerous hotel developments tells GlobeSt.com on condition of anonymity, "Rosen will find the fat in the Magic numbers bowl, cut them out and won't be shy about letting the public know what he found."