Proposed $310M Arena Inches a Step Closer to Reality

The panel, headed by Patrick Hobbs, dean of the Seton Hall University Law School, concluded that, in his words, the project would provide a "significant economic contribution" to the city. The group also determined that it would spur further development around it.

Indeed, that's the goal of the project. The arena, which would be the home of the NHL's New Jersey Devils, is part of the initial phase of the makeover of 24 acres within this city's Downtown core. The arena itself would be ready for the 2007 hockey season, and the rest of phase one would be built out a year later. The plan calls for a half-million sf of new office space, 150,000 sf of retail space, a 300-room hotel, a community center and parking for close to 4,000 cars.

The cost of the arena has been pegged at $310 million, with the city paying about two-thirds of that, mostly from revenues generated by the seaport rent it receives from the Port Authority of NY/NJ. The Devils would contribute $100 million. The first phase of the larger redevelopment, including the arena, is expected to generate close to $600 million worth of investment.

The pending deal calls for the Devils to pay $2 million a year for 30 years to lease the city-owned venue. The city would also derive 7% of the money generated by the sale of luxury suites within the arena, plus concession and related revenues. The city would also get a similar share of money that might be paid for naming rights.

The panel did attach several advisory "strings" to its positive recommendation. Chief among them is the suggestion that an oversight commission be appointed to monitor the ongoing development. The group also said that the final deal should have the necessary assurances and penalties to enforce the agreement.

The next step is for both sides to finalize a contract and submit it to the city council for final approval. According to city administrator Richard Monteilh, a contract could be in front of the council by the end of next month.