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HOUSTON-Thanks to a resounding “yes” vote on Tuesday’s Houston-area ballots, the Houston Rockets and Comets will get to play in a new $175-million basketball arena to be built in burgeoning Downtown Houston.

In the final count, 65% of the area’s voters supported the construction, an abrupt about-face from last year’s defeat of a similar measure. Pro-arena supporters used a $2.5-million campaign to remind voters of the differences in the packages–parking and ticket taxes.

With a new arena, the Rockets will sign a lease to stay in Houston for 30 years after owner Leslie Alexander’s Compaq Center lease expires in November 2003. In addition, the Houston Aeros minor-league hockey team will call the new arena home, as well as any future National Hockey League team that may come to Houston.

The new arena will be the third erected in Houston within only a few years–at a rate never seen in the modern United States for major-league sports facilities outside of the Olympics. The arena no doubt will be touted as Houston forges ahead with its bid to be an Olympics host city.

Costs for all three stadiums–including the Astros’ Enron Field, completed this year, and the Texans’ under-construction Reliant Stadium for football–will total nearly $1 billion, with at least two-thirds of that coming from public money.

The Houston Sports Authority will issue bonds to finance the $175-million basketball arena. The bonds will be backed by a pledge of Houston’s existing hotel occupancy and car rental taxes, as well as Alexander’s $7-million annual rental payment.

Houston will buy the Downtown land. The sports authority will build and own the arena facility and $35-million parking garage, financed by an already secured private loan. The city will become owners of the arena and parking garage after the sport’s authority’s 30-year ground lease expires.

The city is responsible for acquiring and preparing the arena site for construction, with a total financial contribution to be capped at $20 million. In return, the city gets 5% from naming rights, a suite and 20 days per year to use the arena.

More intangible is the boost to Downtown redevelopment. After decades of stagnation, Houston’s Downtown scene has blossomed lately with the appearance of remodeled residential lofts, new high-rises and trendy restaurants and clubs. Much of the credit goes to the Astros’ move from the Astrodome on the outskirts of central Houston to the Downtown Enron Field.

It’s unclear what will happen to the Compaq Center, formerly called the Summit, after the basketball and hockey teams leave it behind, probably after the end of the 2002-2003 NBA season. Compaq Center is the NBA’s second-oldest and smallest venue and doesn’t contain enough luxury suites for today’s climate of bring-in-the-bucks basketball.

One possibility is that it could become a church. The expanding Lakewood Church, known through its own advertising efforts as an “Oasis of Love,” is interested in leasing the arena, which is located in a high-profile, freeway-fronted office district surrounded by residential neighborhoods between the Galleria and Downtown.

Any such plans, however, would have to pass muster with Crescent Real Estate Equities, which controls all nearby parking and the plant that supplies chilled water to the land-locked arena. Any Compaq Center deal would have to include renegotiated leases with Crescent, which has yet to comment on the issue.

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