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ORLANDO-It all came down to money and Orange County just doesn’t have enough of the green stuff right now to shell out for a $250-million National Basketball Association-caliber arena for the Orlando Magic.

Instead, the team and county officials are meeting this week to set up a schedule and a pro forma for the estimated $75-million renovation of the 12-year-old, 17,250-seat, 395,000-sf TD Waterhouse Centre.

Those renovation talks could become strident since the team insists it will not agree to play its 2002 season at any of the smaller nearby courts, county planners following the controversy tell GlobeSt.com on condition of anonymity. The Magic wants to play at the existing arena while the renovations are underway.

“It’s a losing battle for the Magic on this not-leaving-the-arena argument, as it has been in their power play to get this $250-million arena built from hotel room tax proceeds,” a local hotel executive tells GlobeSt.com on condition of anonymity.

He initially favored giving the team some of the hotel tax money but now agrees with an Orlando Sentinel poll showing 90% of residents interviewed object to a publicly-financed arena for a privately owned corporation.

“Nobody wants to spring for a $250-million mansion to house a .500 team,” writes Sentinel sports columnist Mike Bianchi, in reference to the Magic’s 2001 season record.

The new finance development in the year-long controversy comes as Orange County comptroller Martha Haynie shows in a preliminary audit of current and projected hotel tax revenue that the county may have only $79 million available for sports facilities in the next five years. That’s $42 million less than the Magic initially wanted the county to kick in for the $250 million arena.

Of the estimated $79 million that might be available, County chairman Rich Crotty prefers giving the Magic only $35 million and spending the balance on other non-sports projects.

“It’s definitely a kick in the pants for (Magic owner) Rich DeVos who wanted the county, city and state to pay 80% of the $250 million estimated cost,” a real estate lawyer not associated with the controversy tells GlobeSt.com on condition of anonymity.

Meanwhile, the estimated $75 million in renovation costs is in line with numbers that hotelier Harris Rosen cited in an exclusive interview with GlobeSt.com June 4. Rosen had suggested a privately formed local investment cartel could buy the Magic; pay off DeVos on what he and his family have put into the franchise to date; retrofit the existing arena; then sell it as a franchised asset.

Money to start the retrofitting job would come from the state where $30 million is already allotted. “That fund is growing by about $2 million a year,” Rosen tells GlobeSt.com.

While the new construction work is going on, the hotelier suggests renaming the arena for a $2-million annual fee on a 20-year contract. “That will give you $40 million,” points out Rosen. “Take that contract to any bank or lender who will discount it at $20 million to $25 million.”

With the $30 million-plus coming in from the state, the estimated $25 million from the arena re-naming fee brings the funding pot up to about $55 million. The remaining $10 million or $15 million needed will come from selling the team as a franchised asset.

“You don’t have to tap into the tourist tax fund and you don’t have to add a special tax to the ticket price,” Rosen says. “Instead, you take 4% off the ticket price and the total revenue from ticket sales will be at least $15 million, enough to do the job.”

Magic officials contend the leanest renovation can’t be done for under $145 million; a deluxe job would come in at $200 million. DeVos and his executives initially balked at any renovation suggestion and said they would contribute no more than 4% cash and 16% from an increased tax on ticket sales.

DeVos so far is not saying how much more the team will now contribute to a renovation. Mayor Glenda Hood, too, is not disclosing if the city will go higher than the $50 million DeVos wanted Orlando to contribute.

The billionaire co-founder of Ada, MI-based Amway Corp., wants public money to fund the bulk of a modern sports palace to stem the $40 million in losses he says the team has suffered over the past four seasons. The Charlotte Hornets used the same argument in unsuccessfully trying to win public support for a new arena in North Carolina.

In previously published accounts, Magic officials say they lost $2.2 million in 1996-97; $6.4 million in 1997-98; $13.98 million in 1998-99; and $15.13 million in 1999-2000. That’s $37.71 over four years or an average annual loss of $9.43 million.

Magic executives hinted in previous discussions with the city and county they would be willing to sign a 25-year lease at a new arena. Now they may be talking a 10-year lease or less. The Magic’s 10-year lease at TD Waterhouse Centre expires in 2004. The team pays the city $7,500 per-game rent. The Magic and the city take in about $1 million annually from concessions, according to previously published figures from the city.

The proposed $250-million arena would be 648,000 gross sf versus the existing 395,000 sf; have 17,905 seats versus 17,250; 39 corporate party suites; a 1,200-car garage; a restaurant of undetermined size; two food courts; and two bars/lounges.

A slow national economy is curbing the volume of tourists and travelers who normally fill Orlando’s 125,000 hotel/motel rooms at this time, according to research by the Orlando/Orange County Convention and Visitors Bureau. The resulting drop in current and project hotel room taxes caused county officials this week to discard the $250-million arena proposal.

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