Overview
In 2016, The City of Phoenix issued a Request for Proposals (RFP) to hire a firm to evaluate options for a new Phoenix arena, as well as evaluate renovation options for Footprint Center. CAA ICON was chosen to complete the work and our team engaged with the City to examine various options for a Phoenix arena.
Approach
The scope included (but was not limited to) the following Feasibility and Planning and Strategic Advisory Services:
Market Demand Analysis – Determined the market demand and appropriate facility characteristics for a new or renovated arena through a detailed assessment of local and regional market characteristics, demographics and benchmarking.
Financial Feasibility Analysis – Created a baseline operating and financial profile for both a new and renovated arena, including detailed operating revenues and expenses. This phase included comparing the estimated net cash flow to be generated under each scenario versus the existing situation at Footprint Center to understand the potential impact on the team and facility.
Deal Structure/Lease Analysis – Developed detailed case studies, including sources/uses of funds, lease summaries, etc., for comparable NBA arena transactions. Prepared a comprehensive review and evaluation of NBA arena deal structures and leases.
Negotiating Advisory – Dan Barrett supported City staff in structuring their deal with the Suns. CAA ICON also provided support to the legal team in drafting definitive documents.
Result
Based on CAA ICON’s findings, the City of Phoenix and the Phoenix Suns agreed on a $235 million renovation deal to Footprint Center. The City is contributing $150 million to the project, while the team will fund the balance and also build a new practice facility for approximately $45-50 million. The deal also keeps the Suns as tenants at Footprint Center until at least 2037.
