Fort Smith student group proposes $450 million downtown sports arena

by The City Wire staff ( 24 views 

A group of 2014 graduates of Fort Smith's Union Christian Academy presented a dream Wednesday (July 9) that they admit is big, but believe is a possible if the community rallies together.

The students told a group gathered at the Golden Corral about their vision to build a $450 million sports arena in downtown Fort Smith that would house a community-owned franchise of the National Hockey League. Superintendent Paul Bridges of UCA told the small group of residents that the students' dream came about as part of a project in a leadership course taken during their recently-concluded senior year at the school.

"Our leadership class worked on a project for (City Administrator) Ray Gosack and it was what problems are out there that the city has that our students could work on. Well, what they worked on was the question, 'How do we get young people more involved in local government?'"

The group came to "some good conclusions," Bridges said, but out of that came the dream to build an arena and locate a hockey team in the city as a way to "radically change" Fort Smith and hopefully attract young people to the city and bring back other young adults who may have left the area to attend college.

Student Brock Smith said the goal for the group is to set the bar high and become an example that other cities follow. He said Fort Smith can do that by becoming the first city in Arkansas to host a major league sports franchise. The students proposed following the example of Green Bay, Wis., and how the city's NFL franchise is community-owned, the only in the league to be structured in such a way. They also pointed to how Green Bay is the smallest city to host a team in the NFL.

But why hockey?

Smith said while it is generally an overlooked sport, it was "more exciting" than other types of sports and "could give Fort Smith an identity." Bylaws for all major American sports leagues also specifically ban community ownership, with the exception of the NHL. (The Green Bay Packers were grandfathered in when the NFL changed ownership rules in the 1980s.)

As for how to pay for the arena, student Nico Treshnell said it would be a mix of different funding mechanisms. A one cent sales tax would account for 44% of the funding, the students estimated, with an additional 33.5% of the funding coming from asset backed securities such as bonds and another 22.5% would be secured through naming rights for the arena.

While the dream of an NHL team may be enticing for the students, it will be an uphill slide. In the case of the Green Bay Packers, the team became a part of the NFL in 1921 when the economics of professional sports was completely different than it is today.

As one of the observers of the students' presentation pointed out, the purchase price of a team itself would be a separate deal from the financing and construction of a venue to host the team, pointing specifically to NHL great Wayne Gretzky's recent efforts to bring an NHL team to Seattle at an estimated cost of $500 million. A New York Post report on his efforts noted that Gretzky was part of a previous effort by a private-equity firm that attempted to buy the parent company of the NHL's Toronto Maple Leafs and the NBA's Toronto Raptors for $1.5 billion.

"However, the NHL rejected the group’s offer because it would have been structured as a leveraged buyout with debt levels higher than 50 percent of the franchise value — which is against NHL rules," the Post reported.

Also unknown are operating costs for a nearly half billion dollar sports arena. And while the students, who worked on the proposal for a full academic year, believe the arena could be built using the funding mix of sales tax, asset backed securities and naming rights, the bankruptcy of what was then known as the Rose Garden in Portland, Ore., shows that arenas are not always a sound business.

The city of Fort Smith has also explored the possibility of bringing a minor league baseball team to the city before, but nothing came of it after a $160,000 fee was paid to a set of consulting groups to study the idea as part of a larger riverfront development plan.

City Director Philip Merry was on hand Wednesday to support the students and said supporters of the students' dream of securing an NHL team for the city were working to figure out next steps, including how much it would cost to do a feasibility study for the proposal, a study that itself must still find funding.

"We're going to keep encouraging all to come help and then we're going to see who will fundraise for this. … I guess over time maybe get a 501c(3) or whatnot. We're right at square one, sir."