Two firms made pitches Tuesday to develop a strategic financial plan to finance the renovation of Rupp Arena, build a new, expanded convention center and develop the remainder of the Arts and Entertainment District.
The two firms were among five finalists that responded to a request from the Lexington Center Corp. seeking a consultant to evaluate the financial feasibility of the project. The two firms made presentations to a subcommittee of the Lexington Center Corp.
"What we have on the table now is a concept. We want a business plan to know how can we make this a reality," said Cecil Dunn, ex officio member of the subcommittee and chairwoman of the Lexington Center's board of directors.
Presenting their credentials, and possible funding sources, was really two teams made up of more than one firm.
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On the first team were Conventions, Sports & Leisure International, a firm specializing in providing consulting services to the sports, entertainment and leisure industries; Legends Sales and Marketing, a sports business enterprise that is a partnership among the New York Yankees, the Dallas Cowboys and Checkette Partners; Live Nation, the largest producer of live music concerts; and HKS World Events.
CSL International has assisted cities, universities and professional athletic teams in assessing the feasibility of sports arenas. The firm's experience has included working with American Airlines Center in Dallas, Barclays Center in Brooklyn, the BOK Center in Tulsa and the McCarthy Athletic Center at Ganzaga University in Spokane.
The second team was HVS Convention, Sports & Entertainment Facilities Consulting, based in Chicago, and included The Bruggeman Group, a Lexington-based firm that specializes in government affairs.
Their projects have included a feasibility study for the new Music City Center in Nashville, the Hyatt Regency McCormick Place in Chicago, and the Ernest N. Morial Convention Center in New Orleans.
Subcommittee member Craig Turner asked Bill Rhoda, a principal with CSL, the initial budget for some of his firm's projects, and asked, "Did you hit them?"
Rhoda said that 95 percent of all his firm's projects "have exceeded the financial expectations of our feasibility studies."
His firm "takes a conservative analysis," Rhoda said. "We scale back our expectations and allow our clients to exceed theirs."
Holly Weidemann, a Lexington developer serving on the subcommittee, wanted to know whether Rupp had enough "correct bones" that it could be expanded into a flexible structure good for basketball and sporting events, as well as concerts.
"The basic structure of the building is good enough to do a high-class renovation that will last a long, long time," said Sims Hinds, vice president of HKS World Events.
Rhoda was asked whether the Green Bay Packers' model of selling individual stock certificates in the stadium to finance an overhauled structure was feasible in Lexington.
"It wouldn't work everywhere. In this market it may have some appeal," Rhoda said. "It is something we will definitely take a look at."
The financial scope of a renovated arena, a new convention center and a surrounding mixed-use development is expected to be in the range of $250 million to $300 million.
The Arts and Entertainment Task Force, which finished its work and gave a final report earlier this year, identified 14 possible sources of revenue, including tax revenue, tax increment funding, media rights income, a stock offering, naming rights, and advertising and sponsorship revenue.
The subcommittee will recommend one of the two firms to the Lexington Center board of directors at its Nov. 15 meeting. The board is expected to make a selection at that time.