PNC Arena redevelopment, renovations could be approved as soon as Tuesday

The long-awaited development of the land around PNC Arena – and the Carolina Hurricanes’ long-term commitment to continue to play there – appear to finally be at hand.

The Centennial Authority, which oversees the arena, scheduled a special meeting for Tuesday morning to “hear from the Authority’s Consultant regarding arena lease negotiations and vote on two (2) term sheets,” which are believed to be a new long-term lease with the Hurricanes and an agreement to allow Hurricanes owner Tom Dundon to convert what is now 80 acres of parking lots and undeveloped land into a multiuse development that could change the face of West Raleigh.

Both the lease and the development have been contingent upon the Centennial Authority’s plans to renovate PNC Arena with funds from the Raleigh-Wake County hotel and restaurant tax. The city and county are presenting their final recommendations on how to allocate that money at a meeting of “hospitality tax stakeholders” Friday morning in Raleigh. Those recommendations would then have to be approved by the city and county in meetings scheduled later this month.

When all three of those pieces are in place, the authority will be able to move forward with the long-awaited reimagining of the arena and its environs, and the Hurricanes will be newly committed to remaining in Raleigh and sharing the building with N.C. State men’s basketball for the foreseeable future.

“That’s not going to be the problem,” Dundon told The News & Observer in June. “Assuming the constituents are all happy, I think I’m the easiest part of this, candidly. We want to stay, and the idea of building all this is fun. That’s why we’re doing it.”

Dundon’s vision for the land around PNC Arena includes offices, shopping, dining, a sportsbook and an indoor-outdoor live music venue, all designed to not only give both arena-goers and N.C. State football fans opportunities to eat and drink on site before games and events but make the area a 365-day destination. Proponents have described the plan as creating a potential new gateway to the city from the west.

Dundon, Hurricanes president and general manager Don Waddell, authority executive director Jeff Merritt and authority chairman Philip Isley were not immediately available for comment Thursday night.

“I look at this as a tremendous opportunity to really prepare for the future of our city and be at that next level,” Raleigh mayor Mary-Ann Baldwin said in February. “So I’m excited about it and think it’s really important that we explore this and that we all work cooperatively to make it happen.”

Baldwin said the development around PNC Arena could be a “game-changer” for the city, and Waddell said it could make PNC Arena and the area around it a “destination” and not just a venue.

The authority has been trying to upgrade and modernize the 24-year-old arena for several years but was delayed first by the sale of the team to Dundon in 2018 by original owner Peter Karmanos, then the COVID-19 pandemic. The renovations, which are expected to cost more than $250 million, will be paid out of the tourism tax fund that financed the construction of the arena and the Raleigh Convention Center.

When it was constructed in 1999, the arena was envisioned to be at the center of a new West Raleigh entertainment district with N.C. State’s Carter-Finley Stadium, and Karmanos was given the rights to develop that land as part of his original lease when he moved the Hartford Whalers to North Carolina in 1997. (The team played in Greensboro for two years while what was then called the Entertainment and Sports Arena was completed.) But Karmanos never had the finances or the interest in developing the land, and it has remained unchanged for more than two decades.

Dundon started pushing hard to take advantage of that opportunity in the spring of 2022, when NHL commissioner Gary Bettman visited Raleigh on the eve of the NHL playoffs to meet with the Centennial Authority and emphasize the NHL’s interest in upgrading both the inside of the arena and the area outside it. Since then, Isley and the authority have conducted a delicate dance among stakeholders that included the Hurricanes, N.C. State, Raleigh, Wake County, the legislature and several state agencies, in part because the arena sits on state-owned land.

“We have lots of cooks in the kitchen, so we’re running traps, making sure we’re talking to the right folks, keeping everybody informed and up to date,” Isley said in June. “We have a lot of people to talk to. It’s an interesting authority. We’re doing all that. … I’m an optimistic guy. I hope we have something by (July). We’re pushing as hard as we can to figure that out.”

The authority, which recently added some newly appointed members, has been kept informed and up to date throughout the process. A special board meeting was held July 26 as the authority met at length in a closed session to be updated on the negotiations.

CAA ICON, the strategic management consulting firm contracted by the authority, has been integral in the lease negotiations. CAA ICON consultant Dan Barrett has served as the authority’s representative in the lease talks.

In May 2020, the authority voted to accept a term sheet with the Hurricanes on a five-year lease extension through July 1, 2029.

“One of our goals was to get the Hurricanes to be in an average lease situation in the NHL,” Tom McCormick, then the authority chairman, said at the time.

Waddell noted there were ongoing talks about renovating the arena and developing the property around the arena, saying the extension “gives us an avenue to pursue that.”

A requirement in completing that term-sheet agreement in 2020 was that the authority gain approval from the City of Raleigh and Wake County that $9 million a year through 2029 be provided through the Tri-Party Agreement, in which money annually is appropriated from the hotel and prepared food and beverage tax revenue.

The latest Tri-Party amendment was approved in October 2020. The lease extension then was turned over to attorneys for the authority and the Hurricanes for final inspection, and it was finalized in July 2021.