Plans include adjacent mixed-use development
The City of Cedar Park will break ground later this month on a $55 million multi-purpose event center that has been in the planning stages for more than two years.
“This is a project that was stopped, started and reviewed several times before we found a winning situation for our city,” Cedar Park Mayor Bob Lemon said. “This is a true economic development success story. The new event center is a project we’re very proud of here in Cedar Park.”
Located on the northwest corner of New Hope Drive and 183A Toll, the 6,800-seat arena will be the home of the Dallas Stars’ AHL affiliate, the Texas Stars, and provide the city with a venue for hosting many different types of events.
The deal
“When we first started researching event centers, we thought there was a model to follow,” Cedar Park economic director Phil Brewer said. “It became evident quickly that each project was different in how it was structured and funded.”
City council had four key points it was seeking in a partner for the event center: strong financial backing, a willingness to fund annual operating costs, a willingness to discuss revenue sharing, as well as a funding model that would require no property tax increases.
In May 2007, the Cedar Park 4A Board listened to proposals from three firms, including the Austin Ice Bats, but was unable to find a suitable deal.
As Cedar Park began exploring alternative options, Hicks Sports Marketing President Jim Lites called with an interest in being a tenant. Brewer informed Lites that the city was more interested in finding a partner to help build an event center. Two hours later, Lites called back to request a meeting to discuss a partnership opportunity.
“We are thrilled to be able to have our minor league facility inside our television market and to be playing in as good of a facility as this is going to be,” Lites said. “I think what the city will love is that the center is going to do a ton of concerts, family shows and other sporting events.”
The Cedar Park Event Center will cost approximately $55 million, of which $43 million will come from the city. The Cedar Park 4A Board proposed funding the project with 4A bonds, and voters passed the movement November 2006. Funding for the event center does not involve any property tax increases.
The remaining $12 million, roughly 22 percent, will be covered by Hicks.
Hicks will also pay rent of $2.5 million over the next 25 years, with the first five years being rent free. Capital repairs will be funded solely by Hicks for the first eight years. The next eight years will be co-funded by Cedar Park and Hicks, with repairs in the final years of the agreement being the responsibility of the city.
Proceeds from events will be split evenly between Hicks and the city. According to Brewer, Cedar Park’s portion will likely go into a sinking fund to help pay for capital repairs when the city is made responsible.
“When you start looking at how other communities financed event centers, and then look at what we have come up with, it is evident that we were able to negotiate a pretty good deal,” Brewer said.
Events
The primary residents of the center will be the Texas Stars, an American Hockey League team with 40 home games per year, plus pre-season and post-season contests.
Much like the Round Rock Express, the Texas Stars will provide a farm system for the Dallas Stars. Professional players may spend time in the minors to recover from an injury, and up-and-coming minor league players may get called up for a chance play in the big leagues.
“It is the best level of hockey players not playing in the NHL,” Lites said. He estimates that 90 percent of professional hockey players played in the AHL at some point.
The possibility also exists that the Austin Wranglers, an Arena Football League team, and the Austin Toros, a National Basketball Developmental League team, could use the event center as their home.
However, the event center will be used for more than just sporting events. Seating in the event center is expandable to 9,000 seats, the acoustics are state-of-the-art and the dressing rooms and bus hookups were designed with traveling acts in mind.
“Our event center is designed to accommodate a variety of different acts,” Brewer said. “From family shows like Disney On Ice and Sesame Street to concerts, boxing matches and graduation, it is adaptable to so many different things.”
Hicks affiliate Center Operating Company, who also operates the American Airlines Center in Dallas, will manage the event center, book acts and staff the facility. Lites said the center will draw acts similar to the Nokia Theater in Grand Prairie, where artists Alicia Keys, Melissa Etheridge, Stone Temple Pilots, Boston and Styx will all play this summer.
Hicks will assume all financial risk of operating the facility.
Surrounding development
“Typically these facilities are not viewed as revenue generators, they are viewed more as economic engines,” Brewer said. “You build these things and you see the ancillary and the complimentary development occur all around it. That’s where you generate your sales tax.”
As part of the agreement, Hicks will purchase the 17 acres adjacent to the event center with the intention of turning it into a mixed-use development with 91,000 sq. ft. of retail and 91,000 sq. ft. of commercial.
Construction will not begin on the project until 24-36 months after the event center’s foundation has been completed, according to Lites.
“We don’t want to do anything quick. We’re in no big hurry and we are not going to do a short-term, short-sighted project just to turn a profit,” Lites said. “We made a commitment to the City of Cedar Park. They are our partners and we are not going to disappoint them.”
The activity has sparked development surrounding the project as well. Developer Norm Green has a 24-acre, mixed-use development planned for the property south of the event center. Green’s development will consist primarily of retail, with hotels, condominiums and office space sprinkled throughout.
“I think [the event center] will change development in that area,” Green said. “It just confirms the growth of the community. They’re up to good things.”
Growth is no stranger in Cedar Park, and the event center is just a sign of more to come.
“It is going to be a catalyst and an economic engine for driving additional development in and around the event center,” Brewer said. “It will completely change Cedar Park.”
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