Go-ahead expected on arena

By ERIC BERGER

June 29, 2000 Web posted at: 2:01 PM EDT (1801 GMT)

HOUSTON, Texas (The Houston Chronicle) -- The sports authority today is expected to pass a nearly completed agreement with the Houston Rockets to build a downtown arena.

Such approval would authorize Harris County-Houston Sports Authority Chairman Billy Burge and several deputies to finalize the agreement without another board vote, probably by July 10.

Burge said the agreement's main components are wrapped up, and that finishing the letter of agreement to build a $175 million arena subsidized with public money is largely a matter of attorneys hammering out the language.

"We feel it's important to get this out to the public now," Burge said Wednesday.

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But the Rockets will not approve the new deal until getting assurances that it will not be opposed by foes of the proposal defeated by voters last November.

"We don't have an agreement yet, but we hope to have one soon," Rockets Chief Operating Officer George Postolos said.

Yet today's sports authority vote would free Burge to move forward with an agreement and plans for a referendum before the end of July, when the next board meeting is scheduled. He and the Rockets would like to kick off a campaign before then.

Sources briefed the Chronicle on the deal Wednesday afternoon and characterized it as similar to that used to fund construction of Enron Field.

There will, however, be no private financing outside of Rockets owner Leslie Alexander's contribution. It had been speculated that a group organized by Enron Corp. Chairman Ken Lay might assist with purchasing the site as it did for the ballpark.

Instead, as in the last arena deal, the city will be expected to buy land for the four-block site. By moving about five blocks south from last year's proposed arena site the city should save $15 million to $20 million on the land, officials said.

The land -- not counting the parking garage -- is still expected to cost at least $12 million to $15 million. The new site is nearly all privately owned.

In the new agreement, the sports authority has committed to new costs, including contributing to the arena's operating expenses.

The rejected deal called for the Rockets to contribute $1.1 million annually to a major repairs fund. But the sports authority has since realized that won't be enough, with similar funds for Enron Field and the new football stadium under construction needing at least $2.5 million, sources said.

Now the Rockets will contribute $1.6 million a year to the major repairs fund, and the sports authority up to $1.5 million toward a normal repairs fund, for items such as carpet wear and tear.

Also, the sports authority agreed to review the arena in its 15th year of operation and, if funds are available, give the arena a face lift. No costs associated with this are specified.

In return, the sports authority will receive 5 percent of the arena's naming rights revenue -- capped at $200,000 a year -- which will be built into the team's $8.5 million annual rent payment.

The Rockets have also agreed to spend $2 million in arena design costs between when a deal is signed and the expected Nov. 7 referendum. This would allow for construction to begin by August 2001, with completion for the 2003-04 National Basketball Association season.

Also Wednesday, former Reliant Energy Chairman Don Jordan, an ambassador for the agreement, met with Houston Aeros owner Chuck Watson, who opposed the 1999 arena deal. According to sources, Watson said he wants to support the new proposal but will withhold judgment until seeing a final letter of agreement.

Watson could not be reached Wednesday night.

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