Marketing company to decide soon about whether to pursue Lincoln arena

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By DEENA WINTER / Lincoln Journal Star

IIn a couple of months, the city should know whether it would be financially feasible for a private sports marketing company to pursue the possibility of building a new arena for Lincoln.

If such an agreement were made, local taxpayers could be off the hook for roughly $160 million of the estimated $250 million cost of the proposed arena project.

With a private company financing the arena portion, the public price could drop to $90 million or less.

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West Haymarket aerial showing site where city hopes to build an arena, convention center and hotel. (Photo Courtesy of City of Lincoln Planning Department)

West Haymarket aerial showing site where city hopes to build an arena, convention center and hotel. (Photo Courtesy of City of Lincoln Planning Department)

The city’s plans would still call for new parking garages, surface parking, railroad realignment and new offices, restaurants and stores west of the Haymarket District.

A privately financed arena has been talked about in recent months by the city and a company called IMG College and its affiliate, International Stadia Group.

Three representatives of the companies were in Lincoln about a week ago to talk to city officials about their foray into privately financed arenas in the U.S. International Stadia Group is studying the viability of the concept in Lincoln, and expects to have a decision on whether to proceed in about two months.

An arena steering committee was briefed on the proposal Tuesday.

Most arenas are publicly financed, but IMG helped develop the marketing and financing model used to build London’s new Wembley Stadium and is pursuing privately financed stadiums in Brazil and India.

The company created International Stadia Group to try that marketing and financing model in the U.S., and recently agreed to a formal study of the possibility of building a new downtown arena for the Kentucky Wildcats.

City Finance Director Don Herz said he can’t see any downsides to the International Stadia Group idea. For every dollar they invest in the project, that’s one less dollar the city has to get from taxpayers, shifting risk to the private sector, he said.

IMG is familiar with the University of Nebraska-Lincoln already because it handles media and marketing for the Athletic Department, as well as other Big 12 schools. In June, the Athletic Department signed a 13-year contract with IMG worth up to $112.5 million to the Huskers — one of the largest contracts of its kind.

IMG sees college sports as a growth industry, and approached UNL officials with the arena idea this summer. Their major funding source is Goldman Sachs.

UNL Athletic Director Tom Osborne said once International Stadia Group has finished its preliminary research, “they’ll come back and we’ll sit down and talk.”

He said if International Stadia Group fronted $160 million of the cost, and with some private contributions from groups like 2015 Vision, the city’s cost could drop to $70 million.

“Hopefully that would make it more palatable,” he said.

What’s the tradeoff? International Stadia Group would make as much money as possible off of things like club suites, premium seating, naming rights, merchandise licensing, concessions, signage and sponsorships. But International Stadia Group wouldn’t own or manage the arena unless the city wanted it to, city officials said.

The city’s arena coordinator, Kent Morgan, said it’s up to the city to choose from a menu of service options the company can provide. He said International Stadia Group would be in a better position to land lucrative national advertisers and deals because of its connections.

IMG is a division of global sports and entertainment giant IMG Worldwide, which operates in 30 countries doing everything from managing Tiger Woods’ career to producing Fashion Week.

Even if the company did finance the arena, a public vote would still be needed to finance supporting infrastructure, such as streets and land purchases. Mayor Chris Beutler said he still plans to seek a public vote on a new arena in the spring.

In other arena developments, an arena design committee is leaning toward:

* Not including a hotel as part of the arena. The developer the city is working with on accompanying arena offices and retail and restaurants, Lincoln Traction Partners, says two hotels are already planned nearby in the next two years.

* Extending R and Q streets west into the arena development area and allowing vehicles on them, except during some events.

* Closing Seventh Street from Q to R and converting that into a public space of some kind, perhaps an ice skating rink.

* Connecting streets near Memorial Stadium to the arena development through new connections that include peanut-shaped roundabouts.

Reach Deena Winter at 473-2642 or dwinter@journalstar.com.