As of late, there has been so much misinformation spread about the BB&T proposal. It’s time for a clarification. First, 20 years ago, the Broward County Commission decided that it wanted an arena and a professional sports team. It levied a two cents sales tax on tourists who stay in our hotels to pay the debt service on that arena.
An agreement was reached to guarantee that at least $8 million per year from the tax would go towards paying down that debt of over $450 million.
This tourist tax has nothing to do with property taxes on Broward County residents. It’s purely raised from people from other places coming here staying in our hotels.
In addition, the arena operators were to pay $4.6 million annually of the debt service, as well as revenue share for any profits made over $12 million at a rate of 80 percent for them and 20 percent to Broward County. Broward County owns the BB&T Center, therefore, the remaining $250 million debt is ours, not private investors.
The Broward County Commission hired the arena operators to manage the daily operations of the building, obtain shows and the professional sports team, the Florida Panthers.
The arena operators are saying that they have been losing $35 million per year. Their request is that if the county commission allocated an additional portion of that two cents tax towards their portion of the debt service, it would allow them to be more profitable, thereby having the ability to revenue-share with the county sooner and at a higher rate of 30 percent for us and 70 percent for them, once the $12 million threshold is met.
They asked us to bring the insurance for the arena under the county’s umbrella policy to save $1.7 million per year in insurance cost. We requested guidance so the commission agreed to have an outside consultant and auditor review the proposal to see what’s in our best interest to protect our asset. That will take 60 to 90 days and no decision has been made in terms of the proposal.
The bottom line is whether we have the Panthers and arena operators there or not, we will still have to pay for the building. In addition, the expectation is that without the sports team there it would devalue the building to $60 million and the BB&T Center could be empty for six months out of the year.
Barbara Sharief is mayor of Broward County and represents District 8 on the county commission.