Orlando Reaches Magic Deal

The city of Orlando and the NBA’s Magic reached a deal December 22nd outlining the intricate details for a new arena expected to cost about $480 million and seat 18,500.

Under the deal, the ownership of the building will remain with the city and the team will cover any cost overruns and oversee much of the construction, according to the Orlando Sentinel.

The team also negotiated for the city to give up concession revenue from basketball games, which is now shared between the two.

The city will collect about $500,000 more in revenue each year than it does at its current home, Amway Arena,

"It is very fair and balanced for the residents of the city and the Orlando Magic," Orlando mayor Buddy Dyer told the Sentinel. "That was extremely important to us, that when we operate this, we operate it in a fiscally responsible way."

The city is expected to approve the deal early next year, the paper reported.

Major parts of the new deal include: the city receiving $1.75 million from naming rights, corporate suite sales and advertising revenue the first year the arena is open and will increase 3 percent each year. The current deal provided $573,780 from those same sources in 2006, the paper reported.

Annual lease payments are $1 million, and the team will keep money from ticket sales and pay $50 million up-front to the city. The team is expected to sign a 25-year lease, the paper said.

"It was a difficult negotiation from our standpoint," Magic COO Alex Martins said. "We certainly didn’t get everything we wanted."

"But we believe it’s a deal we can live with," he told the paper. "It’s a fair deal."

Orange County does not have to approve this deal, the paper said, but will be asked to approve a separate agreement to essentially fund the new arena, a new performing arts center and renovations to the Florida Citrus Bowl.

In the coming months, the county could decide whether to use a hotel tax to help cover about $1 billion worth toward a host of downtown projects, the paper said.