City of Anaheim approves new management deal for Honda Center

Since opening its doors on June 19th, 1993 for a Barry Manilow concert, Honda Center (then called the Arrowhead Pond of Anaheim) has been the home of the Anaheim Ducks. Numerous concerts, hundreds of basketball games, miscellaneous events from WWE to bull riding, thousands of hockey games, and a Stanley Cup later, the desire for the Ducks to stay in the building remains.

On Tuesday evening, a new agreement between the City of Anaheim and Anaheim Arena Management was approved by Anaheim City Council by a vote of 6-1.

Under the new agreement, Anaheim Arena Management, the management company owned by Henry and Susan Samueli that also owns the team, will extend its deal to run the city-owned home of the Ducks until 2048 with the option for five-year extensions thereafter.

Under the terms of the agreement, Anaheim Arena Management would take over operations of the Anaheim Regional Transportation Intermodal Center (ARTIC) across Katella Avenue and free the city of the current $2.5 million revenue shortfall the center currently operates on.

In an effort to close this gap and make the center profitable, the management company “will seek to close the deficit with more advertising revenue, lower costs, and operating efficiencies with Honda Center” according to the agreement. This would include the construction of a new digital advertising display visible from the 57 freeway.

The new agreement will also allow the City of Anaheim to sell the parking lots around Honda Center to Anaheim Arena Management to enable development and improvements. This could allow Henry and Susan Samueli to build apartments as well as shopping and entertainment facilities on the land surrounding the arena.

What would the City of Anaheim get out of this new agreement? Outside of being freed of the $2.5 million operating deficit currently being run by ARTIC, the sale of the parking lots will generate $10.1 million for the city.

Additionally, a much more favorable revenue-sharing program will be implemented upon the start date of the agreement. Currently, Anaheim receives 20% of any revenue over $12 million for the year from Honda Center operations. Under the new agreement, any net revenue over $12 million would be split 50-50, with the revenue-sharing threshold lowering to $6 million per year beginning in 2023. The city will also take in 60% of the revenue generated from ARTIC under the new deal.

A framework for the new deal was presented to the city in late October, with the final iteration approved by city council on November 20th. The new agreement will take effect on February 1st, 2019.

More information on the agreement can be found here.