Tom Benson’s purchase of New Orleans Hornets officially approved by NBA

June 14, 2012

Athletics

NBA Board of Governors approves New Orleans Hornets sale to Tom Benson

By Jimmy Smith
The Times-Picayune

The NBA Board of Governors on Wednesday approved the sale of the New Orleans Hornets to Tom Benson, the league announced.

The sale will be officially closed later this week. The Hornets are expected to make an official announcement concerning Benson’s take-over on Thursday.

Louisiana Gov. Bobby Jindal has signed off on the state’s capital outlay bill, which included nearly $60 million for improvements to New Orleans Arena, as well as on the extension of the Quality Jobs Tax Credit, both elements which were critical in the agreement the state had with the Hornets to extend the lease in the Arena through 2024.

According to sources with knowledge of the process, the NBA has been gathering votes all week from the 29 other Board of Governors’ representatives, a formality which can officially consummate the transfer of ownership from the league, which purchased the team in Dec. 2010 to Benson.

On April 13, Benson, who also owns the New Orleans Saints, signed an agreement to purchase the Hornets from the NBA for $338 million.

In the intervening months, the legislature debated, and eventually included, capital improvement funding in the Arena, which will eliminate state subsidies of potentially $7 to $8 million annually to assist the Hornets financially.

The building’s improvements are aimed at enabling the Hornets to reap additional revenues through various enhancements.

At the same time, the NBA has been vetting Benson, a standard process that customarily takes one to two months, while simultaneously waiting for the legislature to sign off on the funding requirements for Arena upgrades.

Commissioner David Stern took the unprecedented step of buying the Hornets, then in a state of financial disarray, from founding owner George Shinn, who had offers from out-of-state suitors who intended to buy the team and move it out of New Orleans.

Shortly after buying the franchise, and essentially placing it in receivership, Stern appointed New Orleans native Jac Sperling in charge of finding an owner, preferably locally, who would keep the Hornets in New Orleans, while also efforting to improving the team’s economic condition and negotiating a more favorable lease with the state.

In late March, Sperling and team president Hugh Weber announced an agreement in principle with the state regarding a lease extension through 2024, contingent upon the franchise’s sale, state funding for Arena improvements and an extension of the Quality Jobs Tax Credit. The tax credit provision, which was originally approved when the Hornets relocated here from Charlotte in 2002, provides the team about $3.6 million in annual tax breaks. It was due to expire this year.

The Louisiana Stadium and Exposition District (LSED) approved the new lease with the Hornets at its meeting on April 18.

The revised lease, which is void of escape clauses, goes into effect on July 1, and binds the Hornets to New Orleans through at least 2024.

Wednesday’s approval by the NBA Board of Governors officially closes the 17-month saga during which time the league was almost universally criticized for taking the unique step of owning the team.

On the day the league announced Benson’s agreement to buy, Stern, sitting on a dais next to Benson, told him, “Congratulations, Tom. You’re one player away.”

The NBA made no comments on Wednesday beyond a one-sentence release stating that the Board of Governors had approved the sale.

http://www.nola.com/hornets/index.ssf/2012/06/nba_board_of_governors_approve_2.html#incart_river

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Governor Bobby Jindal signs state construction budget without any line-item vetoes

 By Jeff Adelson
The Times-Picayune

Baton Rouge — The state’s construction budget for next year and a set of bills aimed at speeding the cleanup of lands damaged by old oil and gas drilling were signed Wednesday by Gov. Bobby Jindal. So far, the governor has signed 777 of the 886 bills the Louisiana Legislature sent him this session. Jindal has vetoed 12 bills.

In signing the construction budget in House Bill 2, Jindal did not issue any line-item vetoes. The entire $4.3 billion, multiyear spending plan calls for about $120 million more in new projects next year than there will be money to pay for them. That means legislators and others pushing for specific projects will have to make their case to the State Bond Commission in hopes their items will be included in the $350 million in new financing that will be approved next year.

The bill includes up to $60 million as part of a deal to keep the National Basketball Association’s Hornets in New Orleans through 2024. That money will go toward improvements over the next two years to the New Orleans Arena and could be used for other work on practice facilities.

The bill also includes $6.75 million in funding for the Jefferson Parish Performing Arts Center, with $2.6 million of that potentially available next year.

http://www.nola.com/politics/index.ssf/2012/06/gov_bobby_jindal_signs_state_c.html

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 New Orleans Arena  officially opened on October 19, 1999.

 

 

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