Orlando may incentivize massive Magic entertainment district

The Magic’s long-planned half-a-billion-dollar entertainment complex next to the Kia Center could get a boost from City Hall next week.

City officials propose kicking in $2.5 million toward building a conference and event space at the venue — as well as refunding up to $40 million in property taxes on the project over about a decade.

The proposed Sports and Entertainment District covers more than eight acres between Hughey Avenue and Division Street and is expected to have office space — including the professional basketball franchise’s corporate headquarters — as well as retail, hotel, meeting space and apartments.

The incentive package is critical in moving the development forward, with construction planned to start next year and be completed in 2027, said David Barilla, executive director of the Community Redevelopment Agency.

“It’s harder to get projects financed and to construction,” Barilla said. “We did not see it being feasible without it.”

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The City Council is expected to vote Monday on the incentive deal as well as a new development agreement.

However, the deal — first reported by the Orlando Business Journal — drew criticism from state Rep. Anna Eskamani, D-Orlando, who tweeted: “Would love to see more public dollars allocated to homelessness services & shelter space before publicly subsidized entertainment complexes.”

In an interview, she argued taxpayers should see more long-term benefits — like even more affordable housing in the plan — if the Magic were receiving years of tax relief.

“We need to see better community benefits … There should be substantially more affordable housing,” she said. “If they’re going to have this benefit for years to come, where is the long-term benefit for the people of Orlando?”

The Magic, owned by the DeVos family, have eyed developing the land next to the publicly-owned Kia Center for more than a decade.

The current proposal has 273 apartments attached in its first phase of construction, with 10 of those deemed as “attainable” or for families who earn 80% or less of the Area Median Income — or $77,200 for a family of four in Orange County.

Barilla said the city could work with the Magic to include more units in future planned phases of the complex’s construction.

The property tax benefits would begin the first year the development receives its certificate of occupancy and last until SED Development is refunded $40 million, or $35 million if the office space is never built, the agreement shows. The city projects the annual tax bill to start at $4 million.

It began when SED Development, a sister company of the Magic, bought Orlando’s police headquarters, which fronted Hughey Avenue, and a parking garage for $12.7 million.

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Over time, the NBA franchise’s vision for the entertainment complex has shifted, and they’ve settled on a plan to build 300,000 square feet of office space, nearly 30,000 square feet of retail space, 261 hotel rooms and 273 apartments.

It’s also expected to include a public-access parking garage with 1,100 spaces. The city also gains access to using the event space for up to 10 times per year free of charge and a commercial space will be set aside for use by Parramore-based businesses, Barilla said.

Among the most sought-after components for the city is the addition of 65,000 square feet of convention space, which he said could host meetings of roughly 1,000 people in the downtown area. Such venues that are standard in cities across the country are lacking in Orlando’s downtown, he said.

“We want to make sure that Downtown Orlando, we’re able to keep that momentum going, and create an exceptional center city,” Barilla said.

rygillespie@orlandosentinel.com