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Despite pushback, TDC approves $90 million for indoor sports hall and Bay Center upgrade

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Despite pushback, TDC approves million for indoor sports hall and Bay Center upgrade

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Escambia County’s Tourist Development Council (TDC) had a “historic” meeting, Monday night, when the council recommended the county issue an up-to-$90 million bond for multiple projects.

Most of the bond money would go to an indoor sports facility in Gonzalez and improvements to the Pensacola Bay Center, but the board also approved $1 million to acquire the ocean liner SS United States, and another $350,000 for the pop-culture convention Pensacon, in other tax revenue.

The Escambia Board of County Commissioners will make the final decision on the board’s funding recommendations.  

“That was a historic meeting we just had,” said TDC Chairman David Bear at the end of the two-hour session. “$91,350,000. Sheesh.”

The largest requests, up to $60,000,000, for a new in-door sports facility at Ashton-Brosnaham Park in Gonzalez, and $30 million for improvements to the Pensacola Bay Center, passed 4 – 2, with six of the nine board members present. The “no” votes were cast by developer and attorney Jim Reeves and hotelier Mitesh Patel. Chairman David Bear, Escambia Commissioner Jeff Bergosh, businesswoman Shirley Cronley, and Ronald Rivera with the Escambia Sheriff’s Office all supported it.

The bond would require annual payments of up to $6 million annually for 30 years.

Prior to the vote Patel made a motion not to approve those requests until more stakeholders are brought to the table for discussion, especially on the sports center off 10 Mile Road, but no one seconded the motion and it died. Bergosh made a motion to send both projects to the BCC for approval, and that motion was seconded by Cronley and eventually approved by the board after a lengthy discussion.

What does the Ashton-Brosnaham feasibility study say?

Escambia County hired Convergence Design, in association with Crossroads Consulting Services, LLC (“Crossroads”), OWN and Nova Engineering, in late 2023 to study the feasibility of developing an indoor sports facility at Ashton Brosnaham Sports Complex, near 10 Mile Road in Escambia County.

The estimated construction costs and site improvements range from $38.2 million to $48.9 million. The study says together with soft costs, including design fees, inspections, testing, furnishings and equipment, the total project cost is expected to run from $47.9 million to $61.2 million in 2024 dollars and take 2.5 to 3.5 years to design and build.

The facility would have eight hardwood basketball courts that can be easily reconfigured as 16 volleyball courts, along with a range of supporting facilities including meeting rooms, spectator seating, food service and restrooms. The study purported that having more courts than Foley Event Center is not only viewed as a competitive advantage, but the location’s proximity to Pensacola Beach and other area attractions is as well.

The study found that a new indoor facility at Ashton Brosnaham would likely operate at a modest operating deficit followed by a stabilized year of operation (typically year three for such facilities). Although estimated to operate at a deficit, the study said the project will generate “significant economic benefits on an annual basis,” about $37.2 million by its fifth year of operation, including approximately $1 million in new county tax revenue and another $1.7 million in state tax collections.

$90 million for two projects: Escambia County wants to build indoor sports hall and upgrade Bay Center for $90 million

“These figures, for a stabilized year of operation, would likely continue to accrue as long as the facility is maintained and operated in a professional and competitive manner,” the report said.

The study also estimates the proposed facility is estimated to generate over 48,000 hotel room nights in a “stabilized year of operations,” but most of the week − typically Sunday evening through Thursday − it would be available to local teams and leagues for practice and competition. It said local events could also make use of a 73,000-square-foot column-free space for exhibits, banquets, expos, graduations and similar large flat-floor events.

“Escambia County Schools will also be able to use the facility in partnership with Parks and Recreation,” the study said. “Both the availability of new hardwood court space and of a new large flat-floor event space will provide substantial benefits to the citizens of Escambia County and the region, quite apart from the economic activity generated by youth sports tournaments and similar weekend events.”

Why some want to wait before funding pricey projects

Visit Pensacola CEO and President Darien Schaefer told the board Visit Pensacola uses the “fifth cent” – the bed tax dollars the county is proposing to use to fund the sports facility and Bay Center improvement projects – for destination development and to either create new facilities or renovate existing facilities that have the potential to generate significant visitor impact for Escambia County. He is concerned the county is going to tie up too much tax money for too long and still leave Pensacola without one of its biggest needs, a conference center.  

“It is going to effectively use up the fifth cent as far as being bondable, and neither of the two facilities proposed are going to be able to provide that meeting and conference space needs,” said Schaefer. “And with the fact that that’ll be bonded for the next 30 years, it means that, unfortunately, we won’t have the ability to use TDC funds to help create that facility, potentially for the next 30 years, and that would be detrimental to the county.”

Innisfree Hotels President and CEO Ted Ent also spoke to the board about the financing plan, saying the bond restriction on the tourist development tax dollars will be an expensive burden the county will carry for a generation. He also was concerned that stakeholders, or different people, organizations and neighborhoods who would either use or be impacted by the projects, didn’t have enough to time to review or discuss them, especially the study the county funded to build an indoor sports facility at Ashton-Brosnaham Road in Gonzalez.

Several others raised similar concerns about the large ask with what they believed was short notice. Ent wanted more time and input from a wider group of stakeholders before voting, so they don’t “bond something away that we can’t come to at a later date.”  

“Most of these stakeholders were not consulted before this study came out two days prior to the last TDC meeting,” said Ent. “In fact, to my knowledge, no current hoteliers or our local DMO (destination marketing organization) or anyone else who generates TDC money was consulted in any way about the proposal of the current location. However, the hoteliers that I’ve spoken to, including myself, who represents industry hotels, does not support the current location (of the sports facility). The study indicates that we are going to spend $4 million in tax money every year to service the bond to generate just $1.1 million in additional local tax revenue after the year that we have stabilized the project. To me, that is just not a good investment.”

While most of the board members and several members of the public who spoke to the board all agreed a sports facility was needed, as well as improvements to the Bay Center, some did not agree that building a sports facility, large enough to compete with the Foley Event Center, off 10 Mile Road was a good plan. Several, including Bear, said they would prefer to see the Bay Center renovated and expanded to meet the growing needs of the area, including sports, events and entertainment.

“I think that’s a better location. Unfortunately, no one has presented us with that case today,” said Bear. “We’ve been talking about the Bay Center since it was built in ‘83 or ‘84, whenever it was. I think plenty of people have had the opportunity to give input to come to our meetings. Where were the people that were concerned about this before? Do we just continue to push this off?”

Wait is exactly what TDC members Teniadé Broughton and Mitesh Patel wanted to do. Broughton, who is also a Pensacola City Council member, had to leave the meeting early to attend a city council meeting. Before leaving, she asked the board to consider waiting to vote on the request because not everyone had a chance to weigh in on it yet.

Patel also repeatedly asked to wait until more people had time to review the feasibility study for the sports facility that was only recently provided before voting.

“I know you said a lot of people have come to the table since this has been brought up, but I want to say, even our own board was never shown the full study until we asked for it,” said Patel. “I don’t think that’s right. I don’t think it’s good to hide things and not be fully transparent and then say, ‘Hey, vote on $90 million, but don’t get all the information just yet. Just say yes and then we can show it to you.’

“You may leave a legacy, but you’re going to leave a legacy for the next 30 years where people are not going to be happy with the decision that was made. I really hope this board takes into consideration this is a 30-year bond. This is a big deal. We do not need to rush through this.”

Jim Reeves also urged the board to wait, in part because of the location of the sports facility and the financing. The Bay Center is estimated to need more than $40 million for improvements and repairs, but the county is borrowing $30 million.

“I would rather go ahead and borrow the $40 million, have the correct amount of money, and deal with that,” said Reeves. “Secondly, we’ve got a political situation as it relates to the location of this other facility. In my opinion, we ought to wait. And waiting, two things happen. A, everybody who’s important to it gets a buy in, and B, theoretically, interest rates are going down. That shoe still hadn’t dropped, and bonds are going to go way down, in my opinion.”

Bergosh and other board members spoke in favor of the proposals saying both improvements will generate income for the county, and a new indoor sports facility at Ashton-Brosnaham would be multi-use for different sports as well as community events.

“We’ve got the fifth cent, we’ve got the ability to bond it,” said Bergosh. “We can do two worthwhile projects, and we can really move the ball forward. These decisions are big decisions, but I feel like there’s support on the board of county commissioners for this, at least for the next couple months. I don’t know about after that, but if we want to get something done, I think now’s the time to get something done.”

“I think we’re rushing this thing,” Patel responded to Bergosh. “Like you said, you only have a couple months, so I understand why county commissioners feel like they have to rush this through to try to get it done, but when you rush, you don’t get it right. I think we need to slow down. All the stakeholders need to be at the table.”

Other projects recommended for funding

The TDC also recommended a request to give Pensacon organizers $350,000 to help support the annual pop-culture conference. A representative for Pensacon told the board their business took a hit during COVID from which they are still struggling to recover.

The board agreed, saying it recognized the contributions the event makes to the area. Pensacon estimates it brings $3 million to $5 million to the downtown Pensacola area during the annual weeklong event.

Ship-shape artificial reef: USS Oriskany could be getting some company. Escambia considers sinking SS United States

The board also approved Escambia Marine Resources request for $1 million to put toward acquiring the SS United States, a famed ocean liner the county wants to sink in the Gulf of Mexico as an artificial reef. The project is estimated to cost between $7 million and $8 million. This latest award, if approved by commissioners, plus another $1 million committed by state representative Alex Andrade, would bring the total amount Escambia has raised to be more than $7.5 million.

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