A banker with Utah connections, Larry Miller's "vision" and a growing Japanese interest in investing in America's hinterlands all played a role in a deal that led to a $66 million loan for a new Jazz arena, key players in the deal say.
Tuesday afternoon, officials were scheduled to break ground for the downtown arena (see accompanying map), with an accompanying fanfare of balloons, fireworks, monster trucks and a predicted crowd of 3,000 fans. Former Jazz coach Frank Layden was appointed as emcee. Donny Osmond was to speak.Those involved in the arena deal that led to the groundbreaking said it came together after four months of negotiations with Sumitomo Trust and Banking Co., Ltd. That followed some 12 months of attempting to convince other financial institutions to bankroll the 20,400-seat arena that would help ensure that the Jazz remain in Utah. The Acord Arena at the Salt Palace has become too small.
Ninoos Benjamin, vice president of Sumitomo Trust's Los Angeles agency, told the Deseret News that it was not Miller who first asked Sumitomo Trust and Banking to finance his project. It was the bank that first contacted Miller.
Almost a year ago, after a tip from a local investment firm, the wholesale bank sent a letter to Miller proposing to help finance his project. At the time, he was negotiating with a Dutch bank and didn't respond. When the Dutch bank deal fell through, negotiators started talking to Sumitomo last December, said Benjamin.
Utah connection
Miller's representatives are glad they ended up across the table from Benjamin. It turns out Benjamin was an immigrant who graduated from the University of Utah. It was his experience in Utah that prompted him to promote the deal that was officially consummated last week.
"The project was really supported by Mr. Benjamin. It would have been a little more difficult if we would have worked with someone who knew nothing about Utah," said Bob Hyde, vice president of finance with the Jazz.
Benjamin also came to believe Miller was a good risk.
"Larry Miller is meticulous and successful. He has a strong sense of the local community. We found it most desirable because he is very resourceful and very reasonable," Benjamin said. "He had the vision."
The bank, whose assets of about $200 billion rank ninth in the world, has granted a $66 million loan that allows a two-year construction period, then converts to a five-year loan following the completion of the construction project. Miller expects to follow a strict construction schedule to complete the arena by October 1991.
Benjamin said the financial deal for the arena is not connected any way to Miller's other business ventures, including his car dealerships.
"The project will stand alone. Legally, it will have no connections to his other businesses," Benjamin said.
The financial deal for the arena was influenced by the trend of some Japanese firms to start investing in areas outside major financial markets, Benjamin said. Sumitomo Trust, one of more than 130 firms under the Japanese conglomerate umbrella of Sumitomo Group, has helped finance a new arena for the Minnesota Timberwolves, another NBA team.
The bank loaned $50 million for the $94 million project, according to Scott Johnson, Timberwolves media relations assistant.
"Intimate feel" in arena
Franklin T. Ferguson, partner in charge of arena design with FFKR Architects, said that the mammoth arena will have an "intimate" feel. He said the courtside proximity of the seven levels of seats will provide a extraordinary "home-court advantage."
The building also will include 56 luxury suites, of which 19 have been leased, and commitments have been made for an additional 11. Suite prices range from $40,000 to $95,000 per year.
The arena would house Jazz basketball games, Golden Eagles hockey matches, entertainment events and possibly Olympic ice skating and hockey competition, if the International Olympic Committee chooses Utah for the 1998 Winter Games.
Construction schedule
Tom Mabey, president of Bountiful-based Sahara Construction, said that he expects to begin excavation at the site within the next two weeks. Excavation - down to a depth of 30 feet - could take up to 10 weeks. Then the concrete shell is scheduled to appear on the northeast end of the building. A large hole in the southwest end of the building will be the last to be closed, allowing equipment access to the interior of the arena.
It will be the largest building Sahara Construction ever has built, Mabey said.
With a tight schedule, construction crews may work three shifts a day at times during construction. Bad weather also could play a role, Mabey said.
"We just can't absorb delays . . . . A long, cold, wet winter could put a kink in things," he said.
Will cost less than other arenas
Ferguson said the Jazz arena may cost less to build than others planned or under construction for other NBA franchises because of a no-frills design, Utah's right-to-work laws and the fact other arenas incorporate such things as moveable ice rinks and parking garages.
"This building is not a monument. (It) will be very austere. The building will be nice and functional," said David Allred, Jazz spokesman.
The Salt Lake City arena also is being helped by the city's redevelopment agency, which will donate $20 million worth of land and site improvements. Included in those improvements are parking spaces for an estimated 1,400 to 1,500 vehicles. One 850-space parking terrace will be located west of the Triad Center. The agency still needs to acquire land for another terrace or parking lot, said Richard Turpin, the city's RDA interim director.
Turpin said that paperwork was being mailed around the country to obtain title on five acres on the north half of the arena site and the area for the parking terrace from Travelers Insurance Co. and Triad. The agency already owns the south half of the arena site. After title is obtained, the RDA board is expected to issue $20 million in bonds within the next two months.
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Utah not alone
NBA arenas proposed or under construction:
City Capacity Est. Cost Est. Finish
Phoenix 19,400 $84 million Sept. 1992
Minneapolis 18,500 $94 million October 1990
Seattle 18,000-20,000 $100 million October 1993
Salt Lake City 20,400 $66 million* October 1991
*Does not include $20 million donation of Salt Lake City Redevelopment Agency for land and improvements.