The Anaheim City Council voted unanimously Tuesday night to award management of the Arrowhead Pond to a company owned by Broadcom Chairman Henry Samueli, a move that some say could jump-start the city's efforts to attract an NBA franchise and boost development in the area.
The deal with the high-tech billionaire's newly formed Anaheim Arena Management must still be approved by the court overseeing bankruptcy proceedings for the current Pond manager, Covanta Energy, formerly Ogden Entertainment.
But city officials said Tuesday that they are excited about bringing in a quality partner who will retain Pond employees, provide for a seamless transition and continue to protect the city's assets.
Under the terms of the deal, the Anaheim Arena Management will assume all operating costs and about $45 million in existing debt, which represents a roughly $100 million write-down in debt from construction costs and about $30 million in accumulated loss since the Pond opened 10 years ago.
Because annual debt service payments will drop from about $10 million to $4.5 million and the deal does not include a $3-million to $5-million annual management fee, Samueli's company -- and ultimately the city -- are expected to profit, city officials said.
Every year that the Pond exceeds $12 million in revenue, it must share 20% of revenue above that with the city.
The city has also built in an incentive for the management company to attract a second tenant to the Pond in addition to the Mighty Ducks: If one is found, the company's share of the split revenue would rise from 75% to 80%.
The Pond is considered one of the city's prized spots, a piece of the area near Edison Field called the "Platinum Triangle." The city hopes that it will one day be a transportation hub, the county's "downtown," with luxury apartments, shops and offices.
Anaheim has tried several times to attract an NBA team, and city officials said they continue to aggressively pursue any leads.