The Pond Has Its Ducks in a Row

Times Staff Writer

Before the Arrowhead Pond and the Mighty Ducks ever existed -- when there was no sports team in sight and no concert booked -- the city of Anaheim adopted a cliched mantra in pursuing its indoor arena: Build it and they will come.

In the 10 years since the 17,000-seat Pond opened, the mantra has been partly fulfilled. Hockey arrived, but a professional basketball team never materialized. And in a decade, the Pond’s management company accumulated about $30 million in losses.

But now the Pond may finally -- and suddenly -- be hitting its stride with a new management company owned by a high-tech billionaire; new events on the calendar, including the badminton world championships and a lacrosse tournament; and enough buzz to stimulate the city’s basketball hopes.


On Friday, Walt Disney Co. officials confirmed that prospective buyers are circling the Mighty Ducks. The suitors include the flashy Maloof brothers, who own the Sacramento Kings basketball team and are fresh off a high-profile fallout with Sacramento over construction of a downtown arena.

“If there’s anything left to accomplish at the Arrowhead Pond, it’s NBA basketball,” said Greg Smith, director of the city’s convention, sports and entertainment department. “In my opinion, it’s inevitable. It’s going to happen. It’s just a matter of time.”

Some say that if ever the timing were right, it would be now, with the financial stars starting to align.

The city hopes to transfer management of the Pond to the newly formed Anaheim Arena Management, a company owned by H&S; Ventures, which manages the investments and charitable interests of the Samueli family. Corona del Mar resident Henry Samueli, whose net worth is estimated at $1.1 billion, is the chairman and co-founder of Broadcom and once tried to take both the Ducks and the Anaheim Angels baseball team off Disney’s hands.

The city and the new management company are awaiting approval from a federal judge overseeing the bankruptcy proceedings for the current manager, Covanta Energy.

If the deal is approved, Samueli’s company will get management control of the Pond for a bargain -- $45 million -- while Covanta is still saddled with $70 million in construction debt.

Not only is the new management company expected to turn a profit more easily because its debt payments will drop by more than $5 million a year, but there remains no risk to the city’s general fund.

“It’s our goal to be profitable every year, including the first year,” Pond General Manager Tim Ryan said. Anaheim City Manager Dave Morgan agreed: “This clearly does enhance our ability to enjoy profit-sharing over the long term.”

That’s a far cry from initial financial prognoses, when city and Pond officials said they didn’t expect any significant profits for 20 years.

And with greater financial flexibility, new management may now be able to lure a second tenant, which will have to share parking, concession and advertising revenue with the Pond’s primary tenant, the Mighty Ducks.

Sports businessmen say the combination of Samueli’s company as Pond manager and the possible purchase of the Ducks by a family that already owns an NBA team is generating new excitement around the decade-old arena.

“The Pond is certainly looking up,” said consultant David Carter. “A number of very high-profile and successful people are willing to go out of their way to make it work. When you bring in these kinds of people with vision to really knock the cover off the ball, you’ve got a chance for that building to be reawakened to a very big area.”

Such prospects were only a dream more than 10 years ago, when Anaheim officials decided the city needed a larger and fresher venue for sporting and entertainment events than the tired Anaheim Convention Center, and another marquee besides Disneyland and Edison International Field.

At the time, Santa Ana had its own grand plans to build a new arena.

Former Anaheim Mayor Fred Hunter remembers the phone call from Los Angeles attorney Neil Papiano that launched the arena.

“He told me he had a client that had $100 million and they wanted to build an arena in the city of Anaheim,” Hunter recalled.

“I kind of shoot from the hip, and I said, ‘Well, let’s do it.’ ”

Before long, they were flying over the city in a police helicopter, scouting prospective sites.

Back then -- perhaps as now -- the timing was perfect. Ogden Entertainment, now Covanta Energy, wanted to enter the entertainment business. Its best move was to build an arena.

The company footed the cost of construction, totaling more than $100 million; the city provided the land -- and retained ownership of the arena. Even now, some city officials look back in amazement that they were able to work out such a low-risk deal.

“For the city to be able to pull that off without any major investment was pretty phenomenal,” Smith said. “Some cities obligate themselves for hundreds of millions of dollars.... I don’t think you’ll ever see a deal like that again.”

Ogden selected Arrowhead Mountain Spring Water as the title sponsor; the “Pond” was a natural with the arrival of the Ducks within months of the arena’s opening.

The investment, as it turns out for Ogden, was not a good one, with revenue to the company based on sports and concert ticket sales, parking and advertising-sign fees, concession sales and other income streams falling short of operating costs.

But by a different measure, the city proclaimed the Pond a success. New hotels, restaurants and corporate centers have all cropped up nearby.

Beyond that are the intangibles: Disney pushed forward with a second theme park; Edison Field underwent a renovation.

All of it has people like Mayor Curt Pringle anticipating a future with luxury apartments, more retail outlets, an entertainment center and maybe a high-speed rail line from Anaheim to Las Vegas. Pringle is one of the biggest proponents of a plan to redevelop the area around the Pond, a vision that will be unveiled next year as the city updates its general plan.

The fans embraced the early vision for the arena. More than a decade ago, at something of an unusual open house, prospective sports fans donned hard hats and toured what was then just known as the Anaheim Arena. They tromped through dirt, dodged forklifts and stepped around construction crews.

And when the seats were finally numbered and bolted down, and before Disney had even hatched the Ducks, many of those fans plunked down their money for season tickets and luxury suites.

They did it on faith because they believed in the dream, said city spokesman John Nicoletti, the former sales and marketing executive for the arena who sold a lot of the original suites.

“The promise,” he said, “was that the building was going to be something great.”

Newport Beach resident John Hamilton bought into the promise, purchasing season tickets for a hockey team that didn’t yet exist.

And 10 years later, Hamilton said he’s now waiting for the next promise to come true: basketball.