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State weighs $25-million plan to revive The Dunk

The deteriorating arena would be merged with the Rhode Island Convention Center Authority, getting a major overhaul in the process.

BY W. ZACHARY MALINOWSKI

Journal Staff Writer - Sunday, March 14, 2004

The state is poised to take over management of the Dunkin' Donuts Center and invest $25 million in renovating the state's largest sports and entertainment venue.

"We're close," said Providence Mayor David N. Cicilline. "I think everybody recognizes that this needs to be done."

051903-Prov016.jpg

"The Dunk" -pic by ME!

The deterioration of the building, and its continuing financial woes, have been a dilemma for advocates of downtown development for several years.

Talks concerning the renovations of the 32-year-old building intensified last fall, when a group of business and civic leaders formed to determine what was needed -- and at what cost.

Officials working on the deal say they are confident that a renovated center will start making money, something the center hasn't accomplished since the early 1990s.

The current plan would allow the Rhode Island Convention Center Authority to merge with the Dunkin' Donuts Center. Officials say they believe the merger would enable the center to attract larger shows and conventions and streamline operations of The Dunk and the Convention Center.

In recent months, Tim Welsh, coach of the Providence College basketball team, and Providence Bruins owner Frank DuRoss have said that without a major overhaul, it will be difficult for them to field competitive teams.

Last year, rock star Bruce Springsteen took the stage and told the sold-out crowd that The Dunk was one of the oldest buildings on his 126-date world tour.

TWO OPTIONS were considered but quickly dismissed.

Jim McCarvill, executive director of the Rhode Island Convention Center Authority, said that razing the building and replacing it with a new arena would cost more than $100 million.

An on-campus arena at Providence College would cost between $40 and $50 million, according to PC Athletic Director Robert Driscoll.

He said that would be a huge cost for the school, and would in effect shut down The Dunk because the Friars pay between $750,000 and $1 million a year to rent the building.

The committee, which comprises representatives from the Convention Center Authority, Providence Civic Center Authority and Dave Gavitt, former PC basketball coach and commissioner of the Big East Conference, agreed that renovating the building was the most viable option.

Governor Carcieri also supports the plan. His point man on the merger is Donald A. Duffy, chairman of the Convention Center Authority.

BUT OBSTACLES remain.

State and city officials are trying to hammer out the details that would allow the Convention Center Authority to assume control of the building and get approval from the state to float $25 million in bonds to pay for the upgrades.

The bond issue would require approval from the General Assembly.

Also, the city still wants some say in what happens because a city bond issue -- not a statewide bond -- paid for the building in the early 1970s, and the city has poured millions of dollars into the building over the years.

Cicilline said The Dunk owes the city between $4 and $5 million for money borrowed from the city. If the state can assume some, or all of that debt, Cicilline said, it would only make sense that the city would surrender some of its control.

"We have to arrive at governance, ownership and management structure that makes sense," said Cicilline. "We are making progress. I'm confident that we will get there."

Cicilline said he would like see a deal signed and sent to the General Assembly by the end of the fiscal year that ends June 30.

IN RECENT WEEKS, architects from St. Louis and Kansas City have toured The Dunk to assess the building. They have determined that the building is structurally sound, but in need of a major makeover.

Officials from the Convention Center Authority, Civic Center Authority, PC and others involved in the project said the building needs a new heating and air-conditioning system, new seats, a new video scoreboard with replays, and new concession stands and restrooms.

The concourse also may be widened to ease crowding outside the concessions and restrooms.

McCarvill, the executive director of the Convention Center Authority, said that he would like to see an enclosed walkway that would connect The Dunk to the Convention Center.

The connection would allow the building to simultaneously host events and give fans at The Dunk access to restaurants at the Westin hotel and the Providence Place mall.

The officials studying The Dunk also are looking at the possibility of building 10 to 20 luxury boxes that would be sold for about $40,000 each.

Seating capacity also might be increased, but by no more than 1,000 seats, bringing the total to about 14,000.

A RECENT TOUR of the building shows that it's functional, but deteriorating. Many seats are broken and they have been replaced with parts that don't match. Cracks and chips are visible throughout the concrete floor.

The visiting locker rooms and dressing rooms for entertainers look more like junior high school showers.

Lawrence J. Lepore, The Dunk's executive director, said the air- conditioning and icing system is in constant need of repair. He said the big problem is that the companies that built the original parts no longer exist, meaning that the pricey replacement pieces have to be custom made at a higher cost.

Lepore says that the building is operating on one air-conditioning system and needs about $24,000 to get the second one repaired. He said monthly utility costs -- heating and air conditioning -- run about $100,000. Upgrades to the system alone could cut costs by between $20,000 and $30,000 a month, he said.

Officials at the Convention Center Authority and The Dunk said that the renovations also will include a makeover of the drab brown exterior. The plan is to keep the building open by scheduling the work in phases over three years.

Driscoll, the PC athletic director, was hired in January 2002 after spending about 15 years at the University of California at Berkeley. He knew a lot about Providence College basketball. But, he wasn't prepared for The Dunk.

"I've been in hundreds of buildings around the country," said Driscoll. "Unfortunately, The Dunk is probably the poorest maintained of all of them. I can't believe the kind of success [PC basketball] has had with the kind of building we have."

DRISCOLL SAID that he would like to see the building feature more black, silver and white -- the colors of the PC Friars. He said the building needs an ambiance to make it feel more like the home of the school's basketball program.

Driscoll hopes that the success of this year's team, which may be one of the best in the past 30 years, despite its recent three-game losing streak, will be a catalyst for spurring the renovation effort. He pointed out that PC plays in the Big East, one of the country's premier basketball conferences. In 2005, the conference will expand with the addition of Louisville, Marquette, Cincinnati, DePaul and South Florida.

A spruced-up building will make the basketball program stronger, Driscoll said. He said the improvements would attract better players that would result in better teams and bigger crowds.

"If you can't keep it going, we all lose," he said.

Driscoll said that two prized basketball recruits that PC had wooed had recently settled on Michigan and Pittsburgh, in part, because both schools offered better basketball facilities.

THE DUNK, formerly known as the Providence Civic Center, has been a big part of the Rhode Island landscape for more than three decades. In many ways, it brought the nation's smallest state into the big time.

In 1973, the first full year it opened, the PC Friars of Ernie DiGregorio and Marvin Barnes made it to the NCAA Final Four in basketball.

The Boston Celtics once played some home games there, and Marvin Hagler and Vinny Pazienza fought for world championships in the building.

The Civic Center was a stop for the world's greatest entertainers. Elvis Presley, Rod Stewart, Sting and Springsteen have played the building.

Over the years, Frank Sinatra made several stops in Providence. Whenever he appeared, state police detectives would scan the crowd for organized crime figures who had gotten choice seats near the stage.

The success of the building made many forget about the struggle to get it built. Talk of a civic center began in 1960 along with discussions of a Downtown Master Plan. In the 1960s, Mayor Joseph A. Doorley made the civic center a priority. Doorley and then-Gov. John H. Chafee agreed to build an $8-million, 10,000-seat arena.

The November 1968 ballot contained two separate bond issues -- one for state voters and one for Providence voters. City voters approved the bond by a comfortable margin. State voters, however, defeated the referendum.

The next year, Doorley ordered a $6-million bond issue that the city voters approved. Still, the city needed a total of $13 million.

In 1971, city voters approved a $7-million bond that covered the rest of the arena.

City officials tried to get then-President Richard M. Nixon to drop the puck for a pro hockey game on Nov. 3, 1972. Nixon declined, but the puck dropped anyway, the first of thousands of events that entertained generations of customers.

THE CIVIC CENTER had an impressive run for about 20 years.

In terms of booking concerts, 1978 remains the greatest year in the building's history when it hosted 52 concerts. The worst year was 1996-97 with just four musical shows.

Over time, the building fell into disrepair and became known as a dumping ground for political patronage jobs. A 1997 study found that the center was poorly managed, running up annual deficits of $1 million between 1992 and 1996.

There also has been a history of labor disputes involving the building's 40 full-time and about 400 part-time workers.

In 1997, the city hired a private Philadelphia-based firm, Aramark, to manage the building. Slowly, the building started to book more acts.

In 2001, the naming rights to the arena were sold to Dunkin' Donuts, a 10-year deal that reduced the annual deficit to about $600,000, according to city officials.

Last spring, Joshua Teverow, chairman of the Civic Center Authority, stepped down amid reports that authority members received free tickets to concerts and sporting events.

The concert business also got tougher. Providence was competing with the Worcester Centrum, Boston's Fleet Center and Foxwoods Resort Casino for top acts. The Tweeter Center, an outdoor concert center in nearby Mansfield, Mass., has grabbed most of The Dunk's summer shows.

A few months after Cicilline took office in January 2003, he sought to straighten things out at The Dunk. One of his first moves was appointing Bernard V. Buonanno as chairman of the Civic Center Authority.

Buonanno, a lawyer and sports enthusiast with strong political ties, set out to make The Dunk run more efficiently. He renegotiated the terms of a 23-year lease that former Mayor Vincent A. Cianci Jr. gave the Providence Bruins in 1992.

Buonanno learned that the P-Bruins paid just $500 per game to rent the building, compared to $30,000 to $40,000 per game that Providence College pays to play basketball.

Over the past 10 years, the P-Bruins annual attendance has averaged 5,000 for 40 games, while the PC Friars have averaged 8,000 for 18 games.

Buonanno said the owner of the P-Bruins was gracious enough to rework the contract so that the team has begun to pay more to use the building this season and in future years. The first phase of the P-Bruins' contract expires in 2007 and the team has a three-year option to remain in the building. In 2010, the P-Bruins have a five-year option to stay.

The team will remain in Providence, Buonanno said, as long as major improvements are made to the building.

DESPITE the problems and wear on the building, The Dunk has experienced a bit of a resurgence. Cicilline and Lepore, the building's executive director, said that The Dunk will book about 130 dates, including 19 concerts, for the fiscal year that ends June 30. That's the most activity inside the building in 12 years.

Cicilline said the city has conducted studies that show The Dunk generates about $60 million a year in revenue for the city through hotel rooms, restaurants, parking and other related activities.

"It's really, really doing well," he said. "It's a valuable asset."

Lepore and officials from the Civic Center and Convention Center authorities believe that a refurbished Dunkin' Donuts Center will generate more business. Better acts will come to the city and it's possible that an Arena Football League team or pro woman's basketball team might be interested in calling Providence home.

They also believe that Providence can once again host first-round games in the NCAA men's basketball tournament. In 1996, the last time the tournament came to Providence, visitors spent about $10 million in the city.

Lepore said there is a good chance that Providence can host the NCAA regionals again in 2008 as long as the building gets a major face-lift. Without the improvements, he said, there's no chance the tournament will return.

Cicilline said he wants to make sure a city-state merger will best benefit the taxpayers and his financially troubled city which is projected to have a $39-million deficit in the next fiscal year. He said The Dunk and land around it is worth about $38 million.

Providence City Council President John J. Lombardi said he has not been apprised of the negotiations between the city and state. He understands that the building needs a makeover to remain competitive in the sports and entertainment business.

Lombardi believes the council would support a reasonable proposal. He's eager to see one.

"All the parties need to sit around the table, leave their egos outside the door and get something done," he said. "We've got to do this sooner rather than later."

Buonanno is optimistic that the city will soon strike a deal with the state. In the meantime, he said several possible benefactors have expressed interest in the project.

"It's got to happen," he said. "Hopefully, it's going to happen with the Convention Center Authority."

From The Providence Journal

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I wish there were a Dunk, in the Dunk. It never fails, everytime I walk by, I want an ice coffee.

Luckily in Rhode Island there are two Dunkin Donuts on every corner. :D

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Rhode Island also has some of the finest diners and breakfast joints and greasy spoons.

Yup, there's one steps from my house. I've considered going in my slippers.

I'm actually going to a P-Bruins game at the Dunk next week. It'll be my first time in there.

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Owner of FleetCenter interested in the Dunk

Delaware North of Buffalo, N.Y. might pursue a sale or lease -- and a rehab -- of the dilapidated Dunkin' Donuts Center.

BY GREGORY SMITH

Journal Staff Writer - Thursday, May 6, 2004

PROVIDENCE -- A merger of the city-owned Dunkin' Donuts Center with the state-owned Rhode Island Convention Center has been under negotiation for months.

The primary goal is to find the money to partially rebuild or even expand the worn-out Dunkin' Donuts Center.

But there is an alternative to a merger, according to the administration of Mayor David N. Cicilline: A lease or sale of the Dunkin' Donuts Center to a private company that would pay to fix it up.

John C. Simmons, city director of administration, acknowledged the administration has discussed with Delaware North Companies the possibility of Delaware North helping to finance improvements at the Dunk.

Delaware North, of Buffalo, N.Y., which is one of the nation's larger private companies with more than $1.3 billion in annual revenues, owns and operates the FleetCenter in Boston and Sportservice, a food-and-beverage services company that has a concession at the Dunk.

Jeremy M. Jacobs, chairman of Delaware North, owns the Boston Bruins professional hockey team. The Providence Bruins, who along with Providence College are the Dunk's major tenants, are affiliated with the Boston Bruins but are separately owned.

Cicilline said in an interview on the show, Newsmakers on Channel 12 (WPRI) on Sunday,"There are private operators and investors who are interested in that facility. That's in the mix."

The mayor nevertheless continues to emphasize that a merger or at least a working agreement between the arena and the convention center is preferable to a sale or lease of the Dunk.

"Either way we'll reach the deal that's best for the residents of the city," Cicilline said.

Last month the mayor said he was close to a deal with Governor Carcieri on the merger. The state would spend $25 million to renovate the Dunkin' Donuts Center and it would be jointly operated with the Convention Center under one governing body.

David A. Duffy, chairman of the Convention Center Authority, said yesterday that negotiations are "progressing" and he is "very positive" that an agreement will be reached.

He said representatives of the city and the Convention Center Authority briefed senators and General Assembly staff members on the talks last week.

As for the possibility that the city could have a private company renovate the Dunk, Duffy said the Cicilline administration has said throughout the negotiations with the state that the city has options.

Asked whether a sale or lease would be a "fallback" option for the city if the merger fails, Simmons rejected that word. He said this week that a sale or a lease would be an "alternative."

One option is a sale-leaseback, in which title to the arena would go to a private company with the understanding that the city would regain ownership in the future. The city did that with the Municipal Wharf, which is owned now by a company called ProvPort.

Under that scenario, a buyer or lessee would profit from the operation of the arena.

A city official, according to Simmons, has discussed with a member of the Jacobs family, which owns Delaware North, the possibility of an investment in the Dunk. Simmons declined to identify the official or the family member.

The discussions have remained "fairly general," Simmons said.

Chris Snow, general manager of Sportservice at the Dunk, declined comment on Delaware North's possible interest in helping to finance renovation of the Dunk.

He referred questions to Wendy A. Watkins, vice president for corporate communications and public relations at Delaware North, who could not be reached for comment.

In working toward a merger deal, city and state officials are trying to iron out differences among seven unions representing employees in both buildings who have varying compensation and work rules.

"It's a complicated transaction among the parties," said Simmons, who is deeply involved in the negotiations.

Prominent among the numerous issues that would have to be worked out would be the handling of the food and beverage service. At the convention center, employees provide that service, but at the Dunk, Sportservice has a contract to do it.

Lawrence J. Lepore, executive director of the Dunk, said the contract has a buyout clause.

Representatives of the mayor and Carcieri are working to rough out a deal that can be presented to the General Assembly and the Providence City Council in time for the legislature to approve the necessary financing during its session.

Simmons said that deadline appears to be achievable.

"Ideally, running the two facilities together is the better of the two proposals," Simmons said of a merger versus a lease or sale.

The advantages of coordinating the booking of events -- the boat show recently used both buildings at the same time -- and the efficiencies of joint management and comprehensive labor agreements make a merger more appealing, according to Simmons.

The Convention Center would be able to attract larger events, officials contend. And a remodeled Dunk, they say, would bring in more revenue.

For the city, which lacks the money to fix the Dunk and to maintain it, a state takeover provides financial relief. The city has to pump money into the arena every year to keep it operating.

"It is generally perceived that this is the right decision at the right time," Simmons said of the merger. "It does put together two facilities that would be enhanced" by the combination.

From The Providence Journal

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Private bids welcome for civic center

Providence Mayor David N. Cicilline expects to have three serious offers for the aging facility within two weeks.

BY W. ZACHARY MALINOWSKI

Journal Staff Writer | Thursday, July 1, 2004

PROVIDENCE -- Mayor David N. Cicilline has grown tired of waiting for a state bailout of the deteriorating Dunkin' Donuts Center.

Frustrated with the General Assembly's failure to approve a deal that would have merged The Dunk with the Convention Center Authority, Cicilline said yesterday that he will entertain with "renewed vigor" private offers for the state's largest sports and entertainment center.

The city expects to have three serious offers in hand within the next two weeks.

"We can't wait," Cicilline said. "The time is now. The facility requires some capital improvements that need to be made. We will not wait a year to do that. We cannot wait a year."

The surprise announcement comes just weeks after officials from the city and Convention Center Authority reached a tentative agreement to merge The Dunk and convention center and pour about $40 million in bonds to overhaul the 32-year old building.

The agreement also would have connected the two downtown buildings with a skybridge that would have allowed the city to host larger and bigger conventions.

Governor Carcieri supported the merger.

To consummate the deal, the General Assembly would have had to approve the bonds authorized by the Convention Center Authority. Under state law, the legislature has to approve most types of borrowing by public and quasi-public agencies of $4 million or more.

On June 7, representatives from the city and convention center discussed the tentative agreement at the State House with House Speaker William J. Murphy, D- West Warwick, Deputy House Speaker Gordon D. Fox, D-Providence, and House Finance Committee Chairman Steven M. Costantino, D-Providence.

But that's as far as it got. Neither the House of Representatives nor the Senate ever heard testimony about the proposal in the final days of the General Assembly session that ended early Saturday.

It's possible that the General Assembly could call a special session to consider the merger, but there has been no indication that that might happen.

Cicilline and David A. Duffy, chairman of the Convention Center Authority, said they would welcome the special session because they both feel the proposed merger is the best deal for the city, state and taxpayers.

"I would certainly be delighted if they took up this deal," Cicilline said. But, he added, he's not optimistic because the General Assembly does not have "a will to do it."

Larry Berman, spokesman for House Speaker Murphy, said that there will be no special session on the merger. "It's not going to happen this year," he said.

Costantino, the House Finance Committee chairman, said that no action was taken earlier because the proposed merger was not brought to the House leadership until late in the legislative session. He said that the General Assembly was consumed with the budget, drafting a referendum on a proposed vote for a casino in West Warwick, and looking for ways to help finance a proposed hotel at the site of the vacant John E. Fogarty Building across from the convention center.

"It was too large of a transaction to come to us a couple of weeks before the session ended," Costantino said.

Officials at the convention center and city met for eight months, hammering out an agreement to merge the operation of the city-owned arena with the convention center. A major stumbling block was the transfer of power. City officials were concerned about relinquishing total control to the convention center. In the end, Duffy, the convention center chairman, said they forged an agreement that would allow the convention center to expand beyond its nine members to give Providence more representation.

As the board exists today, Providence has two representatives. Duffy declined to say how many board members would be added after the merger.

Costantino said that he was hoping to meet with city and convention center officials in September and revive the proposed merger when the General Assembly convenes in January. He said he's sorry that it wasn't addressed before the legislature broke last weekend.

"I was a little disappointed," Costantino said. "I had given out a message to the parties involved to give this to us early. I think if we have more time to look at this, ultimately, it might be a better deal."

James McCarvill, executive director of the Convention Center Authority, said that the state has spent about $200,000 for Ellerbee Becket, a Minneapolis-based architectural firm, to draw up design renovatations for The Dunk. He said that he is expecting detailed plans for the arena by July 15.

In the past, officials at the convention center and The Dunk talked about replacing the arena's 13,000 seats and fixing the cracks and chips in the concrete floor. The building also needs a new air-conditioning system and a makeover of its drab brown exterior.

A skybridge between the convention center and The Dunk also would give fans access to restaurants at the Westin hotel and Providence Place mall. Another possibility under the proposed merger was adding 10 to 20 luxury boxes that could be sold for about $40,000 each.

Officials at Providence College, including basketball coach Tim Welsh, have been critical of the building, saying that it must undergo extensive improvements in order to keep the PC Friars a national basketball power.

Robert Driscoll, PC's athletic director, has said that the Friars play in one of the most poorly maintained arenas in the nation.

"I've been in hundreds of buildings across the country," said Driscoll. "Unfortunately, The Dunk is probably the poorest maintained of all of them. I can't believe the kind of success [PC basketball] has had with the kind of building we have."

Yesterday, Cicilline refused to name or provide specifics about the proposals from the three private firms interested in The Dunk. He also would not say whether the firms are interested in buying or leasing the building.

The Dunk is assessed at about $42 million and Cicilline said it owes the city between $4 million and $5 million. He said that if the city works out a deal with a private firm, there is little hope that The Dunk would be connected to the convention center.

"There would be no assurances that that would happen," he said. "My responsibility is to protect that facility and protect the taxpayers of Providence."

From The Providence Journal

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Actually, Dunkin Donuts just recently aquired the naming rights to the Civic Centre. Naming rights only went out to bid a few years ago, before that it was simply called The Civic Centre. Locally, everyone is aware that the condition of The Dunk has no reflection on the Dunkin Donuts company. In fact they actually receive some degree of community good will in the fact that the money that Dunkin Donuts paid has allowed for some minimal improvements in the centre. And there are lots of local tie ins for discount tickets and community events that create further goodwill. Dunkin Donuts also gets excellent advertising in the fact that The Dunk backs up right against I-95 and there is a giant sign facing the highway that says "Dunkin Donuts Centre." Plus every event that is advertised in any media has the Dunkin Donuts name on it, it's good advertising for the company.

It could become a detriment for the company if more convention events were held in the centre and more non-locals were exposed to the condition of The Dunk. However, the major renovations that the city is trying to find funding for are going to be needed before The Dunk can co-host more conventions with the neighbouring Convention Centre.

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Private partners sought for Dunk

Mayor David N. Cicilline hopes to attract investment and ideas for making the arena profitable.

BY TOM MOONEY

Journal Staff Writer | Wednesday, September 22, 2004

PROVIDENCE -- Determined to save the deteriorating Dunkin' Donuts Center, Mayor David N. Cicilline said yesterday that the city is officially seeking proposals for new management and private investment offers, including a possible sale.

Cicilline has been talking about taking some action at The Dunk since the end of June, when a tentative agreement to merge the city-owned arena with the adjacent, state-owned Rhode Island Convention Center died.

Officials had met for eight months to hammer out the deal, which called for spending about $25 million to overhaul the state's largest sports and entertainment center.

But the deal fell through after the General Assembly adjourned for the session without approving the needed issuing of bonds.

Yesterday, the city moved ahead with the formal procedure of seeking requests for proposals.

Those proposals, Cicilline said, will hopefully attract new management ideas to make the center more profitable, as well as companies willing to invest in the 32-year-old building.

"There is a tremendous amount of private interest in that facility," Cicilline said.

But Lawrence Lepore, executive director of the arena, said it will be difficult to find an outside company willing to put up money for needed improvements without some subsidy from either the city or the state.

Lepore said there are companies willing, for instance, to build luxury boxes and club seats in the arena, or to improve concession stands, because they know they will see a return on their investment. "But there would have to be some type of investment from the city or the state," he said.

Some companies might be interested in a long-term lease, but Lepore said few would likely want to buy a building that annually runs a deficit of about $800,000.

The tentative agreement that officials from the city and the Convention Center Authority had reached called for building a sky bridge to connect the two downtown buildings, allowing the city to host larger conventions and giving visitors access to the mall around the corner.

If the city works out a deal with a private firm, there would be no guarantee that The Dunk would be connected to the convention center, Cicilline said in June.

The call for proposals also includes management and operation of the Fleet Skating Center.

The mayor said "we have the responsibility to ensure that these facilities operate in a cost-effective way. As my administration tries to do more with less, we are focused on making smarter management decisions about how we spend taxpayer dollars."

Proposals for the Dunkin' Donuts Center should be submitted to the Civic Center Authority by Nov. 8. Fleet Skating Center proposals should be submitted to the Board of Contract and Supply by Nov. 20.

From The Providence Journal

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Carcieri, Cicilline renew pitch to merge Dunk with convention center

Whither the Dunkin' Donuts Center - A source of Civic pride?

BY GREGORY SMITH

Journal Staff Writer | November 15, 2004

Dunk.jpg

Journal photo / Glenn Osmundson Fans leave last night after watching the Providence Bruins, which play their home games at the Dunkin' Donuts Center.

PROVIDENCE -- Governor Carcieri and Mayor David N. Cicilline are knocking on the door again at the General Assembly, shopping the idea of merging the city-owned Dunkin' Donuts Center with the state-owned Rhode Island Convention Center.

With the private sector showing little interest in paying to renovate the deteriorating Dunkin' Donuts Center, a merger and a capital investment by the state are the chief executives' answer to what ails The Dunk.

Legislative leaders hesitated last summer when the governor and mayor proposed about $25 million in borrowing to upgrade The Dunk and connect it to the convention center with a pedestrian bridge.

The proposal came too late in the Assembly's 2004 session and was too big to be handled quickly, the leaders said.

An impatient Cicilline said he could not wait a year to do something about the badly needed improvements at The Dunk, and he advertised for private-sector interest in managing, renovating, leasing or even buying the city-owned arena. He said he was not optimistic that legislators would seriously consider the merger/investment proposal.

Two bids were opened last week, and John C. Simmons, city director of administration, acknowledged that neither contained the kind of capital investment for which the city had hoped.

The Dunk loses money on an operating basis and experts say the 13,000-seat arena needs millions of dollars in improvements, including the installation of premium seats that would entice patrons and boost revenues.

The needs include a new roof; updated seating and scoreboards; repair or replacement of electrical systems and heating, ventilation and air-conditioning systems; and an exterior facelift.

On Friday, Cicilline sounded more positive about the merger's prospects than he did over the summer. Negotiations with Assembly leaders are under way and "there seems to be continued interest" he said.

The bidders are:

SMG, of Philadelphia, a corporate affiliate of Aramark, a multibillion-dollar services conglomerate. Another Aramark affiliate has a contract to manage The Dunk, and SMG itself has the management contract at the convention center.

SMG said The Dunk must have $8.4 million in repairs and improvements over four years and it laid two options on the table, one of which was a plain-vanilla offer to manage the arena.

The alternative was a maximum $1-million capital infusion, to be added to whatever capital dollars the city and/or state would spend. SMG would manage the arena and accept deferred payment of $485,000 in fees the Providence Civic Center Authority owes its management company. The authority is an arm of city government that oversees The Dunk.

The company suggested the construction of four party suites and 198 "ledge seats" where the restaurant or press box are now located. SMG estimated that the installation of those premium seats could generate a net increase in revenue of $419,000 to $738,000.

Simmons said ledge seats apparently are seats whose occupants are served by waiters and waitresses.

Delaware North Companies, of Buffalo, N.Y., which co-owns and operates the FleetCenter arena in Boston and Sports Museum of New England and is developing the site of the former Boston Garden. It has 30,000 employees in five nations and more than $1.6 billion in annual revenues.

Its affiliated company, Sportservice, has the primary concession at The Dunk for food, beverages and novelties.

Delaware North did not propose to make a capital investment of its own. It merely suggested that the city get back to the company after it had worked out with the state how much capital investment the governments would make.

By setting aside a portion of The Dunk's annual revenues, a modest capital fund could be accumulated, it noted.

Neither bidder showed any interest in a lease or purchase of the arena, which the city built on its own in 1971-72 after Rhode Island voters refused to appropriate construction money.

For years, the Providence Civic Center, as it was known until the naming rights were sold to Dunkin' Donuts, always seemed to be busy with a smorgasbord of events. It was a premier New England concert venue.

But a chronic slump in the nationwide concert business and new competition from other entertainment venues such as the Tweeter Center, in Mansfield, Mass., and Foxwoods Resort Casino, in Connecticut, undermined the facility.

This year the Cicilline administration also courted interest from Global Spectrum, the company that manages the Ryan Center at the University of Rhode Island. But state officials forbade Global Spectrum to do business with Providence, apparently because the Ryan Center and The Dunk compete for concerts and other bookings.

Carcieri spokesman Jeffrey Neal said he was not aware that Global Spectrum was precluded from bidding.

The state has aggravated The Dunk's plight, first by building the convention center and then by building the Ryan Center. The convention center siphoned off some of the trade shows and exhibitions that used to be staged at The Dunk, and the Ryan Center poses a new threat.

Taking an active interest in the outcome of the merger campaign is Providence College, whose basketball program is one of The Dunk's primary tenants and whose officials are restless with The Dunk's condition.

PC basketball coach Tim Welsh has hinted that he will leave if the PC Friars' home is not drastically improved with features such as a sophisticated video scoreboard that appeal to athletes considering PC enrollment. PC is reluctant to shoulder the cost of building its own on-campus arena.

As competition sharpens among venues, a team effort would benefit the convention center as well as The Dunk, according to the case being made for the merger.

The convention center would gain access to the larger hall at The Dunk, enabling the state to attract larger, more profitable events, and joint management would increase efficiencies at both venues, according to their argument.

Some skeptical legislators view the merger as a state bailout of the city, but the mayor touts The Dunk as an "incredibly important economic engine" for all Rhode Island. It draws 700,000 people a year, and he said most of the benefits, in terms of income and sales taxes, flow to state government.

Cicilline's mathematics are these: The city's contribution to the merger would be The Dunk itself, which a real-estate appraisal company has valued at $42 million. If the state's capital expenditure is deducted from the $42 million, it can be said that the respective city and state contributions are roughly equivalent.

The governor and the mayor can make a good case for the merger and state investment, said Neal, the Carcieri spokesman, because it would stimulate economic growth.

The PC Friars and the Providence Bruins professional hockey team, which also makes its home at The Dunk, are statewide assets, and they need a refurbished facility in order to flourish, Neal said.

The pressure is on the mayor and the Civic Center Authority to come up with stopgap as well as long-term solutions. The current management contract at The Dunk expires in January.

More important than the contents of the bids from SMG and Delaware North are the companies' expressions of interest in The Dunk, according to Simmons. The bids constitute a starting point for negotiations regarding capital investment and other aspects, he said.

The Cicilline administration and the authority intend to negotiate with both companies as if there will be no merger, Simmons said. But they will craft a contract that would allow the winning bidder to be compensated for any capital investment it makes in case a merger eventually occurs.

As the result of complicated negotiations with labor unions, the city anticipates being able to convert The Dunk's work force from public employees to employees of the management company. Whether there is an early merger or an eventual merger, Simmons pointed out, that conversion would make it easier to integrate The Dunk's work force with that of the convention center.

With The Dunk's future up in the air, city officials have just had a bittersweet reminder of the arena's glory days. There was a run of big-name acts at The Dunk: Cher, Barry Manilow, Gloria Estefan, Sarah McLachlan and Bette Midler.

For August and September, The Dunk ranked 9th and 10th, respectively, in gross ticket sales among second-tier concert venues in the United States and Europe, reported Venues Today, a magazine catering to the concert hall and arena industry.

There are four tiers in the industry, with the second tier consisting of venues with 10,000 to 15,000 seats.

Earning a mention in the November issue of Venues Today is good because promoters take notice, said Lawrence J. Lepore, executive director.

From The Providence Journal

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Match made on Sabin Street

Wednesday, December 22, 2004

They stand right next to each other in downtown Providence, and yet they seem to offer each other the cold shoulder year after year.

The Dunkin' Donuts Center, formerly the Civic Center, is 32 years old, owned by the city, and runs an annual deficit. The Rhode Island Convention Center is 12 years old, owned by the state, and still paying off the bonds that brought it into existence.

Separately, they make holes in their owners' budgets, irritating taxpayers; together, they could help solve each other's financial woes and boost the city, state and region.

As any fool can see, they are made for each other.

And the idea of a marriage, or merger, of the Dunk and the Convention Center has re-emerged. Mayor David Cicilline made an offer to the Rhode Island General Assembly last year, but too late in the legislative session to have a chance. He now makes an offer again: The city would present the Dunk (which the city claims is worth $42 million) and the state would spend $21 million in improvements at a new, state-city facility. The mayor says the state and the city would each have a 50-percent ownership in the arena.

Readers should be aware that the city, of course, has every incentive to use as high a valuation as it can of the arena in any deal with the state: It needs money even more than the state does. Furthermore, readers should bear in mind the need for the taxpayers' interest to be protected in any deals that benefit the private organizations that regularly use the arena for games -- the Providence Bruins and Providence College.

They must be expected to chip in to cover some of the costs of a new and improved arena if they are to benefit from it.

In any case, what is not debatable is that the Dunk needs more and better seating, a new roof, new heating, electrical and other systems, and possibly a new exterior. It also needs some more seats.

If we can turn this ugly (or aging) duckling into a swan, and grab more and better events, it would help attract bigger meetings to its new partner, the Convention Center.

Both public facilities will stride hand-in-hand toward a sunnier future for the city, state and region.

That is a pleasant vision, of course, but one that in broad outline has been floating around for at least a decade. Its obvious good sense faced a major obstacle: the enmity, from 1994 to 2002, of Mayor Vincent Cianci and Gov. Lincoln Almond. The latter, when he was Rhode Island U.S. attorney, had prosecuted the former during part of his first mayoral stint, in the 1980s.

Now both men are gone. Their successors have promised to work together. A merger of the Dunk and the Convention Center is an idea whose time has come. It could take several forms, each with pesky details to work out, but leadership means solving tough problems, not easy ones.

The next stop is the Rhode Island General Assembly, which is expected to take up the future of the Dunk in the next session. We wish the legislative leadership well in crafting legislation that will enhance this necessary piece of the southeastern New England's public infrastructure.

From The Providence Journal

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Convention panel seeking state upgrades at arena

The Convention Center Authority pitches two proposals for renovating the city-owned Dunkin' Donuts Center, and a merger may also be in the works.

BY ANDREA L. STAPE and KEVIN McNAMARA Journal Staff Writers | March 9, 2005

PROVIDENCE -- Fixing the aging Dunkin' Donuts Center will require between $38 million and $58 million worth of upgrades, according to the Rhode Island Convention Center Authority, and it wants taxpayers statewide to foot the bill.

...

One, at a cost of $38 million, would include luxury boxes, locker room upgrades, a new food court and a new exterior paint job, according to James McCarvill, executive director of the Convention Center Authority.

The other, at $58 million, would also include revamping all the seats in the arena, adding a new box office and building a pedestrian walkway to connect The Dunk to the neighboring convention center, McCarvill said.

In both cases, renovations wouldn't be finished until about 2008. Taxpayers would be responsible for paying back the bonds until the renovated center started generating enough revenue to start making debt payments -- and that probably wouldn't happen until 2010, according to McCarvill.

...

Right now, with cracked floors, grimy seats, lagging technology and failing internal mechanics, The Dunk is losing money every year and can't compete with newer New England sports and entertainment venues, said Lawrence J. Lepore, its executive director. This fiscal year, The Dunk is expected to cost the city $780,000, according to Lepore. Last year it lost $425,000.

Improvement menu at the Dunk

...

In the meantime, McCarvill and representatives from the architecture and consulting firms will discuss in detail tonight the two tiers of renovations they are recommending for the center. House Finance Committee Chairman Steven M. Costantino, D-Providence, called the hearing to get an update on what the authority has been working on. The authority spent about $300,000 to come up with these plans.

...

A key part to both the $38-million and the $58-million plans are luxury sky boxes, McCarvill said. Built for about $150,000 each, they would seat 16 to 24 people and would sell for between $30,000 and $50,000 a year, he said. The price would include season tickets to Providence College basketball games and Providence Bruins hockey games. Box holders would have to buy tickets to concerts and other events.

About 20 luxury boxes would be built in two "pods" added to the outside of the building at a cost of about $4 million, McCarvill said. The sports marketing consultant has studied demand for the boxes, and estimates they will generate $650,000 a year in profit, McCarvill said. It will take about six years for the boxes to break even.

Continue reading at: ProJo.

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The projo posted an interesting article yesterday about the Dunkin' Donuts Center. While this is not new news they did mention they

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I'm not 100% opposed to the city and/or state owning The Dunk. If something new were being built now, I would be opposed to public funding/ownership. But Buddy built The Dunk, and we own it. Cicilline solicited bids from private enterprise to purchase it when the deal with the state fell through last year. He only got 2 bites, and they weren't thrilling.

However, there wasn't a Power Block on the table at the time. It may be time to fish for more bids. If we can't get a good price for it, I support the state taking it and putting money into it. We have to make sure it makes money though. If that means trying to attract another sports team (I mentioned WNBA and Arena Football as possiblities in the sports thread), then we need to court those people.

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You know, that paint job idea could be a message to the Power Block people. All we can do on our own is paint the thing, get someone to buy it from us, or else this is how it stays.

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Both those new sport teams could work. I just really dislike the Dunk and I am not sure 50 bills is going to make it good enough. I hate to see tax money going to waste becasue I do not feel the state does a good job running the building or arraction events. Same goes with attractions to the convertion center.

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Good point. I would be happy if someone torn down the darn thing and built something new.

If the powerblock group took control they would have a great way to draw people into both hotels plus he could make a sky bridge contecting not only to the convention center but also the hol.inn he's redoing.

With a hard working staff he could attract alot of hotel going people into this Dunkcener/ convention center.....

You know, that paint job idea could be a message to the Power Block people. All we can do on our own is paint the thing, get someone to buy it from us, or else this is how it stays.

<{POST_SNAPBACK}>

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Does anyone know if the Dunk is failing because the people running it just dont try to get events there, or is it really too small or expensive to maintain/run? It seems that when they have concerts there it does ok... maybe we need better management of the space and someone who will pack it more often, instead of having an event there only every few weeks.

I dont think it should be built or renovated with taxes either... Our money is being stretched thin enough... I already feel like residents of RI should be able to walk into any event unpaid since we built the damn thing.

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I've read that it ranks really high in attendance and shows for an arena it's size. Top 10.

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