Why new arena is complex, critical component to Atlanta's NHL return

ATLANTA — One of the first people Frank Ferrara met when he came to the Atlanta area to help revive dreams of a return of a National Hockey League team to this sprawling southern city was former NHL player and local businessman Tim Ecclestone.

Ecclestone was known simply as ‘Coach’ to his friends and that is what Ecclestone became to Ferrara, who was the driving force behind the dramatic rise of Arizona State University as a Division-1 hockey team and the construction of Mullett Arena.

Ferrara is now the right-hand man to billionaire automative mogul Vernon Krause, the main investor in one of two groups hoping to land an expansion franchise and bring NHL hockey back to Atlanta for what would be an unprecedented third go-round.

Ecclestone regularly shared with Ferrara his contacts in the tight-knit Atlanta hockey community and his insights into the game. Ecclestone also shared his enthusiasm for the project and his belief that NHL hockey could and would thrive in Atlanta given proper ownership and a better arena location.

“He really was a bit of my window into what the local market is about,” Ferrara said.

The last time the two spoke they made plans to get together for dinner and, in a bit of fancy, the former player and coach asked Ferrara who he thought the new team’s first opponent might be on opening night in Georgia and what ideas Ferrara liked for a new name for an expansion team.

Ecclestone died at age 76 in March.

“He said, ‘I just can’t wait for opening night,’” Ferrara recalled. “He said, ‘People have been waiting so long for this.’

“I’m left with the feeling of how important this is to the ardent NHL fans there,” he added.

Ecclestone’s dreams of bringing the NHL back to Atlanta didn’t die with him, though, as Ferrara keeps them close as the Krause team tries to navigate the difficult path to an expansion team.

“We lost something we couldn’t afford to lose when he passed in early March,” Ferrara told Sportsnet in a lengthy interview. “When we pull this off, he will be with us in spirit.”

This is the human, the emotional side, of the expansion debate not just as it relates to Atlanta but all the other markets that are covetous of having an NHL team in their backyard.

As important as those narratives are, they don’t pay the freight. And there is much freight to be paid if NHL hockey is coming back to Atlanta.

Ferrara spent two decades working on the financial side with the National Football League and was lured to Arizona where he helped build Mullett Arena as the permanent home to the Sun Devils’ D-1 men’s hockey team. The arena was also home for two seasons to the NHL’s Arizona Coyotes before the team moved abruptly this off-season to Utah.

Several years ago Ferrara was approached by Krause, a self-professed diehard Atlanta Thrashers fan who wasn’t in a position to take a run at owning the Thrashers when they departed in the summer of 2011 for Winnipeg, about his dream of returning the NHL to the area.

He is in such a position now and is the main man behind a multi-billion-dollar project in Forsyth County, north of the city.

“He comes at this with the spirit of a fan, like me. He’s got a lot of passion for the sport in making it better,” Ferrara said of Krause.

“When I saw the project, I was more than intrigued.”

It seems almost certain the NHL is going to forge ahead and add teams to its current 32-franchise roster.

There are just too many opportunities and too much money at stake for the league not to.

Vegas paid an expansion fee of $500 million and went to a Stanley Cup Final in its first season, 2017-18.

A couple of years later, Seattle paid $650 million for the right to join the NHL club and three seasons (and one playoff appearance) later, the team is a roaring success.

Financial experts agree the price tag for Team 33, which would make the NHL the most populous of all four major sports leagues, will be in excess of $1 billion.

Deputy commissioner Bill Daly told reporters at the recent NHL player media tour in Las Vegas that he doesn’t believe the league has reached its ceiling in terms of the number of teams.

So, it’s not a matter of ‘if’ for expansion, but where.

Arizona? Houston? Atlanta? Toronto (part two)? Quebec City?

The NHL’s current map features seven Canadian cities and two American markets with multiple teams (New York area with three teams and two in the Los Angeles area).

That, Daly pointed out, leaves significant openings in the U.S. for the NHL to consider.

According to Nielsen’s Designated Market Areas, Houston ranks sixth in the United States, Atlanta seventh and Phoenix 11^th.

Those three high-profile cities represent the largest markets that don’t have an NHL team, now that the Arizona Coyotes have been sold and will begin play this season in Utah.

Reading the tea leaves, it seems certain the next expansion step or steps by the NHL will be in the United States.

Here’s the tricky part.

How does the NHL go about identifying a new market, given that it would be difficult, if not impossible, for any group to simply forge ahead and build an arena on spec, hoping the league will find its project to its liking and bestow a franchise upon them?

It seems inconceivable, for instance, that either of the Atlanta groups (the other is led by former player Anson Carter) could or would proceed with construction of a new arena and attendant retail, residential or commercial development that would surround a new arena, without NHL assurances that they would be the pick to host an expansion team.

The Krause project, known as The Gathering at South Forsyth, has been in discussion with local politicians about a level of local funding for the project. The amount of local money potentially available to Krause and his group has declined from $390 million to $225 million, and any local monies for the project are contingent on The Gathering being named by the NHL as having been awarded a franchise.

Local voters will be asked in November to vote on a funding mechanism to pay back the $225 million earmarked for The Gathering, although the outcome of that vote will not impact the Krause group’s ability to move forward with the plan, Ferrara said.

The Gathering development, which covers 100 acres, is expected to cost around $3 billion: $1 billion for the arena itself, with $2 billion for the surrounding development. That’s a $3-billion commitment before the NHL expansion fee.

That leaves the group in a kind of limbo as it waits for more clear directives from the NHL as the league plots its next moves, perhaps as early as Oct. 1, when the NHL Board of Governors meet next in New York.

“I’m very optimistic, actually,” Ferrara said. “I believe in our location.”

Carter’s group, likewise, has an ambitious plan for its property in Alpharetta, a few miles south of The Gathering but north of the city’s I-285 perimeter highway, including access to mass transit, a practice facility and a possible soccer facility.

Like the Krause group, Carter’s group believes it has hit on the perfect location for a new NHL facility.

One thing favouring Atlanta, apart from the size of the market and the deep and wealthy business community, is that the NHL would be expanding into a market where a team will play in a facility designed for NHL hockey.

That’s not going to be the case in Utah, where the Utah Hockey Club will play at the Delta Center, home to the National Basketball Association's Jazz, with a retrofit to the building to make it more hockey friendly scheduled for down the road.

A similar retrofit would be required if the NHL expanded into an existing NBA building in Houston, or if a new team in Arizona partnered with the NBA Suns in Phoenix.

Given the NHL’s checkered history in Atlanta, though, what is the league’s appetite to give the go-ahead to a group there, knowing that neither potential ownership group is likely to move forward with construction without the league’s approval?

It is the classic chicken-egg debate.

“That could be the critical component,” said Carter, one of the top analysts on the NHL’s U.S. national broadcast team at Turner Sports, which is also based in Atlanta.

The pressure is on both Atlanta groups, and frankly any group wanting a new NHL team, to present a package that is wholly pleasing to the NHL, both physically and financially, that might sway them toward granting an expansion franchise.

“I wouldn’t commit to any group if they couldn’t build,” Carter said. “Otherwise, you’d have Arizona 2.0.”

That’s a reference to the myriad arena issues in Arizona that dogged the franchise from the moment it arrived from Winnipeg in the summer of 1996 to the moment it abruptly left this off-season for Utah.

So, how does the league reconcile the desire to ensure new owners provide an elite place to play, a la Vegas and Seattle, with the fact the costs of construction plus the expansion fees are so high, no one may be able to put shovel to ground without first getting the NHL’s backing?

“I’m sure they (NHL officials) put themselves in my shoes, too,” Carter added. “I definitely see it from both sides.”

T-Mobile Center was being built by AEG and MGM Resorts before Vegas was awarded an expansion franchise. But the Vegas dynamic is different than other U.S. markets. The belief was that if the NHL turned away from Vegas as a market, the building could stand on its own.

Could a new arena turn a profit in Atlanta without the NHL as an anchor tenant and with the NBA Hawks not going anywhere from their current downtown location? Unlikely.

Still with Vegas, owner Bill Foley was given permission to launch a trial season-ticket drive before being awarded an expansion franchise, which was a roaring success, ultimately whetting the appetites of local fans and NHL owners alike, and setting the stage for the historic expansion into Vegas.

Would something like that help sway the NHL to make a decision in Atlanta?

Daly wouldn’t rule out a trial season-ticket run, although neither Atlanta group has broached the topic with the league.

“I think that would be easy,” Ferrara said. “I think there would be overwhelming demand.”

Still, as much as Carter and Ferrara believe fervently the Atlanta market would be successful, their respective groups remain in some ways at the mercy of the NHL and its own due diligence about how to proceed.