By Dan Christensen, FloridaBulldog.org
The stealthy deal that last year gave the owners of the Florida Panthers control of a chunk of Fort Lauderdale’s Holiday Park – including War Memorial Auditorium – for the next 50 years will soon face a judge’s scrutiny.
Fort Lauderdale city commissioners who voted unanimously to approve the deal see it as a major boon to the city.
“I think this park is going to be a showplace. And I think this is going to be the Central Park for Fort Lauderdale. I think it’s going to be a big attraction,” Commissioner Steve Glassman said at an October commission meeting.
But Gary Olsen, a Fort Lauderdale attorney who regularly uses the park, wants to upend the deal. He’s asked the court to invalidate the city’s lease with War Memorial Benefit Corporation (WMBC), which the Panthers incorporated in December 2018. Olsen argues Fort Lauderdale failed to comply with mandatory procedures in the City Charter regarding property it leases by treating WMBC as if it were a not-for-profit company, when it is in fact a registered for-profit entity.
The distinction is significant.
If the city wants to lease property to an individual or a for-profit corporation, the charter requires it to seek competitive proposals and accept sealed bids. Leases to “civic organizations, charitable organizations, public nonprofit corporations and like organizations” have no such requirement and the Panthers faced no competition.
A Florida Panthers company
WMBC is what’s known as a “social purpose corporation,” a special type of for profit established by the Florida Legislature in 2014. The Panthers set it up with the dual purpose of making money and “creating” these avowed public benefits: a renovated War Memorial Auditorium, new facilities for public activities to include ice skating, hockey, indoor lacrosse, soccer and other sports and a resulting improvement in “human health and fitness.”
It was that “social purpose” designation that city leaders chose to embrace, repeatedly using that language to describe the company in public documents. Sometimes, commissioners went even further in distancing WMBC from any profit motive.
For example, Commissioner Ben Sorensen’s December column in the magazine Go Riverwalk, “Updates from the City’s District 4,” informed residents that War Memorial Benefit Corporation was “a nonprofit entity of the NHL’s Florida Panthers.” Mayor Dean Trantalis also referred to WMBC as a nonprofit in a telephone conference call last fall, according to one participant.
Olsen contends the city essentially hid the fact that WMBC is a for-profit in not only its written references to the company, but also in its decision to proceed solely under the not-for-profit Section 8.13 of the City Charter.
“The city did not want the public to know about the true nature of the lease and the public knew nothing about it,” Olsen wrote in a letter to City Attorney Alain Boileau shortly after the Fort Lauderdale City Commission voted unanimously to approve the lease with WMBC last April. “The City never sought input from the public and never seemed interested in input from us.”
Boileau’s reply: “We disagree with your interpretation of our Charter and Florida law, as well as your belief that the city has ever taken the position that War Memorial Benefit Corporation is a not-for-profit. We are lawfully proceeding with the Lease Agreement in accordance with Charter Sec. 8.13.”
WMBC has two directors – Florida Panthers President and CEO Matthew Caldwell and Chief Operating Officer Sean McCaffrey. They work for billionaire Vincent “Vinnie” Viola and multi-millionaire Douglas Cifu, who purchased the Panthers and related businesses in September 2013.
‘Red flags’ about Florida Panthers
Frank Schnidman, a retired Distinguished Professor of Urban and Regional Planning at Florida Atlantic University, sees “red flags about the intent and purpose of the wholly captured new company.”
Is WMBC “real or really a front for another organization that is not a social purpose corporation?” he said. “They will use the captured new company to benefit the parent company – isn’t this what this is actually about?”
Olsen sued last June. Judge William Haury will hear motions to dismiss the complaint filed by the city and WMBC on Feb. 4 at 2:30 p.m.
The 50-year lease gives control of 6.83 acres of Holiday Park, including the 20,000-square-foot auditorium, to WMBC for $1 a year. The city also agreed to kick in $800,000 in taxpayer money. In exchange, the Panthers promised to spend in excess of an estimated $20 million to refurbish the auditorium and make other improvements. Those improvements include a pair of indoor ice rinks, a professional sports training facility for the Panthers and a new concert venue capable of seating 3,000 people “for corporate, promotional or charity events.”
Among the “permissible uses” for lessee WMBC, “whose mission is to provide public benefits,” is the sale of “liquor, beer and wine.” Until the lease was signed, alcoholic beverages were banned throughout Holiday Park.
In October, at the Panthers’ request, commissioners unanimously agreed to amend the lease to move the entire leased property 67.3 feet further east. The area remains 6.83 acres, but the lease parcel that runs 700 feet north to south now pushes much deeper into Holiday Park – something not pointed out in city memos or made clear in accompanying legal descriptions.
‘Privatizing the park’
“What they’re doing is privatizing the park,” said Olsen, who contends that all of Holiday Park is now in play because there are no formal amendment procedures under nonprofit Section 8.13.
“The lease parcel can now be expanded again and again by agreement of our city manager and the Panthers. The public has been completely shut out from the process.”
Florida Panthers lobbyist John Milledge told commissioners last October he’d had extensive meetings with residents and various business groups about the Panthers plans at the park. But some interested city residents who use the park said they were largely unaware of the deal before it was signed.
“I’m retired and I’m there five days a week from 10 to 12 each day. If there was an outreach, it missed me,” said attorney Bob Blackmore. “I don’t think it’s right of the city to convey this to a private, for-profit corporation. Parks should be for the people and be operated by the citizens of the community that supports them.”
“I saw no outreach personally, and neither did so many other people I know,” said Herb Levin, who lives across the street from Holiday Park. “Leasing them War Memorial, that could be a good. But to put a training center and other concrete structures in, you are taking away a park and old growth trees for a building. Do we need this? Let the Panthers use their training center in Sawgrass. This diminishes the park.”
The Florida Panthers have lined up some interesting legal talent to defend against Olsen’s lawsuit. Most notable is WMBC lawyer Jack Seiler, who was Fort Lauderdale’s pro-development mayor from 2009-2018. The city is represented by Ed Dion, a former Broward County Attorney and General Counsel to the Broward Sheriff’s Office.
Looking to dismiss lawsuit
Together, the defendants are looking to bounce Olsen’s lawsuit out of court on several technical grounds, contending he lacks standing to sue, that there is no “present case or controversy that requires a judicial determination, and that any alleged harm or injury to him is entirely hypothetical.”
The Holiday Park deal is reminiscent of the Panthers 1996 deal with the county regarding the BB&T Center that’s adjacent to Sawgrass Mills Mall. The property, which opened in 1998 at a total cost of $221.1 million, is owned by the county but is operated by the Arena Operating Company Ltd., an affiliate of the Panthers and a subsidiary of Sunrise Sports & Entertainment, according to county records. The arena was financed largely with tourist tax dollars. The BB&T deal expires in 2028.
Over the years, the Panthers have been heavily subsidized by taxpayers despite having a relatively small fan base. According to ESPN, the Panthers rank 29th out of 31 National Hockey League teams with an average home game attendance this season of 13,472. And on Facebook, the Panthers have by far the fewest online fans of any NHL team (198,000).
Over 26 seasons, the Panthers have lost more games than they’ve won – appearing in the playoffs only five times and losing in the first round or quarterfinals four times. In 1996, the Panthers made it to the Stanley Cup finals, only to lose to the Colorado Avalanche.
Nevertheless, in December 2015 the Broward County Commission voted to give the Panthers $86 million in public funds from tourist tax collections. The decision was made after the county reviewed figures that showed the Panthers organization lost $36 million in 2014 and $27 million in 2013 and it was feared the team might declare bankruptcy or relocate, according to the Sun-Sentinel.
The story also reported that the commission’s vote had increased the total public investment in the Panthers to $342 million.
With the Holiday Park deal, that total is now $342.8 million. The city will also lose an estimated $785,000 every year in auditorium-related revenue, Fort Lauderdale City Manager Chris Lagerbloom told commissioners in a memo.