NEW ORLEANS — Gov. Bobby Jindal and the Hornets have announced an agreement on a 10-year lease extension at the New Orleans Arena.
The governor Friday announced the new deal, which will run through 2024.
The deal requires legislative approval of a bond issue that will help fund about $50 million in arena improvements that should give the Hornets more revenue streams.
The new lease would not require any new taxes.
"This proposed agreement shows that we're changing the way we do business with our sports teams," Jindal said in a release. "We are investing in our capital assets to allow the Hornets the opportunity to earn more money, which reduces the risk for the state and our taxpayers.
"By upgrading the New Orleans Arena, we will help the Hornets earn more revenue and also make the site more competitive to attract entertainment and sporting events that generate economic development for the city and the state."
The extension was done in conjunction with the NBA's efforts to find a new owner for the team, which is currently owned by the league. A new owner would be bound to the new lease.
NBA Commissioner David Stern said in the release that the "announcement is an important and necessary step toward reaching an agreement with a new owner."
The hope is that a long-term lease and new ownership will stabilize a franchise that has at times been on shaky ground since moving to Louisiana from Charlotte in 2002.
The Hornets also spent two full seasons in Oklahoma City after Hurricane Katrina devastated New Orleans in August 2005.
By 2010, owner George Shinn was saddled with too much debt to continue operating the club effectively and needed to sell. Shinn has said he did not want to sell the team to someone who would immediately move it out of Louisiana. However, he also could not reach a deal to sell his shares of the club to then-minority owner Gary Chouest, a Louisiana native and owner of a thriving business that builds and operates supply boats to the offshore oil and gas industries.
That led the NBA to step in, and for the first time in league history, take over ownership of one of its teams, with Stern acting as the de facto owner.
Once the sale was completed in Dec. 2010, Stern appointed sports attorney Jac Sperling, a New Orleans native, to oversee the club and begin negotiating with prospective buyers, as well as with state officials concerning the team's lease of the state-owned New Orleans Arena.
The old lease was set to expire in 2014 and contained provisions that allowed the club to break the lease if average attendance fell below 14,735 during a two-year period. Last year, that attendance threshold was surpassed only after an intense campaign, orchestrated with the help of politicians and business leaders, urging fans and businesses to buy up blocks of tickets,
The new lease does not have such an escape clause, which is meant to send a message to fans in Louisiana that the new ownership is committed to the region long-term.
As part of the effort to attract a new owner, team officials also spent the past offseason conducting an unusual campaign to build the club's season-ticket base to 10,000, which the league considers a benchmark for successful franchises. The campaign involved social mixers in the homes of prominent business people in the region, giving Hornets officials an intimate forum to explain the benefits of owning Hornets season tickets and having their city represented by a franchise the world's top professional basketball league.
The 10,000 season ticket mark was surpassed right around the time the NBA's lockout ended with a new labor agreement, and Stern praised the community for its support during a time when the league was dealing with labor strife. However, the club has played to small crowds as it has struggled to win since the NBA signed off on a trade of Chris Paul to the Los Angeles Clippers.