[StBernard] State of Louisiana and New Orleans Hornets agree on two-year lease extension

[Westley Annis]

State of Louisiana and New Orleans Hornets agree on two-year lease extension

BATON ROUGE - The State of Louisiana and the New Orleans Hornets have reached an agreement to extend the team's lease an additional two years through 2014. The extension essentially makes up for the time the team spent when it relocated to Oklahoma City following Hurricane Katrina in 2005.

Under the lease terms, the soon-to-be expanded Alario Center in Jefferson Parish will continue to serve as the Hornets practice facility. The State will be relieved of its responsibility to construct a practice facility for the team. 

The Hornets will continue to be eligible to receive financial incentives based upon ticket sales at substantially the same amount as the previous agreement.

The extended lease agreement includes specific benchmarks that the Hornets and State believe are reachable, fair to both sides and allow the team to operate and perform at competitive levels in the NBA. It provides that the Hornets can opt out of the agreement if the team fails to draw an average attendance of 14,735 at the end of the 2008-09 season and beginning on December 1 of 2007, which reflects the team's average per game attendance for the three seasons before Hurricane Katrina. The average attendance benchmark would place the Hornets 3rd from the bottom in the NBA.

Leaving Louisiana would be expensive for the Hornets, costing up to $100 million. These costs are based on estimated inducement reimbursements and penalties imposed by the state and the NBA, in addition to various relocation costs. 

"Both the State and Hornets ownership have great confidence in the team's fan base," said Governor Kathleen Babineaux Blanco. "With the team's performance on the court thus far and their work to help rebuild New Orleans, I believe the Hornets and their fans are on the right track."

"During this process, the Hornets shared their financial situation with the LSED and my negotiation team, ensuring open and candid negotiations," the Governor said. "I am satisfied that this lease extension is fair, thorough and transparent, and I congratulate everyone who worked to bring this agreement to fruition."

NBA Commissioner David Stern said the NBA is pleased that the State and the Hornets were able to extend the lease. "The NBA has reached out to assist New Orleans in its recovery. We are committed to making the franchise more successful than ever, and we hope that the Hornets will remain in the city for many years to come," said Stern.

Hornets owner George Shinn said that he is excited about extending the team's lease an additional two years. "Our organization is part of the fabric of New Orleans. Our players and professional staff are active in the community and we get tremendous response from the community because of their efforts. In addition, our fans and staff know that New Orleans gets a mention through the Hornets games whenever professional sports are discussed in the national media."

"New Orleans is the right community for the Hornets," said Shinn. "We are exceeding many of the benchmarks that we set out for our return, including suite sales and premium seat sales. I am betting that fans want to be part of a winning organization. The ingredients are in place for the Hornets to be successful in south Louisiana. We have a young team that is winning now and features dynamic leaders in Chris Paul and Tyson Chandler. We celebrated our first sellout of the season last week and expect even greater fan support at our upcoming games and into the playoffs."

"Working together with the State, we believe that we have come up with an agreement that gives us a realistic expectation of success," said Shinn. "Everyone in the organization is in New Orleans because they chose to be here. We want this to be our home for a very long time, and we have great confidence that we will succeed."

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