SUPERDOME’S ‘GOLDEN AGE’
Sometimes Doug Thornton can scarcely believe his own story: In August 2005, the giant stadium he oversees suffers millions of dollars worth of damage from a major hurricane and several days of housing tens of thousands of flood refugees. The professional football team that is the stadium’s primary tenant takes up residence in another state and begins making noise about never coming back. The general public wonders aloud whether New Orleans can ever recover.
Suddenly it’s 2010, and the Louisiana Superdome – the granddaddy of active domed athletic stadiums – sports a gleaming new exterior and a refurbished interior, with more improvements on tap. The Dome is in its fifth full post-Hurricane Katrina season of hosting NFL football, and the home team wears the title World Champion New Orleans Saints. The Saints have committed to remaining in place for at least the next 15 years, and team owner Tom Benson is developing an entertainment complex next to the Dome, anchored by a new tailgating area called Champion’s Square.
Thornton, a regional vice president for SMG, the Dome’s management company, still feels a shiver of disbelief when he thinks back to 2005. “This building has come back from the brink of death,” he says.
But that’s hardly the end of the story. Along with about $300 million of improvements to the Superdome, a $275 million revamp is under way at the long-vacant nearby Hyatt Regency New Orleans – the only hotel in the immediate area. The next-door office tower, also empty since Katrina, is now owned by Benson, who has put the building back into service following a substantial renovation.
He wouldn’t have dared dream it five years ago, but today Thornton can point to an impressive list of major events slated at the Dome, including the annual Allstate Sugar Bowl Football Classic, a BCS Championship Game (January 2012), NCAA Men’s Final Four (March 2012) and Super Bowl XLVII (February 2013), plus three other top basketball events scheduled in the next-door New Orleans Arena.
“It is, potentially, the biggest site of major sporting events in the country over next three years,” he says.
Just as important, prospects for putting the Superdome to better use during the 98 percent of the year when it’s not hosting big sports games are looking brighter, thanks to the changes in the neighborhood.
The Hyatt Regency re-do will not only open 1,200 new hotel rooms in the area, it will also create 200,000 square feet of meeting space. The Hyatt’s owners are teaming up with Superdome management to market the two buildings together for big meetings and other events.
“The Superdome coming back – not just as a renovation, but as a new building with a new skin and new amenities inside – delivers an asset to the Hyatt that can be leveraged to put more business in both properties,” Thornton says.
The stadium’s 160,000-square-feet of floor space enable it to host big events such as an annual boat show, but in the past the space has been underused.
The adjacent Champions Square is a good outdoor space for related events, he adds. Sporting a large stage, big projection screens and food and beverage facilities, it offers what Thornton terms a “very urban and multimedia” setting for corporate clients to host parties and special events.
In addition, the New Orleans Arena is available for uses ranging from meetings to private concerts, such as employee-only events booked in recent years by companies including Budweiser and Starbucks.
Increased use of the spaces for non-sporting events will be crucial to putting the Superdome on better financial footing. Pre-Katrina, the stadium typically ran an operating deficit between $5 million and $10 million. In the post-storm years, plunging hotel taxes – the Louisiana Stadium and Exposition District’s primary source of funding – sent the deficit above $20 million.
The district refinanced its long-term debt in order to generate capital to renovate the Dome and cover FEMA-ineligible costs. Thornton says that step enabled the district to bring back and retain the Saints in New Orleans. But, like many others attempting to do financings in the last few years, the district ran into the buzz saw of a souring bond market. Short on bond proceeds to cover debt payments, they had to dig into cash flow. Thornton says the district now is trying to restructure its debt. Along with reduced inducements owed to the Saints under the team’s new contract, plus gradually increasing hotel tax revenue, that could help pare the deficit back to $10 million or so.
“We hope to one day have a break-even operation, though that’s probably a long way off,” he says.
Meanwhile, it takes only a glance backward to make Thornton thankful for the domed icon that dominates upper Poydras Street. “The building is repositioned; it’s fresh; it has modern amenities and the ability to compete with other facilities for international sporting events,” he says.
On top of improvements already made, the coming year will bring: 16 new luxury box suites; a new, expanded press box; revamped Plaza Level seating to include 3,000 additional seats; and an expanded, upgraded Plaza concourse with many amenities, including premium club lounges.
“For a building 35 years old, the Superdome is now in its golden age and is enjoying tremendous popularity,” Thornton says. He believes that, with the possible exception of Yankee Stadium, no other contemporary sports arena can match the cachet and “tremendous brand awareness” of the Dome.
Thornton says the Dome’s rising profile has helped it attract corporations interested in putting their name on the stadium. Dome managers recently have talked with two out-of-state companies about acquiring naming rights, but both eventually bowed out of the discussions. Thornton says the district will continue to work closely with the Saints to scout the right partner for a naming deal. Meanwhile, the Louisiana Superdome is a respected name unto itself.