October 21, 2014

Around the State- Central- May 2001

Ken Ibold | 5/1/2001
An Assist From Taxpayers?
Magic owner Rich DeVos wants the county to raise its tourist tax to pay for a new arena.

by Ken Ibold

To hear Orlando Magic owner Rich DeVos talk, the team's arena, the TD Waterhouse Centre, is a decrepit facility that drives fans away and is largely to blame for the Magic losing more than $37 million in the past four years. The arena, state-of-the-art when it opened 12 years ago, should be replaced by a new, publicly financed $250-million showpiece a few blocks from the existing arena, he contends.

DeVos says a new arena with more luxury boxes and other amenities would generate more revenue; the Magic could pay higher salaries and possibly field a more competitive team. Critics, expectably, object to using tax funds to subsidize a business owned by a billionaire.

At the heart of the financing controversy is the tourist development tax -- five cents on each dollar paid for hotel rooms. The county collected $108 million in fiscal 2000 and expects $113.5 million in 2001 and $121.5 million in 2002. But virtually all the money is earmarked to paying off the expansion of the Orange County Convention Center; funding its operation and maintenance; and funding the Convention and Visitors Bureau. The discretionary funds generated by the tax, which are used to subsidize smaller local venues, typically don't exceed $1 million a year, says Fred Winterkamp, a manager in the county comptroller's office, which collects and oversees the tax.

The arena issue will be decided by the county commission, which will have to come up with $121.5 million; raising the tax by a penny would generate about $20 million. Hotel and attractions operators have resisted attempts to apply the tax to other sectors such as education and roads; they also are reluctant to raise the tax, fearing it may lead to a loss of business.

DeVos sees those objections as a turf war. "They've got their grubby little fingers on it, and they don't want to let it go," he says. "Maybe it's time to invest it in a few new places."

Chairman Rich Crotty says he wants to keep the Magic in town but opposes raising the tax, suggesting the county is looking for ways to refinance existing debt to make the current tax cover the cost of a new arena.

Crotty says the team faces a tougher battle for public support than it does on the court: "I think it's safe to say there's a lot of public sentiment against" subsidizing a wealthy owner's business and high player salaries, he says. "And you can also make the argument that the best way to gain public support is to field a winning team. They have a PR nightmare."

In the News

Central Florida -- Brunswick Corp. is laying off 500 workers nationwide from its Sea Ray and Baja boat manufacturing plants in four states, including those in Edgewater, Merritt Island and Palm Coast. The company refused to outline the cuts at individual plants.

Daytona Beach -- VitalWorks of Ridgefield, Conn., is building a 36,000-sq.-ft. building that will be used to develop software for hospitals and radiologists. The company employs about 140 in a smaller facility nearby.

Deland -- Call center TeleTech is laying off 219 employees after it lost Cingular Wireless as a customer. The layoffs leave TeleTech at half its previous size.

Edgewater -- Dougherty Marine Partnership says it plans to boost employment from 54 to 84 and expand space devoted to boat manufacturing. The company, which is investing $1.5 million in the expansion, is getting a grant of nearly $50,000 from Volusia County's Economic Opportunity Fund.

Lake Mary -- Phoenix International's software unit will rise again, this time as part of U.K.-based London Bridge Software Holdings. London Bridge bought the ailing software company for $44 million, a deal that included multimillion-dollar "golden parachutes" for two top former executives.

The Bank of New York has leased 52,000 square feet for a mutual fund support office that will mean 330 new jobs. Most of the new hires will have accounting backgrounds, but some will be computer programmers or other support personnel.

Mitsubishi Heavy Industries America says it will build its Western Hemisphere headquarters in Lake Mary and a turbine engine plant in south Orange County. The plant will employ 350 at an average wage of $44,547. The headquarters will become home to 116 at an average salary of $88,000. The state kicked in about $1.1 million in incentives, and Orange County added nearly $300,000 to attract the $40-million plant.

Orange County -- Florida Hospital East Orlando says it will seek regulatory permission to switch its 16 obstetrics beds to surgical-medical beds. The change would force most pregnant women to go to the already overcrowded Winter Park Memorial Hospital to deliver or to pick hospitals in another chain.

Advanced Xerographics Imaging Systems has begun construction on a 65,000-sq.-ft., $4-million headquarters complex at Lee Vista Center.

Orlando -- Film and TV production accounted for about $424 million in direct spending in 2000, up from $390 million in 1999, according to the Metro Orlando Film and Television Commission.

World Commerce Online laid off about 40% of its workforce and shook up top management by naming venture capitalist David Parker chairman and elevating company President Joseph Dugan to CEO. The company has burned through $60 million in venture capital in two years, and its stock has lost more than 95% of its value in the past year.

Universal Studios Recreation Group's 30-member creative team, which designs Universal's rides, restaurants, stores and theme parks, is moving from Los Angeles to Universal Orlando in July.

Marty Kaplan, a former top Sprint Corp. technology executive, has been named CEO of Teon Optical Networks, the latest spinoff from technology incubator Milcom. Teon plans to design and produce next-generation telecom systems.

The Mystery Fun House shut down after 25 years. The property, owned by timeshare company Central Florida Investments, includes a 60,000-sq.-ft. building on six acres in a prime I-4/International Drive location. Asking price: $6 million.

Viacom plans to lay off 30 production workers from the Nickelodeon cable TV network as part of a shift in the company's strategy from having a full-time production staff to using more temporary and contract workers. The company also says two new shows fell short of expectations. Noah Knows Best will not be renewed, and the fate of Taina is uncertain.

SeaWorld's new Discovery Cove resort has raised the price of admission $20 to $199 per day plus tax.

Lockheed Martin has launched another spinoff. XyTrans is developing next-generation signal-processing devices that could boost wireless internet access to 1.2 billion bits per second, about 1,000 times faster than the fastest telecommunications systems now on the market. XyTrans was launched with $4 million in venture capital and uses technology developed for the
F-15E fighter jet's weapon systems.

Oscela County -- Central Florida's prolonged drought has been good news for the 1,406-room Opryland Hotel Florida. The hotel and accompanying 178,000-sq.-ft. exhibit hall will be finished at the end of the year, two months earlier than planned thanks to few rain delays. The company says it may use the extra time to open the exhibit area a month early.

South Daytona -- Chicago-based R.R. Donnelly says it will close its South Daytona commercial printing plant, idling 225 workers.

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