Feb. 26 (Bloomberg) -- The New Jersey Devils reached a revenue-sharing deal with the city of Newark for the National Hockey League team’s Prudential Center home arena that will increase taxes and fees for fans.
Financial details weren’t included in a joint statement announcing the agreement. A person involved in the talks, who declined to be identified because he isn’t authorized to disclose specifics of the arrangement, said the city will build a new parking deck near the Prudential Center and the team will lease enough spots to make it profitable.
The arena’s owners will also walk away from an offset clause on a ticket tax that will add 1.37 percent to the cost of most sports-event seating and the city will be forgiven for a $600,000 payment under an arbitration award, the person said. Newark will also pay the team about $2.7 million annually in parking revenue for non-municipal lots surrounding the arena, according to the person.
“We can now move forward together, continuing to build on the successes of the last five years, which will make the Rock and the rapidly growing arena district an even greater economic engine for Newark,” according to the statement from the Devils and the Newark Housing Authority.
State Assemblyman Al Countinho, a Newark Democrat, said in an interview that the deal will benefit the city by between $2.5 million and $3 million a year through the course of the contract and he said the parking tax changes will need some level of approval in the New Jersey Legislature.
“It’s a good deal for the city,” he said.
The city council will debate the measure today.
The deal comes less than a year after Mayor Corey Booker described Devils Owner Jeff Vanderbeek as a “high-falutin’ huckster and hustler” who came to Newark with a “mouthful of promises and a pocket full of lies” after an independent arbitration panel granted the team the parking revenue.
Booker told Bloomberg Television at the time that his city has made painful financial sacrifices while Vanderbeek has dodged promises to pay for job training, youth organizations and a recreation center, creating “a sense of betrayal.”
The city sold about $200 million in bonds backed by marine-terminal revenue in 2004 to pay for the arena, with the Devils saying they put in about $185 million.
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