Purpose and Promise
The Centennial Authority is a volunteer board appointed by leaders from the State of North Carolina, Wake County, the City of Raleigh, and the Wake County Mayors. Created by the General Assembly in 1995, the Authority was given the mandate and the opportunity to study, design, construct, own, promote, finance and operate a regional facility. With a committed board, sound leadership and a strong committee system, the vision of a facility that would become a vital part of the state and region in which it was located could be achieved. On September 8, 1995, the Chief Justice of the North Carolina Supreme Court performed the swearing in ceremony for the original 13 members. The General Assembly increased the board membership to 17 in 1997 and to 19 in 2000. October 29, 1999 was opening night. The study, design, construction, and initial financing portion of the legislative mandate had been completed. As charged, the Centennial Authority, as owners, would begin the ongoing responsibility for facility oversight, monitoring of financing, operations, upgrades and additions, and all activities associated with the responsibility as owner of this multi-million dollar, multi-purpose arena that serves the people of the state and region.

When the General Assembly created a mechanism to bring such a facility to the region and the state, the idea had promise. That promise and vision became the RBC Center which in the March, 2003 issue of Venues Today is ranked 5th in the Top Stops of America with the ranking based on concert and event grosses from January 15, 2002 to February 15, 2003. Other venues in the top five are American Airlines Arena (Texas), Madison Square Gardens (New York), Continental Airlines Arena (New Jersey) and Alltell Arena (Arkansas). And, it all began with Senate Bill 606, Ratified July 19, 1995, committed financial partners, and thirteen appointees.

Financial Integrity
The Authority remains committed to being a good steward of the taxpayer dollars as well as the investments of the two tenants, Gale Force Holdings and North Carolina State University. Recently, Gale Force and the University entered into a $1,320,000 joint venture to purchase an electronic ProAd ribbon board as a permanent addition to the building. This investment by the tenants will generate additional revenue and provide interactive entertainment for the fans. As tenants, Gale Force Holdings and North Carolina State University make annual rent payments to the Authority, as owner. The FY 2003-2004 Authority budget reflects a guaranteed rent payment from Gale Force of $2,700,000, with a potential for percentage rent at 6% estimated at an additional $120,000. North Carolina State University rent is budgeted at $712,632 based annually on the number of basketball games played during a season. The Authority Finance Committee carefully manages the Authority revenues and expenditures. Authority financial records are audited annually and are public record. In September 1997, the Authority issued $62,860,000 of Hotel Tax Revenue Bonds to finance a portion of the arena construction cost. As of September 2003, the balance will be $56,230,000. Annual payments are $5,160,000, including principal and interest. The bonds will be paid off by the year 2019. On an annual basis, a PILOT or Payment in Lieu of Taxes is made to the City of Raleigh and Wake County. These are unrestricted general fund dollars for the two entities. To date, the Authority PILOT payments total $6,145,401. In addition, the FY 2003-2004 payment to the City and County by the Authority is estimated to be $1,829,634.

Financial Highlights
RBC Centura, purchased the naming rights for $80,000,000 over a 20-year period in September of 2002. The Authority is a party to that agreement with Gale Force, North Carolina State University, and RBC Centura. The Authority will receive approximately $22,000,000 in revenue from RBC Centura over the 20 years. Under the agreement terms, the Authority is required to make available $3,125,000 from the sponsorship revenues over 15 years for routine building maintenance and repair. Expending those funds has begun.

Properly maintaining and improving the facility is a primary focus of the Authority. To this end, two funds have been established to ensure that these goals are met. Under the lease agreement with Gale Force and the NCSU use agreement in 1997, a Capital Reserve Fund was established. The Authority would manage and fund the Capital Reserve with annual payments of $650,000 from operating revenues. The 1997 Lease agreement with Gale Force was amended by the Naming Rights MOU First Amendment in 2002, whereby the Authority is obligated to make annual payments to Gale Force of $225,000 for the first 5 years and $200,000 for each of the subsequent 10 years for building routine maintenance and repairs and capital improvements for a total of $3,125,000. The Capital Reserve Fund currently carries a balance of $1,777,090.

Separate and apart from any other capital reserve funding, the Building Capital Enhancement Fund was created by the Naming Rights MOU and the Second Amendment to the Tri-Party Agreement in 2001. The account is funded from Authority excess operating funds, excess construction funds, and the Authority portion of naming rights proceeds. The Authority maintains the fund. Expenditures can be made only after 10 years and with a vote of no less than 2/3rds majority of the Authority membership. The Fund cannot be invaded during the 10 years without authorization to do so from both the city and county. The Building Capital Enhancement Fund protects revenues needed to support future capital enhancement, improvements, extraordinary repairs, and replacements associated with maintaining the arena and adjacent parking areas in first-class condition over the long term. Currently that Fund is at $3,342,470.

Recent In-House Modifications and Safety First
The Authority and Gale Force cooperate on building oversight. Problem areas in the facility are discussed and decisions are made as to the best and most cost effective solutions. Upgrades are a part of that process. During the current fiscal year, the Authority authorized as a fan appreciation and building enhancement project the installation of cup holders at all of the seats where the fire code allowed installation. As to safety first, recently several changes have been made in an effort to improve safety and security. The Authority initiated the installation of additional handrails on the third level to improve the seating and stair safety in 34 locations. On the third level, yellow anti-slip epoxy safety stripes were applied on stair and walking surface edges to prevent potential missteps or falls. An exterior addition just completed is the installation of eleven intersection lights at critical locations around the arena property for added vehicle and pedestrian traffic safety and security. In response to a request from Gale Force, the Authority agreed to fund Fire Alarm Computer Upgrades.

Exciting Present, Bright Future-Commitment and Caring the Key
It has been a rewarding process for the Centennial Authority members to see the work product become a presence in the state, community and nation. The RBC Center received primary national attention when the Carolina Hurricanes had a successful season that led to the 2002 Stanley Cup Finals. Again, national coverage came from the high interest in the American Idol final segment. For 2004, the schedule for national exposure includes the NCAA Division 1 Men's East Regional Basketball first and second rounds in March and the NHL Draft in June. The fans are responding with high attendance numbers to events including Pavarotti, Paul McCartney, Billy Joel/Elton John, Cher, Tina Turner, Back Street Boys, Professional Bull Riding, Ringling Brothers Barnum & Bailey Circus, and the CIAA Tournament that broke tournament records for attendance in 2003.

In summary, the future of the arena is only as bright as the strength of the commitment of Centennial Authority members. With the cooperation of our financial partners, the Centennial Authority has made every effort to put in place measures to ensure that the building envisioned by the legislature in 1995 will remain a first-class facility for the people it serves in the years to come.