Downtown might be out for a new Pensacola sports arena. Where else could it go?

The developer leading the charge to build a new local arena and youth sports facility said he is open to choosing a location in northern Pensacola, rather than downtown, to ensure the project can be financed.

Jay Patel, the Pensacola businessman behind Pensacola Arena Development Partners, told the News Journal on Thursday that he was open to considering other locations for the approximately $80 million arena and sports complex because the two locations under consideration for the project in downtown Pensacola are not eligible for the tax credits that the County Commission has said are crucial to funding the project.

Pensacola Arena Development Partners, a partnership of several companies Patel brought together for the project, made a proposal to the county to finance the construction of a new arena and field house, along with a retail and hotel development, to replace the aging Pensacola Bay Center.

Patel said there are other options to fund the development at one of the sites downtown, such as adding a fifth-cent to the tourism tax or having the city of Pensacola contribute funds to the project.

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"If we don't use the fifth and if we don't have the new market tax credits, the project would not be downtown," Patel said. "There's locations north of I-10 that do qualify for new market tax credits, and the community would have to make a decision: Do they want keep it downtown and allow a portion of the fifth-cent or do we just not want to use the fifth-cent and take it up north? Either way the project's going to be successful."

The proposal calls for private money from Pensacola Arena Development Partners to front the $80 million construction cost, and the county would repay the debt over 30 years with help from $25 million from Triumph Gulf Coast funds and additional money through new market tax credits.

Triumph Gulf Coast was created by the Florida Legislature to disburse more than $1 billion for economic development from a settlement with BP over the 2010 oil spill, and new market tax credits are part of a federal program designed to increase new development in high-poverty or economically distressed areas.

The County Commission approved submitting an application for the project to Triumph Gulf Coast and said the new market tax credits were a crucial part of final approval.

The two sites under consideration for the new arena are the current location of the Bay Center and the site of the former Emerald Coast Utilities Authority sewage treatment plant owned by Quint Studer.

Escambia County and Pensacola Arena Development Partners submitted a 149-page application to Triumph Gulf Coast fund — one of the first complete applications submitted to the fund — for $25 million over five years for the project.

The proposal was supported by Visit Pensacola, the Pensacola City Council and the Escambia County Tourist Development Council.

Patel said Thursday that new federal maps that came out in January ruled out the two sites under consideration for the project as eligible for new market tax credits.

Escambia County levees a 4-cent tax on all hotel rooms that fund the tourism development tax fund, which is spent mostly on marketing Pensacola as a tourist destination.

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A study from Crossroad Consulting attached to the county's Triumph application said the project will produce up to 660 jobs and up to $54.6 million in total spending annually, with up to $4.8 million in tax revenues. The study was an updated version from one released in 2016 that said a youth sports facility would generate up to $28 million in economic impact.

The updated study looked at the impact of the new meeting space the facility would provide.

Patel said raising the tourism tax to fund the project would be worth it because of the new economic activity the new facility would create.

"I don't think we would need all of the fifth-cent — maybe a quarter, maybe a half — but by putting in the fifth-cent, it ensures the project gets done," Patel said.

Escambia County Commission Chairman Jeff Bergosh, who proposed raising the tourism tax to fund the Sheriff's Office, said he would be open to raising the fifth-cent but not just for the arena.

"I've run into a brick wall on that with the other commissioners, and with the hoteliers that I've spoken with," Bergosh said.

Commissioner Doug Underhill said Wednesday he thought the proposal was "dead in the water" after it lost the new market tax credits.

"Don't ever believe people when they say they're going to raise a tax on somebody else," Underhill said about potentially raising the tourist development tax for the project. "I've always said I will not support taking the county in debt for an entertainment facility."

Bergosh said losing the new market tax credits were a problem.

"That could be the killer," Bergosh said. "That's $16 to $18 million bucks that would have to be put back into that deal, so where does that money come from?"

Bergosh said he was open to moving the project to another location that would qualify for the tax credits.

Underhill said he couldn’t support going into debt when the county doesn't have enough money to pay for sheriff's deputies.

"Like most things we do in the county, it starts off as a good idea, and then everyone comes and hangs their ornament on it," Underhill said. "And so it's like Charlie Brown's Christmas tree, and it falls over because it's got all the ornaments on it."

Jim Little can be reached at jwlittle@pnj.com and 850-208-9827.