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Inside Carolina Hurricanes History: A failed expansion bid set the table for the Canes’ move to North Carolina

The Hurricanes wouldn’t have been the Hurricanes as we know them if not for a decision made seven years before the team moved to North Carolina.

Jamie Kellner

The sale of the Carolina Hurricanes from Peter Karmanos to Tom Dundon last week closed the chapter on Karmanos’ 24-year majority ownership of the franchise.

But had things panned out differently four years before Karmanos bought the Whalers, well before the Hurricanes were ever even a passing thought, there’s a good chance that the Whalers would have never moved to Raleigh. The Tampa Bay Lightning wouldn’t exist in its current form, and even if a team did eventually put down stakes in North Carolina, it would have been owned by someone not named Peter Karmanos.

This is a story of Sun Belt expansions, of near-misses, of desperation prayers being answered, and of a decision whose ripple effects eventually trickled down to three franchises, four cities, and two major-league sports.

Dream Big

Peter Karmanos’ first foray into hockey franchise ownership occurred in 1984. He was joined in a three-man ownership group by Thomas Thewes, his longtime business partner, and a recently retired Detroit Red Wings goaltender named Jim Rutherford, in purchasing the OHL’s Windsor Spitfires.

Karmanos’ group owned the Spits for five years, winning the 1988 OHL title and finishing runner-up for that season’s Memorial Cup. But the Detroit native long had eyes to bring a franchise to his hometown, and proposed moving the Spits to Plymouth, Mich., in 1989, prompting an uproar in Windsor. The OHL eventually brokered a deal whereby Karmanos would sell the Spits to an owner who would keep them in Windsor, while granting him expansion rights to a franchise that would eventually become the Plymouth Whalers.

It was convenient timing for Karmanos, who coveted an NHL franchise - and sold the Spits just as an NHL expansion process was ramping up.

Growing by Leaps and Bounds

1990 was at the front end of a major NHL expansion, the first since four WHA teams were absorbed into the league in 1979 and one that would see the league grow to 30 teams by the turn of the 21st century.

The league would add its 22nd franchise in 1991, a reactivation of the old Cleveland Barons franchise from the late ‘70s reborn as the San Jose Sharks. The Gund brothers, owners of the Minnesota North Stars, originally wanted to move the North Stars to California outright, but the league, not wanting to lose the Minnesota market, offered them an expansion team and an oddball dispersal-expansion draft hybrid instead.

Two years later, big-pocketed owners would join the league, the Walt Disney Company through the Mighty Ducks of Anaheim and Blockbuster Video magnate Wayne Huizenga with the Florida Panthers.

In between was one of the wildest and most unpredictable expansions the NHL had ever seen.

A whopping 11 groups, representing ten different cities, expressed an interest in a franchise. Two different groups wanted a franchise for San Diego. Groups representing Seattle, Phoenix, Milwaukee and Houston wanted a club in those cities. Two Canadian cities, Hamilton and Ottawa, were interested. And there were three groups in Florida: one in MIami that curiously didn’t involve Huizenga, one in Tampa, and a third group from across Tampa Bay, in St. Petersburg.

That group comprised none other than Thomas Thewes, Jim Rutherford and Peter Karmanos.

A Snowbird’s Paradise

St. Petersburg and Tampa are separated by an eight-mile-wide finger of Tampa Bay, and while the cities are nearby, they are vastly different: think San Francisco and Oakland, or Dallas and Fort Worth.

Tampa is the main city of the metropolitan area, similar to cities like Jacksonville and Charleston in its composition, but St. Petersburg is much more than a mere suburb, home to a significant population that spends half the year up north and the other half in a place where snow is a faraway mirage. The beaches, about six miles west of downtown on the opposite side of a small peninsula bounded by the Gulf of Mexico and Tampa Bay, attracts year-round activity, but especially during hockey season, when people come down in droves to enjoy sunshine in what would otherwise be a gray, cloudy winter elsewhere in the country.

The demographics and atmospheres of the two cities are different enough that two different expansion bids could coexist without one stepping on the other to any appreciable extent. And it could have worked in either city.

Karmanos had his chance: a wide-open expansion field, an untapped and growing market, and seemingly token resistance from the Tampa bid, led by Phil Esposito but without any readily-apparent source of financing. It was serious enough that Rutherford moved to St. Petersburg for a full year prior to the NHL’s expected awarding of the franchises in late 1990.

But one question loomed large: where would the team play? Few of the expansion bid groups had a solid answer, and the NHL wanted details. Miami and Hamilton were probably the best positioned, with Miami Arena and Copps Coliseum respectively ready and waiting for tenants. Seattle Center Coliseum and Milwaukee’s Bradley Center could be retrofitted for hockey with little significant effort. Phoenix and Houston had basketball arenas that could work, but with some serious disadvantages. Ottawa had a junior rink. San Diego had nothing.

And on the west coast of Florida? Tampa could offer an exposition hall on the state fairgrounds. But in Pinellas County, across the bay and home to St. Petersburg, there wasn’t an arena of any size anywhere to be found.

Yet the St. Petersburg bid had the most intriguing of all the options.

The Florida Suncoast Dome opened in March of 1990 with no permanent tenant, but it had a specific purpose: entice a Major League Baseball franchise to move to St. Petersburg. And it almost worked; in 1989 the Chicago White Sox were prepared to move south, before the city of Chicago and the state of Illinois raced in at the last minute to agree to finance a replacement for Comiskey Park.

Three years later, the San Francisco Giants had actually agreed to move to St. Petersburg, before the National League owners voted to deny the relocation. Finally, in 1995, Major League Baseball granted an expansion franchise, the Tampa Bay Devil Rays, to the dome, soon to be renamed Tropicana Field and finally giving it a tenant of its own.

But had the Karmanos bid for an NHL expansion team succeeded, it would have used the Suncoast Dome as a medium-term home, and the prospect of a 25,000-capacity rink in an area that could draw fans during the winter when they could see their home teams in person was of great interest to the NHL. Preliminary work was done in the form of market studies and feasibility evaluations on a new rink, but that was years down the road.

It’s entirely possible that Tropicana Field could have been the first and only shared home of hockey and baseball teams - or, it could have served as a deterrent for the Devil Rays being awarded in the first place.

Rising Confidence, Then a Sudden Collapse

Karmanos’ bid for a St. Petersburg team gathered steam throughout 1990, eventually approaching the status of what most observers felt was a virtual fait accompli. The strongest competition would come from across the state in Miami, as well as the two Canadian contenders, Hamilton and Ottawa.

Phoenix’s bid was the first to drop out of the derby, failing to raise the funding necessary to support a franchise. As the December Board of Governors meeting drew closer, where the league was expected to award the two expansion franchises, the Milwaukee and Houston groups also left the process, concerned about their return on investment from the $50 million expansion fee that the NHL wanted, in cash, upon awarding of the franchises.

And it was here that the first crack in what seemed to be a coronation of Karmanos’ St. Petersburg bid first appeared.

According to Rutherford, Karmanos went to the Board of Governors on December 6, 1990, with a proposal: instead of paying the $50 million up front, the idea went, the St. Petersburg bid would pay $30 million, and once the franchise got off the ground, it would pay the remaining $20 million out of the profits of the team.

It was a proposal that landed with a loud thud among the governors, one of whom told the St. Petersburg Times that despite the warnings from the board that his bid was at risk, Karmanos wouldn’t pony up. “They talked their way out of it,” said another. “We all figured they were the top choice, but they made some poor decisions.”

And this occurred despite the Tampa city council, two days prior to the meeting, voting down a procedural proposal for city financing of an arena. Tampa’s proposed owners, the Pritzker family of Hyatt hotel fame, had backed out in October, leaving the bid without any financing and without a long-term arena solution.

Yet when the decision came down after the presentations, the NHL stunned everyone. The two franchises would be awarded to Ottawa...and Tampa.

A Prayer Answered

What in the world had happened? Seattle backed out on the morning of the presentation. Of the two San Diego bids, one, fronted by Lakers owner Jerry Buss, had morphed into a generic Southern California bid that was light on specifics, and the other was headed by a prospective owner who wanted to get his name out there rather than actually compete for a franchise this time around.

The Miami and Hamilton bids faced similar obstacles in their financing proposals to the governors that the St. Petersburg bid did. All three proposed a down payment with full payment to follow at a later date, an arrangement that was coolly received by the Board of Governors.

Ottawa, meanwhile, came ready with $50 million in cash, and an owner who would build an arena in suburban Kanata after playing a few years at the Ottawa Civic Centre, home of the OHL’s Ottawa 67s. It was an easy call for the governors to award the first franchise, given that.

Which left Tampa, and a true miracle pulled off by Phil Esposito.

Less than a week before the Board of Governors meeting, and despite the council vote that effectively killed funding for the Tampa arena, Esposito somehow convinced a consortium of Japanese investors to bankroll his expansion franchise. Their presence was such a late addition to the process that practically no one had given Tampa any chance of being awarded the franchise, and could have led the three groups that offered payment plans to feel more secure in their positions with the board.

But when Esposito stunningly came to the meeting armed with a $50 million promissory note from his new best friends, the league called the bluff of the Miami, Hamilton and St. Petersburg bids. The league was going to get their money, and it didn’t mind getting it from a group that was going to play at a 10,000 seat arena for the foreseeable future.

Karmanos’ dreams of being awarded an NHL expansion franchise were toast, thanks to a Hail Mary pass by Phil Esposito that was somehow caught for a touchdown.

What Happened Next - and What Could Have Happened

Despite losing the competition for the expansion franchise in 1990, Karmanos never gave up his hope of owning an NHL team. He stayed in contact with the league, which Jim Rutherford said continued to offer input and direction, and finally got his chance to own a franchise in 1994, when his group purchased the Hartford Whalers from Richard Gordon for $47.5 million.

The rest is history: the move to North Carolina, the Stanley Cup, and all the rest would almost certainly have never happened had the group been successful in procuring the St. Petersburg expansion franchise.

And what would have been the effects of a successful expansion bid?

Amalie Arena likely wouldn’t exist, at least in its current form. Instead, an arena would probably have been built somewhere in Pinellas County, rather than in downtown Tampa. Ironically, following a single season at the fairgrounds, the Lightning played three seasons at the Suncoast Dome, where the theoretical expansion team would have made its home from day one.

Most relevant to Canes fans is that Karmanos would never have owned the Whalers, and would never have been in a position to move the franchise to Raleigh. But Rutherford says that, while it may not have happened right away, he thinks the Triangle was in a strong position to have eventually been granted a franchise, whether by expansion or relocation.

And in a bizarre twist, the groundwork for the Whalers’ move to Raleigh was laid by a totally separate failed expansion bid.

Four franchises would be awarded at the December 1996 NHL Board of Governors meetings. Charlotte businessman Felix Sabates spearheaded a bid to bring one of those franchises to Raleigh, proposing that they would play in the planned Entertainment and Sports Arena. Sabates’ bid fell apart in the summer of 1996 amid squabbling with the Centennial Authority over the scope of required renovations to accommodate a hockey team at what was then proposed to be solely a basketball arena.

But the bid was serious enough that both Sabates and the NHL had done a significant amount of due diligence on the Triangle market, and concluded that it could support a team. All of that information eventually made its way into the hands of Peter Karmanos, who was looking for a way out of the significant losses he was bankrolling in Hartford. “There was strong support from the league for the [Raleigh] market,” said Rutherford. “A number of people called and suggested their market would be a good place to go. In this case, the Centennial Authority, led by Steve Stroud, made a number of calls to Pete Karmanos. They gave the tour and the sales pitch of a new building, and things went from there.”

Within a matter of months, Karmanos was public enemy number one in Connecticut, and his franchise was on its way to North Carolina - although it happened at breakneck speed, with no real buildup on the ground to lay the foundation, and would require a two-year sojourn seventy miles away in Greensboro.

That complication that would never have been an issue with an expansion franchise that would have started play in either 1999 or 2000. The expansion franchises were eventually awarded to Nashville, Atlanta, Columbus and St. Paul. But six years after his pursuit of the NHL began, Karmanos had come full circle, and one way or another he was now owner of an NHL franchise in the southern United States.

But for one decision in December of 1990, the fates of three NHL cities would have been drastically reshaped. And as Karmanos rides into the sunset of his NHL ownership career, Hurricanes fans should be grateful that those mysterious Japanese investors came to the rescue of Esposito’s bid, simultaneously granting Tampa a franchise and setting the stage for Raleigh to eventually get one too.