Over the next month, Bloomington city leaders will decide whether to keep or fire the company that runs Grossinger Motors Arena. It won’t be an easy decision.
Last Thursday, country music star Kane Brown performed a sold-out show at the city-owned arena. Two days later, craft beer fans and foodies packed the floor for the second year of the popular Bacon and Beer Festival. But in that same week, the arena lost its last remaining anchor tenant, when the Flying Aces junior hockey team announced it wouldn’t be returning next season, citing poor attendance.
Bloomington is accustomed to bad news from the arena. But it’s those sold-out successes like Kane Brown that also weigh on aldermen and city staff as they decide by April 1 whether to opt out of their management contract with VenuWorks. Why can’t they just book more shows like that? If they can’t, can we find someone who will?
City Manager Tim Gleason said that when he was hired seven months ago, the money-losing arena was a Top 5 priority for aldermen—especially reversing negative public perception that’s older than the building itself.
“It’s a heavy lift. But we have opportunities,” Gleason said on GLT’s Sound Ideas. “And at the end of the day, we don’t have any other course of action other than to improve where we’ve been the past couple years.”
VenuWorks took over management duties at the arena in 2016. It replaced Central Illinois Arena Management (CIAM), which a few months later saw five of its top officials indicted for allegedly stealing hundreds of thousands of dollars from the arena.
Steep operating losses have continued under VenuWorks. The arena posted an operating loss of $667,349 last year. It’s lost another $226,967 in the first half of this fiscal year (May-October 2018). Those losses are in addition to the $1.4 million in annual debt payments the city is paying off for the original construction of the arena.
The city’s five-year contract with VenuWorks runs through June 2021, but it can opt out without cause by April 1. If it opts out, the city might look to hire another management company, though the options are limited. The biggest ones are AEG, SMG, Spectra, and VenuWorks; AEG and SMG are in the process of merging.
“There are some options out there, about four or five. But it is getting to be a smaller pool,” said Don Muret, senior editor at VenuesNow, a trade publication. Its parent company, Oak View Group, also manages venues.
Aside from VenuWorks, the big management companies “aren’t necessarily looking for (clients) in smaller communities,” said Brad Mayne, president and CEO of the International Association of Venue Managers (IAVM). One reason, he said, is it’s difficult to find and hire experienced staff in smaller communities—or those willing to move.
“When you’re one of the bigger companies, and somebody’s working in Anaheim, and they say, ‘Would you like to move to Bloomington?’ That individual might say, ‘I’m in a market of 12 million people. I’m not sure I’d be comfortable going to a market of 200,000,’” said Mayne, who worked in Cedar Rapids, Iowa, earlier in his career.
“The question is, is Bloomington one of those communities that (a management company) has the bandwidth and the interest to get involved in?” Mayne said.
The city could theoretically manage the arena itself, similar to the Bloomington Center for the Performing Arts. When asked about that possibility, Gleason said he still needed to talk with aldermen.
“I truly have had no idea meaningful discussion with my elected officials,” he said.
CHALLENGES AHEAD
There are many challenges facing the arena, whoever is in charge.
After five years at the arena, the Central Illinois Flying Aces will not return to Bloomington for the 2019-20 season. The team played in the USHL, the top junior league in the country and the launching pad for many elite college and NHL players. But the Aces have struggled to draw fans, averaging around 560 people in attendance the last two seasons, according to city records. That cuts into the bottom line for the arena; each Aces game averaged a profit of around $3,728 for the arena. By contrast, four Hot Wheels Monster Trucks shows last month led to a $31,757 profit in a single weekend.
Arena - Ups and Downs
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The Aces will take next season off and could move to another market.
“We’ve had good, competitive teams year in and year out in Bloomington,” said Zoran Rajcic, vice president of Flying Aces owner CSH International. “But we haven’t been able to get the marketplace to buy into supporting a local product there. With the losses that have mounted over the last couple years, it’s been difficult. So we had to try and stop the bleeding and evaluate what we can do with the franchise.”
It’s possible the arena won’t have any regular sports tenants in 2019. The Edge indoor football team—a mainstay at the arena since its 2006 opening, albeit with different names and logos—will not return for the 2019 season, said General Manager Charles Welde.
“I’ve gotten maybe three phone calls asking, ‘Hey is there going to be a team?’ At some point, you have to listen to the market,” Welde said. “Are we going to be missed if we don’t play this year? I’m not sure we are, unfortunately.”
Welde said Bloomington’s revolving door of sports teams have consistently underestimated the competition that exists for the community’s entertainment spending. The competitors aren’t just the Normal CornBelters or Illinois State University athletics, he said. It’s high school sports on a Friday night. It’s a day trip to Wrigley Field that may eat up an entire month of disposal income.
That makes it hard for a team like the Edge. The team drew on average 919 fans to each of its 2017 games, in an arena that holds nearly 7,000, city records show.
“You have all these other things you’re competing with—some obvious, some not obvious,” Welde said. “And some of them I don’t know you can overcome. If someone is just mad that the arena was built, and they’re not gonna go, it doesn’t really matter what my marketing pitch is. They’re not coming.”
The Bloomington Flex pro basketball team last played at the arena in 2015 but struggled to establish a fan base. A financial dispute between the Flex and the arena delayed basketball’s return, but that has now been settled, said Ed Schumer, commissioner and CEO of the Midwest Professional Basketball Association (MPBA).
Now, the MPBA is partnering with a New York-based Unified Basketball Alliance to bring several new teams to the Midwest, Schumer said. Bloomington, Peoria, and Springfield are all possibilities, he said. But he said he’s hesitant about returning to Bloomington given all the uncertainty about the arena—including who will run it.
“It’s a concern,” he said. “We’re not sure if the people we’ve created the relationship with are in fact going to be the people we would be dealing with. Hearing the rumors it will be sold obviously causes some (concern). If that’s the case, where would our agreement be?”
Those rumors appear to be just that. Despite some preliminary recent conversations with potential buyers, those talks never advanced, Gleason said.
“I don’t want to give the impression that anything has any traction,” Gleason said.
Gleason said he hasn’t discussed the April 1 opt-out deadline in depth with aldermen. But he said VenuWorks has made strides, especially since a September 2018 city council meeting when Arena Executive Director Lynn Cannon told aldermen they should expect an average $500,000 annual operating loss.
“VenuWorks has, in my opinion, has really stepped up the energy and the effort,” Gleason said. “They’ve tried to cast a wider net and be more aggressive in the bookings.”
Cannon told GLT that “we’re in good shape with the city.”
“We’re looking forward to continuing the relationship through the end of the five-year deal,” she said.
One argument for keeping VenuWorks is that it now has three years of experience in the market—a learning curve that another manager would have to repeat.
“We took a lot of shots at some shows that we thought would do well, and they didn’t do as well as we expected,” Cannon said. “But within this last fiscal year, I think we’ve had at least base hits on every one of our shows. We’ve certainly hit a couple of home runs (including Kane Brown). The good news is we didn’t strike out on anything this year. We didn’t have any losses on shows.”
SILVING LINING?
Cannon said VenuWorks hoped the Flying Aces—and its 30 home games—would return for the 2019-20 season. But their absence will open up more weekend dates for booking of other better-attended events, she said. There is a lot of competition for shows, with Bloomington-Normal surrounded by other venues in Champaign-Urbana, Springfield, and Peoria, plus bigger arenas in Chicago and St. Louis.
“I hope to be able to match or even surpass the attendance numbers we’ve had with the hockey team in the building,” Cannon said.
Another silver lining could be extra availability of the arena to help alleviate a bottleneck next door at the Pepsi Ice Center (PIC), where ice time is hard to come by because of high demand.
The Bloomington Youth Hockey (BYH) organization, with 115 players on seven teams, already has to buy ice time in Pekin and Peoria to accommodate game and practice needs, said BYH President Shawn McVey. When BYH can book ice in Bloomington, it’s usually at the arena, where it spends over $62,000 a year on rental fees, or $280 an hour.
“(The Flying Aces) departure and the uncertain future of (the arena) make us nervous about the future of youth hockey in Bloomington,” McVey said. “If the ice were not made available to us in (the arena), it would jeopardize our club’s ability to roster teams as well as the other clubs that utilize that ice. I have reached out to the other clubs that use ice in Bloomington so that we can sit down and come up with a strategy to urge the city to keep the ice in Grossinger Motors Arena. We all share the same fate if we lose the ice in that building.”
"The good news is we didn't strike out on anything this year. We didn't have any losses on shows."
Cannon said the arena will have “ice during the hockey season even without the Aces.”
“We've always partnered with the city and the Pepsi Ice Center on youth and adult league rentals on the off-nights here in the arena,” she said. “This will continue and perhaps even be able to expand since those 30 dates are now opened up."
Added Gleason: “We see this as an opportunity, to be quite honest.”
As the April 1 opt-out deadline nears, it’s unclear which direction aldermen are leaning. Seven of nine aldermen did not respond to GLT’s request for comment: Jamie Mathy, David Sage, Mboka Mwilambwe, Amelia Buragas, Scott Black, Diana Hauman, and Kim Bray. Alderman Joni Painter from Ward 5 declined to comment.
Alderman Karen Schmidt from Ward 6 praised VenuWorks for some of its most creative bookings, such as the Bacon and Beer Festival. But it’s also had a lot of challenges, she said.
“I very much hoped there would be a lot more events there, and a lot more variety. I’m somewhat disappointed,” Schmidt said.
Regardless of whether VenuWorks is retained, Schmidt said she wants to see the city set up a more formal process for receiving ideas from the community about programming. There’s no Bloomington Arena Advisory Committee, for example.
“There’s really no place to take those ideas, so I’d like to see that happen,” Schmidt said. “The arena belongs to people in the city. We’re paying for it.”
Even with a management change, the 13-year-old arena won’t be a quick fix-it job, said Mayne with IAVM. Communitywide support is essential for smaller venues, from elected officials to Chambers of Commerce to tourism groups, he said.
“Somebody doesn’t just come in and suddenly everything gets turned around,” he said.
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