Bloomington To Rework Arena Deal; Shift Some Financial Risk
Bloomington aldermen Monday will consider a revised contract with the firm that runs Grossinger Motors Arena.
VenuWorks told the city council last summerit should expect to lose an average of $500,000 annually on the entertainment venue.
City Manager Tim Gleason said the new contract budgets $350,000 in losses for the downtown arena in each of the next two years.
The deal calls for VenuWorks to cover a portion of costs which exceed that amount, up to 50 percent of the of venue's management fees.
The city had budgeted $400,000 to subsidize arena operations in the budget year that begins May 1.
The city pays VenuWorks $114,000 annually to run the arena. The city also gets a portion of proceeds from concessions, sales, and naming rights.
“It gives us an opportunity to assess as a community what our next steps are and it gives VenuWorks an opportunity to perform at a higher level than what’s occurred in the past,” Gleason said.
Gleason said he wasn’t criticizing VenuWorks management, but said the city doesn’t have the appetite for subsidizing the arena to the extent that it has.
“They are playing the cards they have been dealt, given our market, given two new facilities that were right in between Champaign and Peoria,” Gleason said. “To say that (those financial losses are) acceptable, that’s not and it shouldn’t be.
“They need to explore whatever the possibilities are that we can find our niche. It’s an amenity for the community but also we don’t want it to be a taxpayer burden.”
Grossinger Motors Arena Executive Director Lynn Cannon said the venue projects to come in under $350,000 in losses in the budget year that ends April 30.
“I think that (the city) sees us as having turned things around this past year, and knowing that the numbers are where they are at, they are hoping we can continue that line,” Cannon said.
The new agreement would also allow the arena to charge a new $1.50 parking fee for events that are expected to draw more than 500 attendees. That revenue would go directly to the city. That would replace the 50 cents per ticket the city currently gets.
Cannon added the loss of its last remaining sports tenant, the Central Illinois Flying Aces hockey team, gives VenuWorks more flexibility for filling open dates, though she hopes the hockey team returns after its one-year hiatus.
“We have been working very hard to keep the expenses of running this arena down and we’ve worked really hard to bring in great events that will make money for the city,” Cannon said. “Our focus is going to be on continuing that train and continue to bring that deficit down to the best of our ability.”
VenuWorks is in the fourth year of a five-year contract with the city. The city had until April 1 to terminate its contract without cause. The city took no action but officials have said they were working to renegotiate a more favorable deal for the city.
Gleason said the city has not been looking for anyone else to run or buy the facility.
“That interest came unsolicited,” Gleason said.
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