Arena Losses Shrink Ahead Of Reworked Contract Kicking In | WGLT

Arena Losses Shrink Ahead Of Reworked Contract Kicking In

Jul 16, 2019

Operating losses at the city-owned Grossinger Motors Arena were not as bad as expected for the fiscal year that ended on April 30.

The arena posted an unaudited net operating loss of $270,921 for fiscal year 2019, well below the $495,514 loss that had been budgeted, according to the arena’s fourth-quarter report recently posted on the City of Bloomington’s website. It was also less than the operating losses in 2017 and 2018—each over $660,000.

“While revenues came in under budget for the year, expenses came in significantly under, with the most material component being compensation,” City of Bloomington Finance Director Scott Rathbun said via email. “VenuWorks did a good job managing staffing, given the revenue challenges.”

The arena did have a fourth quarter net operating profit (February, March, and April) of $24,154. That was less than expected. Events included the country music performer Kane Brown in February, a sellout that generated a $42,270 profit for the arena, city records show. A rescheduled Old Dominion show posted a $37,999 profit.

The arena “did not lose money on any of the shows we booked” in fiscal year 2019, said Executive Director Lynn Cannon with arena manager VenuWorks.

“The biggest savings in expenses came from payroll and utilities,” Cannon said. “During the last year, the lighting in the arena has been in the process of being replaced with new LED fixtures, which conserve electricity usage.”

VenuWorks said the arena made a $4.1 million contribution to the local economy in February, March and April, based on economic impact formulas from the Bloomington-Normal Area Convention and Visitors Bureau and the Illinois Office of Tourism.

The $270,921 operating loss does not include the city’s debt payments related to construction of the arena over a decade ago. That amount is around $1.5 million this year.

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. In April, the Bloomington City Council reworked its contract with VenuWorks (for 2020 and beyond) to protect the city from incurring any annual losses over $350,000. 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 pays VenuWorks $114,000 annually to run the arena. The city also gets a portion of proceeds from concessions, sales, and naming rights.

VenuWorks plans to present its annual report to the Bloomington City Council in September, she said.

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