keoadmin
05-12-2009, 09:46 PM
Now that Kingston's K-Rock Centre has been operating for over a year it may be time to review its financial prospects. SMG, the operator of the K-Rock Centre, has similar management arrangements in other cities. Below is a report of the financial results for an arena managed by SMG in Albany, New York.
-- Kingston Electors
Albany, New York.
Arena pact up for review
Legislature will consider a resolution tonight to extend Times Union Center deal
http://www.timesunion.com/AspStories/storyprint.asp?StoryID=798946
By CAROL DeMARE, Staff writer
Monday, May 11, 2009
ALBANY — Lawmakers will consider a resolution tonight extending Albany County's contract with the company that manages the Times Union Center for another 10 years and readjusting financial terms to give taxpayers an additional yearly profit of more than $100,000.
Since the South Pearl Street facility opened on Jan. 30, 1990, as the Knickerbocker Arena, it has been managed by the Philadelphia-based company known then as Spectacor Management Group and now as SMG.
A resolution, sent by the Civic Center Committee to the 39-member Legislature, authorizes County Executive Mike Breslin to terminate the current contract with SMG that runs to Dec. 31, 2010, and enter into a new agreement for the operation and management of the arena for a term beginning this July 1, and ending Dec. 31, 2020.
SMG was initially chosen as the manager after a request for proposals was put out by the county nearly 20 years ago. It has continued to have its agreement renewed.
Now, "by extending the existing contract, no RFPs (Request For Proposal) are required," said William Conboy, the legislature's Democratic majority counsel. "It's in the nature of a professional services contract," which is not generated by low bidder but by qualifications and expertise, he said.
Basically, SMG is agreeing to give the county more money from profits, and decrease its fee, Conboy said. The operations fee will be reduced to what it was in 2001, he said.
Conboy said the guaranteed income to the county from arena operations is increased by $100,000 under the extended agreement, and the fees charged by SMG are reduced by $50,000 a year. "So there's a potential benefit to the county of $150,000-a-year more," he said.
If the added income materializes, it could mean $1.5 million over the 10-year life of the contract, he said.
"We want to keep them as managers," Conboy said. "They're the best."
Breslin said under SMG management the Times Union Center has generated "a significant profit for county taxpayers and has become the premier sports and entertainment venue in the Northeast."
Albany Legislator Dan McCoy, chairman of the Civic Center Committee, which voted unanimously to move the resolution to the floor, said 10-year contracts are the industry standard for sports and entertainment facilities.
He said he's pleased with SMG, especially with the tough economy. "SMG has always been able to pull a profit out of the arena," he said.
Times Union Center General Manager Bob Belber declined to discuss the new package until after the vote, but his name came up at the committee meeting.
"One of the things we put in the contract is that Bob is part of the package deal," McCoy said, "and he stays as long as SMG stays."
Should there come a time for a new manager, the county would be involved in negotiations, McCoy said. "They can't just plop someone on us."
Committee member Mary Lou Connolly, a Guilderland Democrat, agreed. She suggested to the committee that Belber's position be secured in the new contract.
"He's from the community, he knows the community and he's aware of the movers and shakers in the community, and when it comes to filling the boxes and doing a good job inside the facility, he does it," Connolly said. "He's one of the reasons, I strongly believe, that we've been successful even in hard times. He knows what acts will sell here, and his finger is on all the national sports events, many of which he has brought into this community."
Carol DeMare can be reached at 454-5431 or by e-mail at cdemare@timesunion.com.
Arena profits
Operating profits at the Times Union Center for the last five years:
2008: $901,405
2007: $1,116,518
2006: $1,327,789
2005: $806,116
2004: $1,102,890
-- Kingston Electors
Albany, New York.
Arena pact up for review
Legislature will consider a resolution tonight to extend Times Union Center deal
http://www.timesunion.com/AspStories/storyprint.asp?StoryID=798946
By CAROL DeMARE, Staff writer
Monday, May 11, 2009
ALBANY — Lawmakers will consider a resolution tonight extending Albany County's contract with the company that manages the Times Union Center for another 10 years and readjusting financial terms to give taxpayers an additional yearly profit of more than $100,000.
Since the South Pearl Street facility opened on Jan. 30, 1990, as the Knickerbocker Arena, it has been managed by the Philadelphia-based company known then as Spectacor Management Group and now as SMG.
A resolution, sent by the Civic Center Committee to the 39-member Legislature, authorizes County Executive Mike Breslin to terminate the current contract with SMG that runs to Dec. 31, 2010, and enter into a new agreement for the operation and management of the arena for a term beginning this July 1, and ending Dec. 31, 2020.
SMG was initially chosen as the manager after a request for proposals was put out by the county nearly 20 years ago. It has continued to have its agreement renewed.
Now, "by extending the existing contract, no RFPs (Request For Proposal) are required," said William Conboy, the legislature's Democratic majority counsel. "It's in the nature of a professional services contract," which is not generated by low bidder but by qualifications and expertise, he said.
Basically, SMG is agreeing to give the county more money from profits, and decrease its fee, Conboy said. The operations fee will be reduced to what it was in 2001, he said.
Conboy said the guaranteed income to the county from arena operations is increased by $100,000 under the extended agreement, and the fees charged by SMG are reduced by $50,000 a year. "So there's a potential benefit to the county of $150,000-a-year more," he said.
If the added income materializes, it could mean $1.5 million over the 10-year life of the contract, he said.
"We want to keep them as managers," Conboy said. "They're the best."
Breslin said under SMG management the Times Union Center has generated "a significant profit for county taxpayers and has become the premier sports and entertainment venue in the Northeast."
Albany Legislator Dan McCoy, chairman of the Civic Center Committee, which voted unanimously to move the resolution to the floor, said 10-year contracts are the industry standard for sports and entertainment facilities.
He said he's pleased with SMG, especially with the tough economy. "SMG has always been able to pull a profit out of the arena," he said.
Times Union Center General Manager Bob Belber declined to discuss the new package until after the vote, but his name came up at the committee meeting.
"One of the things we put in the contract is that Bob is part of the package deal," McCoy said, "and he stays as long as SMG stays."
Should there come a time for a new manager, the county would be involved in negotiations, McCoy said. "They can't just plop someone on us."
Committee member Mary Lou Connolly, a Guilderland Democrat, agreed. She suggested to the committee that Belber's position be secured in the new contract.
"He's from the community, he knows the community and he's aware of the movers and shakers in the community, and when it comes to filling the boxes and doing a good job inside the facility, he does it," Connolly said. "He's one of the reasons, I strongly believe, that we've been successful even in hard times. He knows what acts will sell here, and his finger is on all the national sports events, many of which he has brought into this community."
Carol DeMare can be reached at 454-5431 or by e-mail at cdemare@timesunion.com.
Arena profits
Operating profits at the Times Union Center for the last five years:
2008: $901,405
2007: $1,116,518
2006: $1,327,789
2005: $806,116
2004: $1,102,890