BLOOMINGTON — Grossinger Motors Arena will get a $375,000 cash infusion from taxpayers to keep the city-owned facility operating in the black.
Without much discussion, the City Council voted unanimously for the transfer at Monday night's council meeting at the Bloomington Center for the Performing Arts.
"Essentially, by contract, anytime there is a cash flow issue at the Coliseum, we have to keep them afloat," Bloomington Finance Director Patti-Lynn Silva told The Pantagraph, referring to what previously was U.S. Cellular Coliseum. "It's in any contract with a third party. It's not their business. They are running our business."
Documents provided to the council show VenuWorks is projecting to end fiscal 2018 on April 30 with a deficit of $665,000 to $680,711. The downtown arena ended fiscal 2017 with an operating loss of $673,518, based on gross revenue of $2.6 million and total expenses of $3.3 million.
As she cast her vote, Ward 8 Alderman Diana Hauman said she was reluctantly voting in favor of the request from VenuWorks, the Ames, Iowa-based company that took over management of the venue last year.
"I just had higher expectations for VenuWorks in terms of setting budgets and maintaining those," Hauman said after the meeting. "We had a budget set for the arena, and I am just disappointed that they missed their projections for this year."
VenuWorks asked for the cash transfer "to rectify all of the arena's accounts payble as well as get the arena into its busy season," said Lynn Cannon, who directs the 7,000-seat arena's daily operation for VenuWorks, in a memo to the council.
Cannon cited several reasons for the lackluster financial performance, including a lag in sponsorship deals, a lack of bookings and home hockey games and bad publicity over the embezzlement allegations tied to the previous management company, Central Illinois Arena Management.
While not noted by Cannon in her memo, some of the bad publicity also stemmed from the arrest of her predecessor, Curtis Webb, on charges that he improperly used VenuWorks credit cards for personal expenses and travel while he was the director of operations from May to October 2016.
The arena also has experienced more than $30,000 in unexpected repairs and replacement expenses, said Cannon, blaming "negligent maintenance by previous management" in her memo.
Silva said the city has previously given VenuWorks money to help cover those expenses and others.
"We definitely gave them start-up costs in April 2016 when they first started because there were some cash flow shortages," said Silva, adding she did not have exact figures at hand.
During a 90-day transition period, VenuWorks did not charge the city a management fee. The city instead paid the firm a token $1 per month plus all VenuWorks employees' travel and lodging expenses and other supply costs.
"Then there was critical safety equipment we found that was not there in the building, and we funded that," Silva said.
In August, the council also approved spending $571,875 to make the sidewalks and ramps outside Grossigner Motors Arena compliant with the Americans with Disabilities Act and install barrier posts to keep vehicles out of pedestrian areas in front of the facility on Madison Street.
VenuWorks has a five-year contract in which it would be paid lower commissions and fees that CIAM received. The city also has the option to cancel the agreement after three years.
Hauman said she is keeping an open mind.
"They have been here a year and a half and they came into a situation that was less than ideal," said Hauman. "So I am still optimistic that they're going to be able to make the arena if not profitable, at least more profitable."
The facility posted operating losses of about $500,000 in each of the two previous fiscal years under CIAM.