BLOOMINGTON — Some private companies have expressed interest in purchasing the city-owned Grossinger Motors Arena, Bloomington Mayor Tari Renner said Friday.
"This could be huge if we could sell the arena or even if we had somebody take it over under a different set of rules," said Renner. "If we could move the arena off the cost-side of our ledger I think it would really help improve the quality of life in our city.
"We could get all of the economic benefits from the arena bringing thousands of people every year to our city and spending money here, but without having to pay for the mortgage on the arena," said Renner.
The city still owes about $22 million in debt on the facility that has operated for most of its 13 years at a loss under two different management companies. The operating losses have required the city to divert money from its operating fund to support the entertainment venue downtown.
Beginning April 1, the city could consider opting out of its five-year arena management contract through June 2021 if there's a better option.
"We are continuing to book events. Right now we have the next 10 weeks booked," said Lynn Cannon, who directs the 7,000-seat arena's daily operation for VenuWorks. "Unless somebody tells us differently, we're not expecting anything to change and we're going to continue working as if we're going to be here for the long-term."
Renner said he was disappointed when Cannon said in September that going forward the facility is projected to lose an average of $500,000 annually.
"The jury may be out because the other possible offers have yet to solidify, but we need to do better than a $500,000-a-year deficit," said Renner.
The city currently pays VenuWorks an annual management fee of $114,000, plus 5 percent commission on food, beverage and other sales at the arena, including naming rights.
The arena makes its money through selling tickets, concessions, club seats, suites, sponsorships and naming rights.
"At this point we don't have a proposal on paper that somebody is absolutely ready to give us," said Renner. "We know there are people who are interested in the arena, but until they put an offer on the table I can't really say that I would prefer that over VenuWorks.
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"If somebody was ready to buy the arena or essentially take over the payments, that would be preferable to continuing with a management company because then we're not on the line for the mortgage.
"If we did not have those payments, it would free us up to really move on the capital projects that are so desperately needed in out city," added the mayor. "It would allow us to float other bonds for things like the Hamilton Road extension, streets and sewer repairs, the library expansion and O'Neil Park pool. Those are things that should be at the very top of our to-do list."
Central Illinois Arena Management, which operated the site for 10 years before VenuWorks took over, did post an operating profit of $176,759 in fiscal 2013. The arena, which was known as U.S. Cellular Coliseum during CIAM's tenure, has operated at a loss ever since.
Its first year of operation cost the city about $350,000, which did not include the $2 million a year the city paid toward the downtown building's $29.5 million in construction bonds.
In 2008, the city decided to pay for those bonds through a dedicated quarter-percentage-point increase in the city's sales tax.
The venue's image also has been hit by separate embezzlement allegations involving CIAM's management and VenuWorks-employed former general manager Curtis Webb. Theft charges against Webb are pending in McLean County Circuit Court.
When the company opted not to renew its 10-year contract, the city hired VenuWorks, which took over management on April 1, 2016.