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City officials say they are looking forward to taking advantage of the Independence Events Center’s strengths as the facility transitions into local ownership and that facility consumers should hardly notice the change.
The city of Independence and Global Entertainment Corp. announced Monday a mutual agreement to end Global’s management and operation of the 11-month-old Independence Events Center. The Tempe, Ariz.-based Global had managed the events center since it opened to the public on Nov. 7, 2009. The city of Independence owns the facility.
The change will not affect the Missouri Mavericks, the events center’s Central Hockey League team tenant, or their season, which is under way. Tickets already purchased for upcoming Events Center concerts also will be honored, and the agreement ending doesn’t affect scheduled events or tenant arrangements, city officials said.
In a telephone interview Monday afternoon, City Manager Robert Heacock said the agreement ending took place as a mutual understanding and not as the result of one single problem or issue at the Events Center. Heacock is attending an out-of-town conference this week.
“Primarily, the city is interested in maximizing the financial return to the Events Center,” he said, “and we believe that this move will allow us to do that.”
Steven E. Lee, executive vice president and chief administrative officer for Global, said the agreement ending did take place on positive terms. Lee visited the Events Center during the Rob Zombie/Alice Cooper concert Oct. 6 and said he “was very pleased” with the site.
“Independence wanted to manage it, and it seemed like that’s what they wanted to do, so we didn’t want to stand in the way,” Lee said. “We think it’s a great building, and you’ve got a great hockey team out there. To be quite honest with you, we’re proud of the Independence Events Center. We wish the city of Independence the best of luck.”
The agreement ending also includes GetTix.net, Global Entertainment’s full-service ticketing company. In the Independence market, Heacock said, consumers seem more geared toward using Ticketmaster, a company the city will now utilize for ticketing. City officials encouraged residents who have questions about purchasing tickets for an upcoming event to contact the box office at 1-866-443-8849 or to visit the box office in person from 10 a.m. to 5 p.m. Monday through Friday at 19100 E. Valley View Parkway.
City officials say they are looking forward to taking advantage of the Independence Events Center’s strengths as the facility transitions into local ownership and that facility consumers should hardly notice the change.
The city of Independence and Global Entertainment Corp. announced Monday a mutual agreement to end Global’s management and operation of the 11-month-old Independence Events Center. The Tempe, Ariz.-based Global had managed the events center since it opened to the public on Nov. 7, 2009. The city of Independence owns the facility.
The change will not affect the Missouri Mavericks, the events center’s Central Hockey League team tenant, or their season, which is under way. Tickets already purchased for upcoming Events Center concerts also will be honored, and the agreement ending doesn’t affect scheduled events or tenant arrangements, city officials said.
In a telephone interview Monday afternoon, City Manager Robert Heacock said the agreement ending took place as a mutual understanding and not as the result of one single problem or issue at the Events Center. Heacock is attending an out-of-town conference this week.
“Primarily, the city is interested in maximizing the financial return to the Events Center,” he said, “and we believe that this move will allow us to do that.”
Steven E. Lee, executive vice president and chief administrative officer for Global, said the agreement ending did take place on positive terms. Lee visited the Events Center during the Rob Zombie/Alice Cooper concert Oct. 6 and said he “was very pleased” with the site.
“Independence wanted to manage it, and it seemed like that’s what they wanted to do, so we didn’t want to stand in the way,” Lee said. “We think it’s a great building, and you’ve got a great hockey team out there. To be quite honest with you, we’re proud of the Independence Events Center. We wish the city of Independence the best of luck.”
The agreement ending also includes GetTix.net, Global Entertainment’s full-service ticketing company. In the Independence market, Heacock said, consumers seem more geared toward using Ticketmaster, a company the city will now utilize for ticketing. City officials encouraged residents who have questions about purchasing tickets for an upcoming event to contact the box office at 1-866-443-8849 or to visit the box office in person from 10 a.m. to 5 p.m. Monday through Friday at 19100 E. Valley View Parkway.
“This is about the Independence Events Center,” Heacock said. “It’s not a macro comment on Global or any of their companies or their viability. We’re trying to look at what gives us the best chance to succeed, and we think that local, independent management offers that.”
During the transition, Heacock said the city will remain transparent on financial aspects at the events center. The Independence Events Center LLC, a wholly-owned subsidiary of the city, will provide management and operation with the 22 full-time and about 100 part-time employees who already work at the Events Center. Those people will become contract employees of the city until the city finalizes new management.
Heacock said the city will review options for long-term management throughout the next several months and plans to make a final decision by June 30, 2011.
Dating back to 2006, Global had marketed a product, both a facility and the Central Hockey League subsidiary, to the Kansas City area, Heacock said. Besides the CHL, Global Entertainment Corp. has many other subsidiaries, including Global Entertainment Ticketing (also known as GetTix.net).
“They were able to come in and basically say, ‘Not only can we work with cities to build a first-rate facility and manage that facility, but we can guarantee an anchor tenant for that,’” Heacock said. “I think it was a combination of those factors that led us to believe there was value in the various agreements that the city had entered into.”
Contractually, Global was required to create a $500,000 operating reserve fund in Independence, and any additional shortfalls in operating costs were then Global’s responsibility. However, the city paid Global $405,000, which includes future revenue receipts through sponsorships, City Counselor Allen Garner said. He said the city also purchased food service inventory from Global Entertainment.
Existing funds from bonds issued for the Events Center – not general fund dollars – funded the city’s $405,000 payment.
A shaky track record
On Friday, Global reported its financial results for the first quarter of its fiscal year 2011, which ended on Aug. 31. The company had a net loss of $600,000 during the period compared to a net loss of $200,000 for the three-month period that ended Aug. 31, 2009.
Global also is seeing declining revenues. The company had $1.8 million revenue for the first quarter of fiscal 2011 compared to $2.4 million during the quarter that ended Aug. 31, 2009. According to a release from Global, lower revenues in project management fees and licensing fees predominately caused the decline.
Independence is hardly the first city to end its relationship with Global Entertainment. In June 2009, Global’s contract ended at the Town Toyota Center in Wenatchee, Wash., less than one year after the facility opened. In January 2009, Rio Rancho, N.M., terminated its contract with Global to operate the city’s Santa Ana Star Center.
Among the 10 event centers included in Global’s portfolio, the first of which celebrated its grand opening in September 2003, Global appears to still have relationships with fewer than half. In February 2011, Global Entertainment plans to celebrate the grand opening of its latest events center, the Ford County Events Center in Dodge City, Kan. Adjacent to Boot Hill Casino and Resort, the Ford County Events Center was a decade in the making and includes architecture nearly identical to the Independence Events Center. (Both projects utilized Denver-based Sink Combs Dethlefs Architects.)
About 500 miles south of Independence, the Allen Events Center in Allen, Texas, celebrated its grand opening three days prior to the Independence Events Center. Similar to Independence, the city of Allen is now transitioning its management responsibilities from Global Entertainment.
According to Peter H. Vargas, Allen’s city manager, the city had signed an original 15-year agreement with Global Entertainment in 2007 that required several guarantees – first, Global had to guarantee a CHL tenant for 10 years. Next, Vargas said, Global had to operate the facility to meet its budget obligations and the city of Allen would not provide a subsidy.
“We were actually under an agreement when those issues happened, but we were aware of them,” Vargas said of other cities’ terminating their agreements with Global in 2009. “The fact of the matter is that there is never any guarantee, but we had certain thresholds in the agreement that had to be met.”
In June, Global asked the city of Allen for $36,000 to meet its payroll. Allen officials agreed to advance the money to Global as long as the company hand over management of the events center to the city, which took place on June 25.
A transition agreement between the city of Allen and Global will go before the Global’s board of directors this week and will then be placed on the Allen City Council’s agenda for action, Vargas said. He said the city will continue managing the Allen Events Center, and its CHL team, the Allen Americans, will remain unaffected.
Last week, the Allen City Council learned in a public workshop about the transition responsibility from Global Entertainment to the city. The Independence City Council study sessions, which take place every other week, tend to focus more on policy-oriented issues and staff updates on existing programs.
“I’m not really sure what particular issues we would have talked about in that particular setting that were related to this,” Heacock said.
Some positive aspects did take place in the city of Allen’s relationship with Global Entertainment, Vargas said.
“Global did a good job with regard to the building itself and the relationships with the contractors and the architects,” he said. “They did a really good job at building the building. Where they failed was in managing the facility, and I think they recognize that. We have a great facility here, and we have no reservations whatsoever about its continued success.”
Securing naming rights
The ending of an agreement with Global Entertainment positively affects the city’s ability to secure naming rights for the Independence Events Center, allowing officials to look at a variety of options, Heacock said.
“It’s no longer exclusively an item for Global to market,” he said, “but certainly, we would be able to work with any company that might have the ability to bring a naming-rights partner forward.”
Heacock called the naming rights “an important component in the financial modeling for the Events Center,” saying the revenue stream would result in hundreds of thousands of dollars annually, and with multiyear agreements, could result in millions of dollars.
“It’s a significant aspect of the budget for the facility,” Heacock said.
Earlier this year, Global was far along with one potential sponsor for renaming rights that didn’t come to fruition.
The Independence Events Center will celebrate its first birthday in less than three weeks. In that time, the facility has played host to numerous Central Hockey League games; concerts featuring the well-known musical artists Kenny Rogers, Martina McBride, the Goo Goo Dolls, Rob Zombie and Alice Cooper; the Preserving American Liberty event featuring Sarah Palin as keynote speaker; and dog and gun shows, among other events. A second Events Center tenant, the Missouri Comets indoor soccer team, will play their home opening game on Nov. 12.
“The general feedback the city has received has been extremely positive from the public to people associated with the concerts to anybody that has utilized the facility,” Heacock said. “We’ve had some positive feedback, and we’ve also had constructive feedback on things that we can improve on. It’s not as though it’s universally without opportunities to improve, but certainly we feel that it’s a very marketable facility. It’s been well-utilized. I think the future is bright at the facility.”
