Hoffman Estates hears plan for seat sales

In a perfect world, Hoffman Estates officials would use all money from sales of corporate seating at the Sears Centre toward whittling down the building's loan.

That may happen eventually, but under village ownership, it will take one or two years before the building makes a profit on the operational side, officials say. Initially, in fact, it actually could suffer a $1.2 million operational loss.

But village officials - including Trustee Gary Pilafas and Village Manager James Norris - said Monday that January was a good month for the arena at I-90 and Route 59, and the projected deficit could be shrinking.

During a meeting Monday, the village board heard a pitch from Front Row Marketing Services to sell premium seating - including suites and boxes - to corporations. There are 43 suites at the Sears Centre, and 10 have been leased. Front Row hopes to increase that number, while selling naming rights to other sections in the arena. Many arenas depend on such contractually obligated income. In many cases, it goes toward paying off debt.

"We are the best at generating revenue, and that's what ultimately this building needs," said George Manias, a regional vice president at Front Row.

A contract hasn't been finalized, but Front Row could be paid a commission of 15 to 20 percent on its overall sales. Village Attorney Art Janura said a special board meeting could be scheduled next week to approve a contract. Front Row estimates $720,000 in premium seating sales this year, but Manias said he confident his company would shatter those expectations.

Manias took opportunities to criticize the "past regime" of the Ryan Companies, the Minnesota-based developer that ran and owned the Sears Centre for the last three years. He said Ryan's officials never maintained a proper level of communication with their clients.

"Over the last three years, the building hasn't lived up to the potential at all," Manias said.

Manias said Front Row, which has been working at the arena under a 90-day temporary contract, has already sealed a deal with Pepsi Co. to make the soft drink the official beverage of the Sears Centre. They're also close to a deal with Blue Cross and Blue Shield. That amounts to about $100,000 in sales already.

Front Row is a division of Comcast Spectacor, as is Global Spectrum, the company hired by Hoffman Estates to run the arena. The village board has been regularly listening to presentations from officials representing Comcast's fledgling groups, including Comcast's food service vendor. Manias touted Comcast as "one of the most powerful companies in the world" as a way to lure sponsors and acts to the Sears Centre.

Trustee Cary Collins asked about any possible conflict of interest issues with hiring another division of Comcast.

Front Row's workings would be different from the naming rights deal the arena has with Sears Holding Corp. - a 10-year, $1 million per year contract used to pay off the construction loan. It's the fourth year of that deal. Ryan is paying off the $55 million loan this year. The village will take over payments in 2011, and with interest over the loan could cost the village $88.4 million. Officials are still trying to figure out how to repay the loan without a property tax hike, which could be discussed later this year.