Comcast division the choice for Sears Centre
Hoffman Estates is a step closer to hiring a division of cable TV's Comcast Corp. to run the Sears Centre.
The village board voted 5-1 Monday night to begin negotiations with Global Spectrum of Philadelphia. The firm would operate and book shows for the 11,000-seat arena near I-90 and Route 59. Though a contract has been discussed, the board hasn't approved a deal, but it's expected to do so later this month, Trustee Gary Pilafas said.
The board originally planned to discuss the matter during a closed session, but Pilafas asked to discuss it in public. He chairs the village's arena commission, which earlier on Monday voted 5-0 to recommend Global over another company that submitted a bid to run the arena, SMG World.
Officials were pleased with the presentations by both firms, but said Global explained their plan with more detail.
"We have done our due diligence here," Pilafas said.
Trustee Cary Collins voted against the measure, while Trustee Karen Mills was absent.
Global's first proposal is a 10-year contract worth $135,000 per year plus a cut of the receipts that still must be negotiated.
Global officials met with the arena commission Friday and again Monday, this time with a revised proposal that included a plan where the firm would not be paid if it didn't hit financial projections.
"We don't expect to lose any money (in the first year)," Global's Senior Vice President Frank Russo said.
A subsidiary of Minnesota-based developers Ryan Cos. has owned and operated the Sears Centre since it opened in 2006. After suffering numerous setbacks - including a failure to retain active minor league sports franchises and difficulty attracting crowds - Ryan arranged earlier this year to walk away from the arena, as it suffered a $512,000 loss in its operating budget last year.
Ryan threatened to close the building last month but agreed to operate it until Dec. 31 while the village finds a new operator to take over by Jan. 1.
Ryan's exit leaves the village responsible for repaying a $55 million loan it backed for Ryan to construct the arena, which could cost taxpayers $88.4 million over 20 years.
Global officials on Monday said they would not assume the loan payments. The company manages 87 facilities, but none in the Chicago area.
Global representatives also discussed re-branding the arena, because they say it has suffered from a bad reputation.
Trustee Raymond Kincaid asked Global if the company would be able to stand up to Allstate officials if they are critical of the Sears Centre.
Global Chief Operating Officer John Page said his company has enough pull in the industry to convince performers to come to Hoffman Estates, even if the arena gets a negative recommendation.
"They know who we are and what we do as a company," he said.
The firm projects 132 shows during 2011 at the arena, the first full year of the contract. Next year would be treated as a transitional time, with the arena playing host to events already planned by its current operator. Global also said it has talked with IHSA officials about trying to move the high school boys basketball championships from Peoria to Hoffman Estates.
Collins was wary of the figures, reminding the board that Ryan also made lofty promises in 2005 for hosting more than 100 events at the arena per year. They ended up averaging about 84 per year.