When a loss can be a cultural gain
When is $950,000 in losses good news? When it's the reduced figure from $1.2 million in anticipated losses for the Sears Centre in Hoffman Estates.
Hoffman Estates taxpayers, and others in the area who appreciate sports and entertainment options, got the news of an improved outlook for the struggling entertainment venue recently.
Daily Herald staff writer Ashok Selvam reported the new management company for the arena is outpacing trustees' expectations since taking over in January.
The company, Global Spectrum, predicted in December the facility would lose $1.2 million this year, but revised that recently to a $950,000 loss after attracting strong attendance with Elton John and Hillsong United concerts.
The picture looks rosier indeed when put into context. Before the village took ownership after previous managers Ryan Cos. bailed last year, that firm had lost $10.8 million in 2007 and $5.1 million in 2009.
The improved first five months even had one trustee, Gary Pilafas, predicting a property tax increase no longer will be needed to pay off Sears Centre loans.
Hoffman Estates officials took over the facility and the construction loan that could amount to $88.4 million over 22 years with inflation.
It might be premature to suggest a tax increase won't be necessary. And $950,000 in losses still is significant, so we would encourage Mayor William McLeod, Pilafas and the other trustees to take a conservative approach before declaring the crisis over.
Hoffman officials seem so pleased with Global Spectrum's work in just five months they approved a three-year contract for the firm to continue handling the operations at the 11,000-seat facility, at I-90 and Route 59. The retroactive contract from January through December 2012 pays Global $132,000 per year plus an inflation adjustment and performance incentives.
Essentially, the contract calls for Global to make more if it succeeds in retiring a certain level of the arena's debt. If Global retires even more debt, it gets an even bigger cut.
The concept seems a wise one. Hoffman Estates officials also would be wise to continue to keep close tabs on the income and expenditures and on the management company's moves.
Two strong concerts in just five months' time is a hopeful start, but it is just a start for a facility that still faces significant debt.
Here's hoping for many, many more great concerts and sporting events we all can enjoy at Sears Centre. And enough revenue to build upon to save Hoffman Estates taxpayers a bigger bill. Perhaps the new team and Hoffman officials will forge a path toward retired debt and even a profit in the nearer future. That would be most welcome news indeed.