Hoffman Estates officials work on financial plan for Sears Centre

Hoffman Estates officials are working on a financial plan to pay for a new management firm to operate the Sears Centre.

Based on recent deals at other arenas across the country, that could cost $125,000 to $250,000 per year.

"They need a national operator that has the contacts in the industry and booking capacity to really take the Sears Centre to the next level," said Joe Briglia, a vice president at International Facilities Group LLC., the consulting group the village hired to aid in the arena management proposal process.

Friday, the village sent out requests for proposals to Los Angeles-based AEG Live; Philadelphia-based Global Spectrum; West Conshohocken, Penn.-based SMG; and Ames, Iowa-based VenuWorks. The village is targeting a Jan. 1 start date for the new management team.

While the village sorts through the proposals, the arena will continue operations under the current management and its parent, the Ryan Companies. Assistant Village Manager Mark Koplin stressed the arena will not shut its doors, as all events scheduled, including lingerie football and youth cheerleading, will take place.

Koplin said the village wants the new operators to be more publicly accountable. The request sent out Friday states the arena project is "at a crossroads," with the village set to take over the 3-year-old arena from Ryan as early as January. That makes the village responsible for repayment of the $55 million construction loan, which could cost the village up to $88.4 million with interest over 22 years.

Potential arena operators are to submit to the village a budget for 2010 as well as projections through 2013. The village is also asking the firms to share in the arena's operational risk, calling it a "critical element." Even with an annual $1 million payment for the naming rights from Sears Holding Corp., the arena posted a more than $512,000 operational loss in 2008.

The proposal also stipulates the village will file with Cook County for a property tax exemption for the building once it becomes publicly owned. Officials hope that bringing the building off the tax rolls will free up money for other purposes, though it will also mean a loss of tax revenue for the village. The arena paid $1.8 million in total property taxes in 2007.

Competition from Rosemont's Allstate Arena has also hurt the Sears Centre's ability to draw acts and large crowds, and the request to the management firms asks how they'd address that. It also seeks plans for attracting new summer events and new sports teams, specifically hockey, to the arena.

Village Attorney Art Janura called the proposals merely a starting point in negotiations.

The matter will come before the village board after the operators attend an Oct. 23 meeting with the village's arena committee.