AEG Scores Twin Cities Target
AEG was recently selected to operate the city-owned Target Center in Minneapolis in an 18-year deal that will inject a fresh shot of funding into the aging arena.
Bob Newman, COO of AEG Facilities, explained the company’s plans for the 17-year-old arena in a statement.
"We are looking forward to our partnership with the City of Minneapolis and to working side-by-side with the Minnesota Timberwolves organization to program and operate Target Center, an arena we believe is one of the most versatile, best known, well conceived and supported facilities in the United States," Newman said.
He continued. "With our resources, the planned upgrades to the arena and the continued support from the community, we are confident that Target Center will once again be known as one of the finest equipped, operated and customer-service friendly venues in the region."
The company will invest $2 million in improvements and enhancements at the 19,500-seat facility during the next two years, according to the statement, which could make it a firmer contender in the race to book shows in the region. It will also submit marketing and re-branding plans for the city’s approval by September.
AEG senior VP of business development Sims Hinds told the Minneapolis Star Tribune that at this point "two buildings split the pie" in the Twin Cities, referring to the competition that often ensues between the Target Center and the newer Xcel Energy Center in neighboring St. Paul. "Our job is to bring more of the pie to the Target Center," he said.
And the city has made sure of that – by inserting a noncompete clause into its contract with AEG, according to the Star Tribune.
The clause reportedly states that AEG is barred from developing a live entertainment venue in the Twin Cities metro in direct competition with the Target Center without city council approval.
That could put a wrench into the company’s previously announced plans to build and manage a 6,000-seat performing arts center at the Mall of America in the suburb of Bloomington. AEG began talks with mall ownership last November.
Mayor R.T. Rybak told the paper the city sees the mall project as a competitive threat to the Target Center, and officials added the clause to assert more power over AEG’s involvement with the PAC.
"We wanted [AEG’s] first focus to be on Minneapolis and Target Center, and we wanted them to understand that there’s already a problem with two competing facilities," Rybak said. "We negotiated that clause to put us in control. We structured it so we have the ability to veto" the project.
But AEG spokesman Michael Roth wouldn’t go so far as to say the PAC project has been put on the back burner.
"We’re still exploring the opportunity and we’ll discuss any decisions with our new partners at the city," Roth told Pollstar.
While this partnership sees AEG expanding into facility management in a region that has remained largely untouched by the company in recent years, the deal also marks a coming home of sorts for AEG president Tim Leiweke.
Leiweke served as VP of the Minnesota Timberwolves during the late ’80s, and apparently set a benchmark for sponsorship agreements at the time by inking a $2 million-per-year naming-rights deal for the Target Center.