Independence Sticks With Global
City officials in Independence, Mo., are standing by their chosen facility management company for the forthcoming $52.5 million
Alison Williams, executive services director for the city of Wenatchee, told the Kansas City Star that the public facilities district that operates Town Toyota decided to cut ties after learning the building was expected to lose money its first year. Specifically, while Global Entertainment had reportedly projected earnings of $840,000, Town Toyota was instead on track to losses of $131,259.
“We were working through a process with them and they were so far off the pro forma that was anticipated to help support the board payments,” Williams said. “Our staff didn’t feel the corrected budget was a good faith effort to be where we wanted to be.”
Barry Kohlus, Sr. VP at Global Entertainment, told Pollstar that Town Toyota may not have met the company’s initial projections at the onset of the project, but Wenatchee officials were always kept informed.
“Early pro formas were optimistic, but it was a different economic climate at the time,” he said. “To be very frank, in its first year, an anticipated loss of low six figures for a building of [that] size is reasonable.”
As the Wenatchee facility and the Independence Events Center are situated in “completely different markets,” Kohlus said the venues aren’t really comparable.
For one, the Independence Events Center was built in a larger market, at the intersection of two major thoroughfares. Global has secured a deal to bring a Central Hockey League team in as anchor tenant and negotiations are apparently under way with a secondary anchor tenant.
Kohlus said the venue will fill a niche in the region for family events and concerts, and expects strong community support for the facility.
It appears that the strongest supporters of the facility at this point are Independence officials, who are sticking by Global Entertainment and told the Star that the 5,800-seat facility is opening under a different financial model than some of the other facilities Global worked with.
For one, the city has established a tax surcharge that will go toward the facility. And in its Independence contract, Global Entertainment has reportedly been required to establish a $500,000 reserve fund and cover any operating losses.
“We’ve focused on putting together agreements and put practices in place to make sure this arena is efficiently managed,” City Manager Robert Heacock told the Star. “We’ve been impressed with their local management and considerable experience in events management.”
The Independence Events Center is expected to open later this year.