The Chicago suburb of Hoffman Estates, Ill., may be faced with taking ownership of the
Ryan Cos. guaranteed the loan payments to build the 3-year-old Sears Centre and is committed doing so for the next year. It’s been a tough stretch for the company, which is also saddled with its share of property taxes as well as debt service – a burden that would disappear if the city takes back the keys.
The issue isn’t one of foreclosure or bankruptcy for the venue or its owner. Ryan Cos. has indicated it is able to continue making payments on the reported $3.9 million per year in interest on the initial $50 million loan, according to the Daily Herald. But those payments have also kept the struggling venue from turning a profit.
While the city may not be thrilled with the prospect of losing its original partner in the arena, Bowen said he is optimistic about the Sears Centre’s prospects.
“It would give us an opportunity to make some money for a change, because we wouldn’t have to pay the property tax and we’d have somebody else picking up the debt service,” Bowen told Pollstar.
If Hoffman Estates takes ownership, it would free up about $1.8 million annually in property taxes.
Additionally, the city would not manage the 11,000-seat facility. Ryan Cos. brought in Bowen two years ago to increase activity and turn around a foundering venue.
With the word out that an ownership change is highly likely in the next year, facility management companies including AEG, SMG, IFG and Global Spectrum have begun to show interest in the property, according to Bowen.
“I think everybody is happy with my staff and what we’ve done,” Bowen said. “We’ve made some significant gains in growth in the two years since I’ve been here. When I got here there were no bookings in the foreseeable future. Since then, it’s become a very exciting venue, and we’ve shown growth while reducing the debt every year. We hope that trend continues, so whoever comes in would hopefully want to hang on to the staff.”