The county spent $4 million in 2011 to subsidize its baseball stadium, convention center, War Memorial arena and Civic Center theaters.
Jim Commentucci / The Post-StandardA big crowd was at Alliance Bank Stadium in Syracuse for a game between the Chiefs and the Scranton-Wilkes Barre Yankees in this Aug. 12, 2011 photo.
Story by staff writers Rick Moriarty and Marnie Eisenstadt
Syracuse, N.Y. -- Saddled with paying millions of dollars in yearly subsidies to run its convention center and baseball stadium, Onondaga County is looking for private companies to manage both — and may even put the stadium up for sale.
The county Purchasing Department last week sent out letters to nine companies seeking vendors qualified to “manage, operate and market any or all of” Alliance Bank Stadium and the Oncenter complex, which consists of the Nicholas J. Pirro Convention Center, the War Memorial arena, the Civic Center theaters and a parking garage next to the convention center.
The letters, which went to some of the world’s largest venue management companies, also said the county will consider any purchase offers for the 11,000-seat stadium, which is home to the Syracuse Chiefs, the Triple-A minor league affiliate of the Washington Nationals.
But Matt Millea, deputy county executive for physical services, said the county is focused on finding a company to manage the stadium and does not expect to receive any purchase offers.
He said the statement that the county would entertain purchase offers for the stadium was a “trial balloon” that probably would not go very far. Stadiums in the Northeast are usually municipally owned because the weather limits the number of days they can be used for sporting events and concerts, and they almost always need a government subsidy, he said.
“There’s not a big market for baseball stadiums,” he said.
Millea said the county expects to have to continue to subsidize the Oncenter and the baseball stadium. But it is investigating if a private company could manage them more efficiently and reduce the subsidy needed.
Both the convention center and the baseball stadium are a financial drag on county taxpayers. The county spent $3 million this year to keep the Oncenter afloat after the convention center started running out of money to pay its bills. County Executive Joanie Mahoney has asked the Legislature for $1.6 million to subsidize its operation next year.
County taxpayers annually pay about $1 million to operate the baseball stadium. It will spend $1.1 million on it in 2011, and Mahoney has requested $993,000 for next year.
A county-created nonprofit corporation with a long name — the Onondaga County Convention Center War Memorial Complex Management Corp. — has managed the convention center since it opened in 1992 in downtown Syracuse. It also manages the nearby War Memorial arena and the two performing arts theaters inside the nearby Civic Center complex. The Oncenter management corporation’s contract with the county expires at the end of next year.
Alliance Bank Stadium, which was formerly called P&C Stadium, has been leased since its opening in 1996 to the owner of the Syracuse Chiefs, the Community Baseball Club of Central New York. The lease expires at the end of this year, and county officials say they intend to negotiate a new lease with the Chiefs that will last at least 10 years.
The Chiefs initially managed the stadium, too, but the county has done so since 2000. Millea said any buyer or manager of the stadium would have to agree to honor the lease with the Chiefs.
John Simone, general manager of the Chiefs, said the team plans to submit a proposal to manage the stadium.
“Obviously, we have the most experience and we are the most qualified,” Simone said.
County officials have expressed a desire to see Alliance Bank Stadium become a venue for concerts in hopes of boosting the stadium’s revenues. But county lawmakers have been reluctant to go into the concert business because it requires the expenditure of substantial sums of money up front for artist fees and other costs — with no guarantee that tickets sales will cover the costs.
Last year, the county Legislature rejected County Executive Joanie Mahoney’s request for $500,000 to hire a promoter and financially back concerts at the stadium. The county briefly hired Syracuse Jazz Fest Executive Director Frank Malfitano to arrange concerts at the stadium, but it had to discontinue the deal after the Legislature barred county funds for concert promotions.
The Chiefs and JAM Productions of Chicago teamed up in 2009 to sponsor the Bob Dylan/John Mellencamp/Willie Nelson concert that attracted 7,100 fans and a Dave Matthews Band concert that attracted 18,000 people. But no concerts have been held at the stadium since 2009, a source of frustration for county officials.
Millea said there is a trend toward having municipally owned arenas managed by large national venue management companies that double as concert promoters. They not only run the facilities, they also manage the concert tours of many big artists and, thus, may be able to bring in more concerts for those facilities, he said.
“They have contracts with the acts and they control where they go,” he said.
In New York, Albany County’s Times Union Center, Rochester’s Blue Cross Arena and the Nassau Coliseum on Long Island are managed by Philadelphia-based SMG World, one of the companies Onondaga County invited to submit a proposal..
Millea said the county may negotiate a management contract with one or more of the vendors that respond to its letter. But the county will not be obligated to do business with any of them, he said. Proposals must be submitted to the Purchasing Department by 4 p.m. Nov. 4.
Terri Toennies, Oncenter’s president and CEO, said it is likely that the Oncenter’s management corporation would be dissolved if they county hires a private company to manage the Oncenter instead of renewing its contract with the corporation.
However, it’s possible that the corporation’s employees could be hired by any new manager. The county’s request to vendors asks them to include in their proposals their “anticipated plans for the retention of current employees.” The Oncenter has 41 full-time employees and employs up to 500 part-time employees during the year to work during events.
Toennies said it’s far from certain that the county will find a private manager that could operate the facilities at a lower cost. She said an oversupply of convention space in the country makes it nearly impossible to break even on those facilities.
Gary Bongiovanni, editor of Pollstar, a magazine and web site that covers the national concert business, said private companies are freer in how they can negotiate contracts and are more motivated to fill the seats.
“They’re profit driven and so they are going to be a little bit more aggressive than a civil service employee,” Bongiovanni said.
Heywood Sanders, a professor of public administration at the University of Texas at San Antonio, said many local governments have turned to private companies to manage their convention centers and sports arenas, and such firms are “glad to be paid a fee.” But he said most find they still are stuck with high costs because the highly competitive nature of the convention and arena business means they cannot charge the rental rates needed to break even, let along turn a profit.
“There is remarkably little fairy dust to solve the problem because you’ve got to compete on price,” said Sanders, who has written extensively on costs of government-owned convention centers and arenas. “People are giving this stuff away.”
Contact Rick Moriarty at rmoriarty@syracuse.com or (315) 470-3148.
Who was invited?
Here’s the nine companies that Onondaga County invited to submit proposals to manage Alliance Bank Stadium and the Oncenter complex:
AEG: Operates the Staples Center in Los Angeles, public venues around the world
Community Baseball Club of CNY: Owns the Syracuse Chiefs
Delaware North Companies: Provides hospitality and food service at sports arenas, casinos and airports, including Syracuse Hancock Airport. Its owner also owns the NHL Boston Bruins and Boston’s TD Garden.
DSF Sports/DSF Group: Owns the minor league baseball New Hampshire Fisher Cats and Bowling Green Hot Rods.
Global Spectrum: Manages nearly 100 public assembly venues and its parent company owns the NHL’s Philadelphia Flyers and the NBA’s Philadelphia 76ers.
International Facilities Group: Manages sports arenas in California and Illinois.
SMG World: Manages eight stadiums, including the Louisiana Superdome, more than 60 arenas, and says it is the nation’s largest private operator of publicly-owned exhibition space.
VenuWorks: Calls itself one of the three largest “public assembly management” firms in the U.S., handling over 40 venues with more than 9,000 events.
Mandalay Entertainment: A TV and film company, owns the minor league baseball Dayton Dragons, which has 843 consecutive home sellouts.