PORTLAND — The owner of the Portland Pirates noted one major difference in his recent lease negotiations with the Cumberland County Civic Center and the Times Union Center in Albany, N.Y.
Brian Petrovek said his talks with Bob Belber, the general manager of the Albany arena, moved along quickly because he was dealing with the decision-maker for that venue.
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“I had one-on-one conversations with Bob Belber,” said Petrovek, managing owner and CEO of the American Hockey League team. “In Portland, I was dealing with a committee” representing the civic center.
Petrovek eventually decided to extend his lease in Portland, despite Albany’s efforts to attract the team to fill the void left by the impending departure of another AHL team from the Times Union Center. But Petrovek said the talks in Portland probably took longer than they needed to because they involved getting a nine-member board of volunteer trustees to agree to the deal.
“I had every reason to believe that if Bob and I had hammered out a deal, it was done. I was negotiating with the chief executive,” said Petrovek, while in Portland, the lease was negotiated by the chair of the board of trustees and required the approval of the board.
The civic center is unusual for publicly owned arenas, particularly in New England: It is managed by county employees, not by an outside management firm. That means that some of the work, including major lease deals, is shifted to the trustees, who are appointed by county commissioners.
Neal Pratt, the chairman of the trustees, said the idea of hiring an outside management firm for the civic center has come up from time to time – Petrovek has even proposed that the Pirates, the arena’s lead tenant, run the center – but it has been rejected. It’s not even clear, Pratt added, if the trustees could legally turn over the reins to a management company.
When the state established the Cumberland County Recreational District to facilitate the design, construction and oversight of the civic center, it called for the appointment of trustees to make sure that the arena fulfilled its role as a community structure, Pratt said.
The civic center does that through offering the arena at low cost for events such as high school and college graduation ceremonies and high school basketball and hockey tournaments, he said.
Other communities, however, manage to maintain those uses even when they turn over the job of running the arena to a private, for-profit company.
Samantha Piatt, spokeswoman for the city of Manchester, N.H., said the city uses its Verizon Wireless Arena for high school graduations and also reaps a share of the profit from the arena, which is run by SMG, a company based in Pennsylvania.
The same is true in Worcester, Mass., where the DCU Arena is also run by SMG.
Michael O’Brien, Worcester’s city manager, said SMG has run the arena since it was built more than 25 years ago.
He said the management contract sets aside a certain number of days for free community use, and Worcester also gets 60 percent of the profits from revenue-generating events.
“When they do well, we do well,” O’Brien said of SMG.
Most communities mandate a certain amount of civic use of an arena, said Bob Cavalieri, senior vice president for business development for SMG.
Cavalieri said SMG’s management contract typically calls for a flat annual fee, usually between $100,000 and $200,000. The contract then sets out an additional amount to be earned on an incentive basis.
Often, 25 percent of the incentive will include qualitative goals, such as customer service, community involvement and cleanliness. The rest, he said, is usually based on meeting certain financial benchmarks.
If a community wants to use a break-even figure as its financial goal and put greater emphasis on community use of an arena, that can usually be worked out, he said.
“Who sets the goals and objectives for that building? We don’t. The client does,” Cavalieri said. “Most of the facilities we run are publicly owned, and the first tenet of our management creed is: ‘Remember who owns the facility.’ “
Cavalieri noted that a small-market arena might host only 12 concerts a year. Even if it has a professional sports team, such as a hockey team, based at the arena, that still leaves plenty of dates for other events.
And SMG, he said, can beef up a facility’s use and thus its revenue.
SMG manages 75 arenas around the country, including those in Providence, R.I.; Lowell and Worcester in Massachusetts; and Manchester. Cavalieri said SMG’s size gives the arenas managed by the company the inside track on attracting top-shelf entertainers to its facilities and filling up some of those empty dates.
“The facility (managed by SMG) is no longer an island,” because of the company’s centralized booking, he said. “It’s indelibly attached to 75 other facilities throughout the United States.”
Pratt said he often hears complaints that the civic center doesn’t have a lot of popular concerts, but he said that’s because of the state of the concert industry, which has been hit hard by the economy and by the proliferation of ways that bands can promote albums without going out on tour.
“The concert industry is in a crisis nationally,” he said. “People ought to be proud of what this civic center has done and the national acts it continues to get.”
As an example, Pratt noted that the “American Idol” tour plays only 50 sites, and one is the civic center. It’s the smallest arena on the “American Idol” tour, he said.
Pratt said the civic center could probably do better if it’s renovated in a few years.
A preliminary plan, with a cost pegged at $41 million, would add seats, improve the loading bay to accommodate more extensive sets used by entertainers and add “party suites” that would be used at sporting events.
That would make the civic center even more attractive to touring artists, he said, and more profitable for sports teams, like the Pirates, that play in the arena.
Pratt said the civic center might revisit the idea of hiring a management firm when it embarks on the renovation, which will require voter approval for a bond to pay for the work. A referendum vote is tentatively set for November 2011.
But Pratt admitted that he has a philosophical bias against a for-profit firm running a nonprofit, taxpayer-bought facility such as the civic center.
Under a private management firm, arenas “tend to be more bottom-line driven, and it’s run more like a private business than a public entity,” Pratt said.
“Some of the things that we do, you wouldn’t consider ‘profitable,’ but they benefit the community.”
Staff Writer Edward D. Murphy can be contacted at 791-6465 or at:
emurphy@pressherald.com
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