Minutes Five Flags Civic C 1 5 05
Five Flags Commission Meeting
January 5, 2005
PRESENT: ROD BAKKE, CYNTHIA FUllER, MARK NAUMAN, MIKE BRANNON, AND
BRYCE PARKS
STAFF PRESENT: lES CROOKS, JOE ROMANO-REGIONAL VICE-PRESIDENT, TOM
LORENZ-GENERAL MANAGER PERSHING CENTER, LINCOLN
NE, GIL SPENCE AND JENNIFER UPTEGRAPH
PUBLIC PRESENT: TED SCHERR FROM THUNDERBIRDS, TELEGRAPH HERALD
REPRESENTATIVE
The Commission meeting convened at 4:30PM in the Majestic Room at Five Flags Center.
Chairperson Cynthia Fuller presided.
Approval of Minutes: November 2004 minutes tabled until January 17, 2005 meeting.
New Business: Interim General Manager Les Crooks was introduced to the commission. He
has 15 years in the business, Five with SMG. He started as a marketing manager in an SMG
facility in Baton Rouge, LA.
Joe Romano thanked the commission for attending the special meeting. He explained that their
search for a GM is underway. All full time and part time employees (with the exception of the
two collective bargaining unit employees) have been transitioned. John Snider has decided not
to transition over, but will stay on board in a temporary capacity. The slots we are currently
looking for are General Manager, Concession Manager, Box Office/Accounting assistant person
to round out the full time staff.
The commission introduced themselves and the length they have been on the commission.
Mark Nauman, Rod Bakke, Cindy Fuller, Bryce Parks and Mike Brannon.
Chairperson Fuller questioned exactly who would the GM be answering to - city or SMG and
would the city be involved with the events coming into the center. Joe Romano explained how
the management will work, and that the GM serves both of the organizations-the client and
SMG.
Joe Romano responded to Rod Bakke's comment about Paula choosing not to transition, and
Joe stated Paula has been in contact with the press, and without quoting her, has explained her
decision. SMG/Five Flags wishes her the best of luck and thanks her for her service.
Chairperson Fuller opened discussion on the Basketball league. Manager Crooks handed out
booklets outlining the basketball proposal. Joe gave an overview/introduction. SMG has had
an inquiry from Worth Christie out of Cheyenne, Wyoming. He is putting together a basketball
league the All-American Professional Basketball league. We have run some preliminary
numbers. This could be a potential resident client for the Center. The league is in an expansion
phase right now. We can immediately enter into contracts such as these but it needs to be
brought before the commission. SMG believes this could present an opportunity for the
building. Floor moves to Tom Lorenz to discuss the dealing with Worth Christie and the AII-
American Professional Basketball league.
Worth Christie has an extensive basketball past. He was involved initially in starting up the eBl
years ago. Mr. Christie will own all of the teams. That is the key issue, the idea is not to drive
the franchisers and make money right away. He will work with people that potentially will want
to own teams in the future. As of now, he wants to keep control of the league, so there is a
consistent league, approach. Five Flags/Dubuque is an attractive area, in the middle of a
basketball savvy area. Right in the middle of a triangle of Division 1 teams, UW, Hawkeyes,
Iowa State. People here are interested in the game. At this level, they will be drawn to the
league.
8-10 teams in the league may go to 11 or 12. He won't want to go above that so he can retain
the ownership.
Most of the capitol will be there from him. He has leveled out the costs; one of the main
concerns was controlling the travel costs. By keeping teams in the league within driving
distances, it will keep the travel cost down considerably.
The potential benefits we see at Five Flags are the floor, the bleachers-we have the resources.
The potential home dates are 28. The season runs November through the spring with playoff
games - could possible be 32-35 games by the time the playoffs are finished.
We estimated the cost of a conversion from ice to basketball floor and back. The estimated cost
is $5.500.00 per conversion. This should be a positive cash flow for us right from the beginning.
The existing resident clients will always have first choice on the dates.
Joe Romano stressed that this is not a joint proposal. The city, facility, and SMG are not taking
a risk. The financials presented are the standard format from SMG based upon their best
estimates for expenses and potential revenue from promising patrons. Ultimately through
contract they will require a letter of credit, to make sure the building is not out of pocket for one
year's expenses.
If games are done during the week, there would only be one turnover for possibly 2 games, so
that will cut down on the cost. You will keep the part time employees busier with the
conversions. More working as ushers, we will get ticketing revenue, all of concession income.
Mr. Christie would like to own the teams for at least a couple years before possibly selling them
off. He would like to see potential owners with backgrounds in the situation.
There will be season tickets available; advertising would be a pay as you go situation. There is
a performance guarantee on the team's end. This would be an opportunity to consider. The
was briefly touched at the last commission meeting - this is a broader view of what will need to
be considered for this type of event.
Chairperson Fuller questioned the period as far as signing a contract and receiving a deposit as
there are other events that can be booked between the periods. The timing has to be months
out, it isn't possible to put this together a few months before the season.
Lincoln, Cedar Rapids, Great Falls-MT, Wichita, and Topeka have all signed contracts with this
league.
Typically we will negotiate a long-term lease with an organization such as this ( 2-3 years) in
which it would call for them to have their schedules early to the facility. As we chase concert
activity and/or larger attraction activity for the arena, we take into consideration all of the
aspects. Most all events coming in want Friday/Saturdays-aren't enough of those to go around.
There will be a trade off, what is it worth to FF to have a resident client guaranteeing these
events? The letter of credit should carry the center for the year so if the league folds, we are
covered.
Chairperson Fuller brought to the attention of the commission and employees present that FFC
have been spiffed by a letter of credit before - with Brian Gallagher with the Dubuque Fighting
Saints.
Rod Bakke is concerned for the welfare of the local basketball programs, i.e. high school,
college. He suggested contacting the colleges/high school basketball programs, the public,
show them what the deal consists of and get their opinionlinput. The basketball public goes to
their games now, we don't want to impinge on their programs. Keep in mind this is how
Dubuque is.
Joe Romano reminded the commission this is NOT a done deal, this is just an idea brought forth
as a way to bring additional revenue to the center.
All of the centers that are signed on with the exception of Lincoln do have ice.
Rod Bakke asked for comments from Ted Scherr regarding this proposal. Ted is concerned
with the availability of advertising dollars. The T Birds struggle every year with collecting
advertising dollars for their season. If the $$ isn't there, the Jr. program won't be there, that will
trickle down, the youth program won't be here. This is really running a fine line. He sees no
problem with the scheduling, it's just the revenue coming into and being taken away from each
program for advertising.
Tom Lorenz gave details on the Lincoln, NE teams, hockey, basketball, baseball, that are all
going off of advertising dollars from the city and not at the expense of the other teams. Some of
the other advertisers have been able to step up and do more at this point. Exposure for each
advertiser is what is important.
Income based on concessions are going on per capita of $3 per head. That is aiming low,
probably more likely to see more of a 50% return on that. All income from the concessions is
FFC profit.
We have a potential net profit of $88,436.00.
Competing teams would come from the league -the 10 teams in the league.
Mr. Christie is looking at 1st and 2"" round cuts from the NBA and kids who probably are great
basketball players but cannot meet the academic standards of college. We will be seeing some
of these players potentially move up into the NBA.
He was a president with the CBA/CBL before it was sold and splint up.
Rod Bakke suggested having Worth Christie or a representative from his organization to come
and speak with the commission on the January 17'h commission meeting.
Joe explained that SMG was brought in to make money for the FFC - under the contractual
mandate by the City. This will be done by bringing in new Revenue - new programming, new
fee schedules.
What we need is the feedback from the commission on whether or not to take this to the next
step as far as entering into negotiations with the All-American Professional Basketball League.
.
It is not SMG's intent to do anything in the community that will be detrimental to other programs.
The management contract. directives by the client, the charter, compels them to do whatever is
in the best interest of managing the building and moving it forward.
Any recommendation by the commission regarding this contract (basketball) will need to go
before the City Council.
Mark Nauman suggested this type of activity would bring different types of people to the building
and expand the services to the city - assuming the league is successful.
There are cross-promotional opportunities here with the possible All-American Professional
Basketball League and HS/College teams.
Rod Bakke again reiterated having Worth Christie or a rep attend the next Commission meeting.
Rod Bakke motioned the following go on record: In recognition of Paula Wolfe Lammer's 3.5
years of dedication and service to the Five Flags Center and considering her contribution to the
advancement of the Center and to commend Paula for her service as manager and wish her the
best of success in the future. Seconded by Mike Brannon. Motion carried.
Old Business: Chairperson Fuller mentioned about the reception pians for the building. GiI
Spence said it would be 4-8 weeks before the drawings for the renovation are done. This
discussion can continue at the January 17 commission meeting.
With no further business to discuss, Mike Brannon moved to adjourn, Bryce Parks seconded.
Motion carried. Meeting adjourned at 5:45p.m.
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Cynth I uller, Chairperson