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Minutes Five Flags Civic Ct 1 17 05 FEB-17-2005 THU 03:46 PM DUBUQUE FIVE FLAGS eTR FAX NO, 563 589 4351 p, 02 Five Flags Commission Meeting - January 17. 2005 PRESENT: CYNTHIA FULLER, ROD BAKKE, MARK NAUMAN, MIKE BRANNON, BRYCE PARKS STAFF PRESENT: INlERIM GENERAL MANAGER LES CROOKS, JENNIFER UPTEGRAPH, TOM LORENZ OF PERSHING CENTER, LINCOLN, NE, GIL SPENCE PUBLIC: TED SCHERR OF THE THUNDERBIRDS, TELEGRAPH HERALD REPRESENTATIVE, JIM GOODMAN OF YOUTH HOCKEY, WORTH CHRISTIE OF THE ALL-AMERICAN PROFESSIONAL BASKETBALL LEAGUE The Commission meeting convened at 4:40 P.M. in the Majestic Room at Five Flags Center. Chairperson Cynthia Fuller presided. Approval of Minutes: Mike Brannon moved to approve the November 2004 Five Flags Commission Minutes. Seconded by Mark Nauman. Motion carried 5-0. Mark Nauman moved to approve the January 2005 Special Meeting Five Flags Commission Minutes. Seconded by Rod Bakke. Motion carried 5-0. Manager's Report: Manager Crooks will discuss new bookings, happenings In the building, and the flnanclals at the end of the meeting. Financial Report: New Business: Manager Crooks introduced Worth Christie from the All-American Professional Basketball League to the Commission. Mr. Christie explained that Dubuque is a good fit with the league demographically especially, from a travel standpoint. Regarding the city Itself, the population, expanded market area, solid blue collar community, all the demographics are there. Dubuque Is the smallest arena the league would be playing in. A strong advance of pre-sale tickets would need to be there, so there would be no dependence on walk up clients. ROD BAKKE: How will this affect the local HS/College programs? He checked with some of the local programs unofficially - and said that those organizations believe that people will choose the games they'd like to attend. Basketball is quite popular, and many in the organizations think bringing the Ail-American Professional Basketball League will enhance Basketball in DUbuque. As far as competition, they weren't concemed. WORTH CHRISTIE: One of the first things done when "moving" Into a community - the All-American Professional Basketball League makes contact with the high school, college coaches and go out of their way to integrate into the community. Expected to go out of their way, helping the local programs, etcetera. The program comes In for the long haul, the team Is expected to integrate Into the community, expected to work with Page 1 of 7 boys/girls clubs, high schools, sponsor clinics essentially at little or no charge. The players are expected to set a positive example in the community. ROD BAKKE: We are in the middle of a hot bed of basketball - Tri-State Area, southwest Wisconsin - Northeastern Illinois. If the basketball team comes here, we will more than likely get great support. WORTH CHRISTIE: The other markets are already booking High School tournaments and such for the communities they represent. Getting the kids interested, trickles down to the parents, friends, families etc. ROD BAKKE: The Five Flags Center just completed the Girl's Wendy's Classic - how was the turnout? MANAGER CROOKS: The turnout wasn't the best because of the weather, but the games were great, competitive. CYNTHIA FULLER: What are the ticket prices for the All-American Professional Basketball League? WORTH CHRISTIE: Prices are about $35 (courtside), $24, $18, $12 and $8. MIKE BRANNON: What is your basketball history? WORTH CHRISTIE: Got involved in 1973 with pro-sports, living in Sioux Falls, SD, did radio advertising. Had a daughter with medical problems, experimental surgeries were being done in Rochester and Houston-Houston seemed a better choice, the town is full of major league sports. The sports teams had a lot of empty seats, Worth Christie walked into Houston Rockets stadium and asked to buy seats, sell them and give them some of the profits. He developed a pretty good business with the Rockets, Astros, Oilers, and Aeros. In 1978 Worth got a call from Larry O'Brien who wanted Worth Christie to develop a league - put together the Mid West Pro Basketball League - 1979 had hired some coaches and was working on the General Managers. Jim Drucker from the CBA started selling franchises. Casper, WY building center - he went in developed a program, had no owners - philosophical differences with the owners broke down the program. The owners wanted 4 season tickets each. Casper was selling franchises to owners with no background in basketball. CYNTHIA FULLER: What sites as of now that are signed / going to sign with the league have ice? WORTH CHRISTIE: Page 2 of 7 Great Falls has ice Butte, MT has ice Billings MT, has ice Casper, WY no ice Pueblo no ice Wichita KS yes ice, but are not yet announced as an AAPBL Topeka ice Lincoln no ice Cedar rapids, no ice Mankato, MN has ice LaCrosse Poss. of putting ice in BRYCE PARKS: Is Dubuque looked at as a top tier or expansion site? WORTH CHRISTIE: Probably will not turn one down, Dubuque will be in the top if 11 teams sign, staying with these numbers for at least two years with or without ownership is the goal. CYNTHIA FULLER: What happens after two years? WORTH CHRISTIE: If it's not profitable, he won't sell. The AAPBL will look at moving the franchise to a different city. TOM LORENZ: There will be savings on back-to-back games - 31 games plus playoffs anywhere from 1-11 CYNTHIA FULLER: The cost associated to us for ice events $1,000 lost from youth hockey Thunderbirds ice time, Fossils. These teams will be displaced. MANAGER CROOKS: There is a cost associated to maintaining the ice that is not recouped in revenue at this point in time. MARK NAUMAN: Is on the Fossils, and wouldn't mind giving up the ice time necessary to bring in an event like this - provided the Five Flags Center will be financially successful. The commission's position is to protect the City, and view all avenues of possible income. What about a provision? Performance bond be put into place that way the facility is guaranteed and the City will get what is coming to them, giving the city an iron clad protection. TOM LORENZ: Two different options, CD Deposit, LOC Bond be put up. Ticket revenues are retained by the building. MARK NAUMAN: In talking to an insurance agent, the Performance Bond is really the only guarantee. Page 3 017 CYNTHIA FULLER: What happens if we ruin the relationships with the Thunderbirds and Youth Hockey association and this basketball venture doesn't work out? We will be displacing them. MARK NAUMAN: That is a possibility, but again, this is a risk that the FFC should consider as long as from a financial standpoint, the City is protected. It isn't the Commission's position to decide which events are the best to have in the center. BRYCE PARKS: Has anyone talked to the Youth Hockey? MIKE BRANNON: Received a call from their Vice President. CYNTHIA FULLER: The major concern is the fact that this building is a community center, and Dubuque Youth Hockey has always been a resident client, and now are in the position to be displaced for a considerable period of time over an outside interest coming in - which are not part of our community and are not tax payers. This is a taxpayers building. WORTH CHRISTIE: Won't have to pay taxes?! CYNTHIA FULLER: Not a property owner of Dubuque, therefore is not paying taxes to support the community. WORTH CHRISTIE: The AAPBL is in a position to accommodate 10, 11 or 12 teams. This organization doesn't want to enter into a community where they are not wanted or the people are apprehensive. The contracts for each facility are different. The Performance Bond can be added to the contract by the City. He is not in the business to put out the Hockey league in Dubuque. Tax dollars will be provided to the community - by the salaries paid to the full time staff, the part time staff being employed at the building. This process has already drug along. CYNTHIA FULLER: The commission did not drag their feet on this issue, it was only presented two weeks ago at the special meeting. TOM LORENZ: During the November meeting, Paula was instructed to present this opportunity then. Worth Christie had been here meeting with her, had toured the facility. The idea was this would be put off until the December Meeting. CYNTHIA FULLER: The first meeting this was actually discussed was the January special meeting. BRYCE PARKS: It's a great idea bringing new things to town. Marketing the organization - each will just have to work harder to do so. If there truly is no risk for 2 years, and the bond protection for the city - this will be worth it to the City of Dubuque MARK NAUMAN: Provided Bonding is given, this is a great opportunity, fixed rental fees of dates that are booked and spoken for will be protected. Page 4 of 7 CYNTHIA FULLER: Has a real issue with giving this two years, and if it doesn't work out, going back to the ice users and saying Sorry, we made a mistake, you can have your ice back. BRYCE PARKS: That is not a bad thing. The commission shouldn't be embarrassed because this basketball contract will potentially give Dubuquers more opportunities, it will be a win-win situation. We have the option to create new revenue for the city. If the community doesn't take advantage of it that isn't anyone's fault. CYNTHIA FULLER: There will be no opportunities to have other events if we fill these dates. The reason SMG was hired was to fill the slow summer months, to her understanding. The Five Flags Center doesn't need any other events during the months of Oct. - Apr. MANAGER CROOKS: Most shows booked are done during the week. CYNTHIA FULLER: This essentially will displace the resident clients even more. TOM LORENZ: SMG was hired to explore different avenues to subsidize costs to the City. Youth Hockey is currently not paying their full way. CYNTHIA FULLER: This issue is on both sides of the building, not just the ice. The Symphony and the Theater are not meeting their costs. It's not just Hockey. Putting the black mark on Hockey is the wrong thing to do. MANAGER CROOKS: Currently, all the resident clients are subsidized. How much money does the city want to put into underwriting Youth Hockey? How much do we subsidize them? The deficit is increasing and unless new events are brought in, it will continue to increase. CYNTHIA FULLER: The Theater is a larger deficit than the Arena. MANAGER CROOKS: The maintenance of the ice sheet and the utilities involved are far more than that of the Theater. BRYCE PARKS: The Commission has a responsibility also as community members not only for Youth Hockey, but there is a Historic Theater here, need to keep this as part of the community and keep it operating as smoothly as possible. TOM LORENZ: This is an excellent opportunity. The Five Flags Center is guaranteed 30 nights of rental into the building with NO risk. ROD BAKKE: What is the time line? Is this meeting the deciding factor to send this issue to the City Council? Will a decision need to me made tonight? MARK NAUMAN: Believes he is ready to make a decision tonight. Other events need to be considered. The Commission cannot turn something down just because they don't think it will be pliable, otherwise everything will be turned down. Page 5 of 7 CYNTHIA FULLER: The Commission's thought process was that SMG hired to fill summer months. BRYCE PARKS: SMG is bringing new events to our facility, new resident clients. MANAGER CROOKS: Wants to go on record - big supporter of the youth hockey program, has had two meetings with the youth hockey advisors and explained to them that this venture will have an impact on their ice time. The Five Flags Center wants to maximize the use of the building for all users, looking at other ways to help youth hockey maximize their time. This building values them as a client. WORTH CHRISTIE: There is no time line, decisions need to be made regarding the number of teams (10, 11, 12. ..) soon. The team will need a legitimate amount of time to establish a staff, find a GM, office space, Tickets will need to be printed, advertising done. Summer camps, clinics, etc. will need to be set up with the players. There is a possibility this could spill over into the Theater even. November 9th is the season start date and will run until approximately April 1st. CYNTHIA FULLER: How do you feel about supplying a Performance Bond / Letter of Credit? WORTH CHRISTIE: This option wouldn't be a problem. He has never supplied a Performance Bond, but has provided Letters of Credit and CDs. BRYCE PARKS: This will protect the money earned or spent from the building. MARK NAUMAN: This would work with a Letter of Credit / Performance Bond. What will happen if the commission votes yes? GIL SPENCE: There will be a City Council meeting, possibly a special meeting, to discuss this issue. MARK NAUMAN moved that the Commission authorize Manager Crooks to enter into negotiations with the All-American Professional Basketball League subject to having a performance bond to protect the base rental rate for dates booked for one season. Rod Bakke seconded the motion. Motion passed 4-1 vote with Chairperson Fuller providing the dissenting vote. Moving on, Manager Crooks went over new bookings with the Commission. Montgomery Gentry / Trace Adkins concert in the works. He will keep them updated. Regarding NovemberlDecember financials, until a comfort level has been reached, he is going to withhold the breakdowns until he has more time to review. The accounting system has been changed, and as far as reports in revenue, in the past the gross amount has always been provided. He would like to provide the net incomes from the events. Page 6 of 7 In the future, this information will also be sent out well in advance. In November, we had several great events: Thunderbird games, Sesame Street, Jim McDonough, the Symphony. The Five Flags Center purchased new harnesses for the theater. SMG has completed the change over. Currently there are three positions open: Concessions Manager Box Office Manager Permanent General Manager John Snider has decided not to transition with SMG, but has agreed to stay on to help train a new Concessions manager. With no further business to discuss, Mike Brannon moved to adjourn, Bryce Parks seconded. Motion carried 5-0. Meeting adjourned at 6:20 p.m. Respectfully submitted, Cynthia Fuller, Chairperson Page 7 of 7