RINK MANAGEMENT GIVES ITS SIDE OF ICE PAVILION PROPOSAL

Niagara Falls Reporter

RINK MANAGEMENT GIVES ITS SIDE OF ICE PAVILION PROPOSAL By Frank Parlato
For the last 42 years, the city has owned, and taxpayers have subsidized, two regulation-size hockey rinks in Hyde Park, generally rented by the hour by local and out-of-town hockey players for leagues, tournaments, and pick up games. The Ice Pavilion is normally open from August to April. According to an analysis by the Niagara Falls Reporter, based on income and expense figures provided by the city controller’s office under FOIL requests, the Ice Pavilion cost taxpayers $2.1 million, or an average of $175,000 per year, not counting more than $5 million spent by taxpayers in capital improvements to the facility since 2009. After our story last week on the topic, Carl Sasyn, regional manager for Rink Management Services Corporation (RMSC) of Mechanicsburg, Va., a company named as one of the bidders, called to clarify his company’s position. RMSC is one of four firms proposing to operate the Ice Pavilion and the only one not offering to pay rent. They propose the city pay them to manage the facility and permit the city to keep all revenue generated after expenses. “I believe there is potentially more revenue there,” he said, “possibly enough to take the city out of subsidizing (the rinks.)” RMSC, he said, has 20 years experience, 1,800 employees nationwide, and manages six municipal rinks and 18 venues for private corporations, REITS, and foundations. Mr. Sasyn, who lives in Houston, grew up near Love Canal and played hockey at the Ice Pavilion as a boy. Three other operators have also bid. Two have been identified as Gene Carella, a long-time ice hockey tournament organizer and biology professor at NCCC, and Anthony Attardo, who has leased the facility for the last nine years. His lease expires at the end of July. Both Mr. Carella and Mr. Attrado have proposals to pay rent and utilities, a package that would guarantee the city more than $200,000 per year. The Reporter, in consultation with sources familiar with the ice rental business, estimate gross income in rink rentals at $300,000 annually. Mr. Sasyn would not disclose the amount of management fees his company would charge the city. The most intriguing element of the management proposal is that, if RMMS gets the contract, they can be evicted with 30-days notice. “The only way to grow your company is by performance,” Mr. Sasyn said, acknowledging he was satisfied to operate the facility based on mutual satisfaction. The potential advantage of their proposal is the city might not have to subsidize the rink and might even make a profit. In Wichita, according to an article in the Wichita Eagle published in 2007, RMSC took over management of the city’s rink in 2006 and it went from taxpayer subsidized to a $100,000 profit in one year. The disadvantage is, if rentals go down and expenses go up, RMSC still makes its management fee, their employees still get paid, and taxpayers subsidize the difference. The choice of operators requires consensus between the Mayor who selects the company and the council who approves the contract. In the present lease with Mr. Attardo, it was apparent the city had contemplated selling the Ice Pavilion, prooviding a 30 day eviction clause it they sold the rinks. The need for a declining city to be in the hockey rink business in order that some people can play hockey at other people’s expense, should be perhaps reintorudced to the debate. If it is true, as Mr. Sasyn says, that the business of renting ice rinks in NIagara Falls can be profitable, why not let the private sector handle it? If guarenteed public access is desired, a new buyer could be required to keep the Ice Pavilion open to the public as part of the city’s conditions of sale and reflect it in the price. Government is ill-equipped to operate any businesses. -------------------------------------------------------------------------------- TENANT WHO PAYS RENT: Tenant pays est. $60,000. Pays $144,000 for utilities. Pays qll operational expenses, general maintenance, and labor. Estimated subsidy by taxpayers: $50,000, not counting major maintenance and capital improvements. WHERE CITY PAYS RMSC City keeps all rentals. Est. $300,000. Could be more or less. City pays (Estimated by RMSC at 30 percent) labor to operate the rinks: $90,000 City pays $144,000 for utilities. Pays operational expenses est. at $40,000 Pays general repairs and upkeep; est. $50,000. Pays management fee to RMSC (estimated $50,000). Total costs: $350,000 Estimated subsidy by taxpayers: $50,000, not counting capital improvements.

By Frank Parlato

For the last 42 years, the city has owned, and taxpayers have subsidized, two regulation-size hockey rinks in Hyde Park, generally rented by the hour by local and out-of-town hockey players for leagues, tournaments, and pick up games. The Ice Pavilion is normally open from August to April.

According to an analysis by the Niagara Falls Reporter, based on income and expense figures provided by the city controller’s office under FOIL requests, the Ice Pavilion cost taxpayers $2.1 million, or an average of $175,000 per year, not counting more than $5 million spent by taxpayers in capital improvements to the facility since 2009.

After our story last week on the topic, Carl Sasyn, regional manager for Rink Management Services Corporation (RMSC) of Mechanicsburg, Va., a company named as one of the bidders, called to clarify his company’s position. RMSC is one of four firms proposing to operate the Ice Pavilion and the only one not offering to pay rent. They propose the city pay them to manage the facility and permit the city to keep all revenue generated after expenses.

“I believe there is potentially more revenue there,” he said, “possibly enough to take the city out of subsidizing (the rinks.)”
RMSC, he said, has 20 years experience, 1,800 employees nationwide, and manages six municipal rinks and 18 venues for private corporations, REITS, and foundations.

Mr. Sasyn, who lives in Houston, grew up near Love Canal and played hockey at the Ice Pavilion as a boy.

Three other operators have also bid. Two have been identified as Gene Carella, a long-time ice hockey tournament organizer and biology professor at NCCC, and Anthony Attardo, who has leased the facility for the last nine years. His lease expires at the end of July. Both Mr. Carella and Mr. Attrado have proposals to pay rent and utilities, a package that would guarantee the city more than $200,000 per year. The Reporter, in consultation with sources familiar with the ice rental business, estimate gross income in rink rentals at $300,000 annually.

Mr. Sasyn would not disclose the amount of management fees his company would charge the city.
The most intriguing element of the management proposal is that, if RMMS gets the contract, they can be evicted with 30-days notice.

“The only way to grow your company is by performance,” Mr. Sasyn said, acknowledging he was satisfied to operate the facility based on mutual satisfaction.

The potential advantage of their proposal is the city might not have to subsidize the rink and might even make a profit. In Wichita, according to an article in the Wichita Eagle published in 2007, RMSC took over management of the city’s rink in 2006 and it went from taxpayer subsidized to a $100,000 profit in one year.

The disadvantage is, if rentals go down and expenses go up, RMSC still makes its management fee, their employees still get paid, and taxpayers subsidize the difference.

The choice of operators requires consensus between the Mayor who selects the company and the council who approves the contract.

In the present lease with Mr. Attardo, it was apparent the city had contemplated selling the Ice Pavilion, prooviding a 30 day eviction clause it they sold the rinks. The need for a declining city to be in the hockey rink business in order that some people can play hockey at other people’s expense, should be perhaps reintorudced to the debate.

If it is true, as Mr. Sasyn says, that the business of renting ice rinks in NIagara Falls can be profitable, why not let the private sector handle it?

If guarenteed public access is desired, a new buyer could be required to keep the Ice Pavilion open to the public as part of the city’s conditions of sale and reflect it in the price.

Government is ill-equipped to operate any businesses.

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TENANT WHO PAYS RENT:

Tenant pays est. $60,000.

Pays $144,000 for utilities.

Pays qll operational expenses, general maintenance, and labor.

Estimated subsidy by taxpayers: $50,000, not counting major maintenance and capital improvements.

WHERE CITY PAYS RMSC

City keeps all rentals. Est. $300,000. Could be more or less.

City pays (Estimated by RMSC at 30 percent) labor to operate the rinks: $90,000

City pays $144,000 for utilities.

Pays operational expenses est. at $40,000

Pays general repairs and upkeep; est. $50,000.

Pays management fee to RMSC (estimated $50,000).

Total costs: $350,000

Estimated subsidy by taxpayers: $50,000, not counting capital improvements.

Niagara Falls Reporter www.niagarafallsreporter.com June 26 , 2012