New arena plan poses $60 million question

New arena plan poses $60 million question If developers build it, will the public come? By Richard Wronski Tribune staff reporter Published March 13, 2005 If developers get their way, they will break ground this spring on the Chicago area's most state-of-the-art indoor sporting venue, the 11,000-seat Sears Centre. But if they build it, will the ticket buyers come? That's the $60 million question confronting officials in Hoffman Estates as they prepare to approve what would be a competitor to Chicago's United Center, Rosemont's Allstate Arena and the UIC Pavilion in Chicago. At issue is whether fans of lacrosse and hockey can drive attendance, as an arena study suggests, and keep the new stadium from going in the hole. Months of debate about the controversial project will culminate Monday as Village Board members meet to approve the findings of the $80,000 feasibility study they commissioned. The Sears Centre is the project that will "put Hoffman Estates on the map," said William McLeod, mayor of the town that has long struggled with Schaumburg and other surrounding communities for status. "This would certainly raise our profile," McLeod said. "This would be another feather in our cap." Plans for the facility were first unveiled in November by the village and the developers, Minneapolis-based Ryan Companies US Inc. and Sears Roebuck and Co. The arena would be in the sprawling Prairie Stone business park that houses the merchandising giant's headquarters, just off the Northwest Tollway and west of Illinois Highway 59. Although Hoffman Estates would provide the financing for the Sears Centre with $50 million in general obligation bonds, it won't own the arena. Ryan and Sears would put up $10 million and own the facility. Critics are concerned that the village would be left with the debt if audiences don't show for the promised concerts, ice shows and minor-league sporting events like hockey and lacrosse. "I don't know how many there are, but I know there are people out there who like lacrosse," McLeod said. "Soccer was looked upon as a strange sport 30 years ago. Now soccer's huge." Developers are betting that as many as 9,000 lacrosse fans will be willing to shell out an average of $18 a ticket to watch eight games a year. But critics are skeptical. "We haven't found 10 people who watch or play lacrosse," said Myron Siegel, an attorney for Michael Rossiaky, a resident who opposes the project. The National Lacrosse League has professional teams in 10 markets. The Colorado Mammoth, the league's Denver franchise, drew an average of 17,618 fans in 2003-04, while the Anaheim Storm, located in the largest market for the league with 13 million people, attracted only 4,750 spectators. Developers also believe the Sears Centre's mainstay tenant, a United Hockey League franchise, will attract an average of 5,000 fans for a 40-game home schedule. Some UHL teams have drawn well, like the Ft. Wayne, Ind., Komets, which averaged 7,777 fans last year. But Detroit's Motor City Mechanics attracted only 1,535 fans to a March 4 game. The Mechanics took the ice with several locked-out National Hockey League players from the Detroit Red Wings, including former Blackhawks star Chris Chelios. The Chicago area's other minor league hockey team, the Wolves, has been drawing from 4,000 to 15,000 fans per game this year at the Allstate Arena, just down Interstate Highway 90 from Hoffman Estates. The feasibility study, by Plano, Texas-based Conventions, Sports & Leisure International, known as CSL, estimates that the Sears Centre would generate $38.2 million a year in new direct spending and $1.4 million in annual tax revenues, and create 1,330 full- and part-time jobs. "Market feasibility is what we do, and we've done many, many studies like this. The methodology used is a widely accepted practice that has been successfully used in numerous other studies," Jay Lenhardt of CSL said at a recent hearing on the arena study. The company estimates that the center would host 135 events a year, including 48 hockey and lacrosse games. The other 87 events would be concerts, "family shows," ice shows and other entertainment. The study makes assumptions about attendance and revenue that have troubled critics of the Sears Centre. Some have charged that the arena would be a freebie for developers, since the general obligation bonds put the full faith and credit of Hoffman Estates behind the project. Bonds that pay the mortgage from arena revenue would be a better idea, some suggest. "It looks like a big fleecing," Siegel said. "We feel that the project is too risky for the village to issue general obligation bonds. If it is such a good deal, then the developers should get revenue bonds or conventional financing." The feasibility study said the Sears Centre would successfully compete against the larger Allstate Arena and the United Center because of the demographics of the Chicago-area market and the arena's state-of-the art amenities, including 42 luxury suites, four party suites and 1,000 club seats. Lesser competition would come from the UIC Pavilion, Northern Illinois University's Convocation Center in DeKalb and the outdoor Tweeter Center in Tinley Park. CSL also said the Sears Centre would hope to tap the "middle concert" market of 3,000 to 10,000 spectators a show that isn't being served by dominant promoters such as JAM and Clear Channel Entertainment. Steve Hyman, a veteran arena manager hired by the Ryan-Sears partnership to operate and book the new venue, said he has been assured by JAM, Clear Channel and another promoter, AEG Live, that there will be plenty of music for the Sears Centre. "We expect to do a nice piece of concert business," said Hyman, who ran the Mark of the Quad Cities in Moline, a similar-sized venue. Being able to fill the Sears Centre for 135 events a year is an "extremely conservative" estimate, he said. "We're building the right-size building in the right place, making it amenable and accessible ... affordable and fun.">