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Tuesday, June 23, 2009
Rio Rancho to Global: Settle Debts
By Rosalie Rayburn
Journal Staff Writer
Rio Rancho says the clock is still ticking for Global Entertainment to meet a city deadline to settle debts associated with the financially troubled Santa Ana Star Center.
Rio Rancho City Manager James Jimenez gave Global Entertainment President Rick Kozuback 30 days to respond to a June 12 letter seeking payment of $367,608. That figure includes about $81,000 for repairs at the center, $75,000 for surcharge fees due the city on items sold at the 6,500-seat events center and $292,000 for outstanding debts.
Rio Rancho signed a 10-year contract with Global Entertainment in 2004 to manage the Star Center. At the time, Global predicted profits from Star Center events would cover payments on $36 million worth of bonds the city sold to build the arena. But the center lost money, prompting the city to notify Global in December that its contract would be terminated March 31.
Instead, Global Entertainment pulled out of the Star Center in early February and the city took over management, leaving the thorny issue of debts unresolved.
Kozuback had a meeting with city staff in early May. He said last week that he left the meeting believing he was on the way to a mutually acceptable solution.
"With this letter, it's clear that we didn't make progress on a compromise," Kozuback said in a phone interview from his office in Tempe, Ariz.
Global Entertainment's position, reiterated in letters sent to Jimenez in December and January, is that actions the city took stifled revenue flow to the center, hampering Global's ability to cover operating costs, including money owed to vendors.
The letters said:
n The city "unilaterally" granted a rent reduction to the New Mexico Scorpions hockey team, the Star Center's primary tenant, from $6,800 per game to $1 per game.
n City staff directed Global not to book acts after April 1 and told sponsors and suite holders not to worry about Star Center bills.
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