RIO RANCHO – The saga of the Santa Ana Star Center is the lead example in a new study that looks at how small cities are wooed into building high-dollar arena projects with promises of jobs and economic development – projects that have cost them dearly.
University of Florida professors Timothy Kellison and Brian Mills gave their presentation on the study at the Sports Marketing Association conference in Albuquerque last week.
“In retrospect, the subsidization of the Rio Rancho arena may not have been in the city’s best interests,” according to an abstract of the presentation.
Kellison and Mills are assistant professors in the Department of Tourism, Recreation and Sport Management at the University of Florida in Gainesville.
Kellison said in an interview that they chose the Star Center because Rio Rancho is near the conference location.
They based their presentation on research from books, academic papers and articles, though not the Star Center general manager or the city staffer responsible for the facility.
The presentation was called “Generating Public Support for Multipurpose Facilities in Minor-League Markets: Revisiting the Rio Rancho Arena Development.”
It outlines how Tempe-based Global Entertainment sold officials in Rio Rancho and nine other cities, including Youngstown, Ohio; Hidalgo, Texas; and Wenatchee, Wash., on publicly financing arenas with the lure of job creation and economic development.
They drew, in part, on Journal articles from 2004 to 2013 that revealed how the rosy predictions turned sour with a string of canceled concerts and anchor tenants like the New Mexico Scorpions hockey team pulling out.
Journal stories reported that city officials approved issuing $36 million in revenue bonds toward the $47 million cost of the 6,500-seat Star Center, with Sandoval County chipping in $8 million and the rest of the money coming from the city’s general fund and interest on the bond money.
Global told city officials that the facility would be profitable enough to repay the bond debt. Instead, it has steadily lost money and become a multimillion-dollar burden for the city.
Despite firing Global Entertainment and replacing it in 2009 with Global Spectrum, a Comcast subsidiary, the city had to allocate $3.7 million, or 7 percent of its entire budget, in fiscal year 2012 to cover arena debt and operational costs.
Rio Rancho Convention and Visitors Bureau Director Matt Geisel said Kellison and Mills never contacted him or Star Center General Manager Gunnar Fox for input on the presentation.
“Since the transition from the previous management company (Global Entertainment), we have tried to be very transparent with the public about the Star Center’s performance,” Geisel said.
In budget discussions this year, Geisel characterized the Star Center as a “quality of life” amenity.
The University of New Mexico co-hosted the Sports Marketing Association conference that took place last Tuesday through Saturday at the Hyatt Regency Downtown. About 260 attendees from throughout the U.S., Europe and Asia were registered for the event.