Alerus Center’s Managment Company Doesn’t Want to Live With Contract They Signed
In other words Venuworks and the Alerus Commission want to gift them $175,000 of our money.
Under the existing contract, the firm would get its management fee in full if there were no losses at the city-owned events center. But if there were losses, the fee would be subtracted by the same amount as the loss.
In 2008, the Alerus Center reported that it made $15,000, but that does not include $499,000 in concert losses. VenuWorks was paid $175,000 in management fees for 2008.
The first thing I want to say is that I’d recommend that the lot of them, The Alerus Commission, Venuworks, and the Herald Reporter pick one lie and stick with it. Recently they’ve claimed that they only lost $499,000 in the concert fund. But back in February they were claiming much higher numbers. From Tu Uyen’s blog:
Concert fund losses
The fund started with $250,000 but ended with $469,017.67 in the hole. That’s $719,017.67 spent altogether. Michael W. Smith, Lifehouse, Disturbed and Neil Diamond all lost money.
The Alerus Center would like you to realize that the economic impact of all these concerts totaled $1.4 million.
Why bother with concerts?
These losses, Alerus Center Executive Director Steve Hyman said, should be expected because the concert fund is a “risk fund.” The expectation is that concerts are basically loss leaders. You lose money on them but you expect to make money on other things, such as advertising and suite leases.
The same day that the newspaper reported that loss the Alerus Commission ran an ad saying that they had in fact lost $125,000 in the general fund and $631,000 in the concert fund.
Guys if you’d stick to the truth you wouldn’t have to dance around so much making up whopper after whopper.
Speaking of that, they’ve changed their story about why the contract doesn’t really count. Last week it was because they had a double secret meeting nobody knew about where nothing was recorded and let Venuworks out of that part of the contract. That’s not working so they’re saying that losses in the concert fund have never counted:
VenuWorks said today the concert losses came out of a separate concert fund that the City Council approved. Losses in that fund, it said, do not count toward VenuWorks’ management fee as a matter of long standing practice.
“Long standing practice.” Are they morons or do they think we are? 2008 was the first year that they had a contract where Venuworks wouldn’t get their management fee if they didn’t make money. Not only that 2008 was the first year that the concert fund LOST money.
How in the world can it be long standing practice when in every way this is a new situation. Of course even we used to do it that way it wouldn’t overrule the words on the contract that we all have to live by.
Well that is unless the Alerus Commission gets their way. They have decided that Venuworks’s bottom line is far far more important than the finances of the city. That’s what happens when the commission is staffed by the mayors cronies rather than getting qualified people overseeing the community’s biggest asset.
This story came out of the Alerus Commission meeting that they announced 2 1/2 hours before it started. I wonder if anyone was able to make it. The City Finance committee had a meeting at 4pm which I haven’t heard anything on yet.
