The owners of the Rochester Americans have notified the city they want out of a contract to operate Blue Cross Arena at the Community War Memorial.
Mayor Malik Evans made the announcement Tuesday in a news release, explaining the city has issued a request for proposals to find a new operator for the 14,000-seat city-owned area.
The move affects only the arena operations, not the Amerks nor the Knighthawks, which share ownership. Talks continue. And despite the opt-out notice, officials on both sides remain open to continuing the arrangement as circumstances develop.
Rochester Arena, LLC (RA) signed on to run the arena back in October 2019. That 15-year deal was to run through June 30, 2033.
RA is affiliated with Buffalo Sabres and Bills owner Terry Pegula who last summer dissolved parent company Pegula Sports and Entertainment. At the time, a company spokesperson said the restructuring would "not affect the day-to-day operations here in Rochester,” and that the plan was to "continue to oversee operations of the arena and all the teams under the Pegula ownership will continue to operate as their own entities similarly to how they have been.”
The licensing agreement to operate the arena allowed RA to opt out if it provided the city with 180 days advance on either July 1, 2024, or July 1, 2028.
This past December, the city and RA signed a Memorandum of Understanding that did four things:
- Established a new opt-out option that could be effective April 30, 2025 if RA provided notice to the city by either Jan. 31, Feb. 29, or Mar. 31, 2024. Those dates would allow time to resolve "outstanding issues related to the arena complex" that make up the next three points.
- RA was to reimburse the city for utility costs up to $250,000. That was revised, in a measure City Council approved last month, to have the city to take on 40% of the bill. That takes effect July 1. Mayor Malik Evans wrote to City Council members at the time that there were ongoing discussions about "the next period of the agreement" and the need to address "increasing costs associated with operation of the arena." Had this revision not been adopted, RA could have opted out effective July 1 of this year.
- The city is responsible for structural components and repairs and there was an apparent need to replace the ice plant. The two sides planned to come to an agreement on the timeframe for that work. Failure to do so, the MOU stated, could result in RA choosing to opt out.
- The city was to upgrade lighting in the nearby Court Street parking lot no later than June 30.
RA provided written notice to the city last Thursday, March 28. It was not immediately clear what triggered the decision. Both sides describe an amicable relationship.
The ice plant replacement was a $400,000 project included in the city's 2023-24 capital improvement plan but not slated to be finished until 2025.
That timeframe remains uncertain, however. The project is a multi-phase effort starting with electrical and dehumidification upgrades, and replacement of a nearly 30-year-old cooling tower. That work could be put out for bid this spring with construction likely to be underway by early 2025. The refrigeration system comes next and will require further evaluation, design and cost estimates, city officials said.
RA issued the following statement Tuesday:
“We have made the decision to opt out of our license agreement with the City of Rochester for the operation and management of Blue Cross Arena. This opt out is specific to the operation and management of the arena and the Rochester Americans and Knighthawks remain committed to the city of Rochester. We look forward to continued conversations with the City of Rochester in the spirit of our great partnership through our teams as both parties do their due diligence throughout the RFP process for management of the arena.”
A spokesperson later confirmed there would be "no change in ownership or the affiliations," adding the teams "will be unaffected and will remain in Rochester."
And officials later added that they had "not closed the door on continuing to manage and operate the arena," and that talks continue. The decision to opt-out was cast more as a point-in-time decision as they assess operations, concluding it was best for both RA and the city to consider their options.
City Council President Miguel Meléndez was unclear what transpired, having last been briefed on the discussions several weeks ago.
"This was a risk, and at the end of the day there was concern about the city being on the hook for too many things," he said. Still, "Council members have approved the necessary items to keep this going, so I'm a little surprised to see this is where things are going."
Under terms of the December agreement, RA will continue operating the arena through April 30, 2025. The group was current on all rent and other payments owed the city, a city spokesperson said, and had invested nearly $1 million in the arena to date, as required by the contract.
The arena is slated to undergo a $7 million upgrade. Recent investments have been made updating the visiting locker room and concession. A planned riverside addition “would expand the concourse level concession area to an open, club seating concept to allow more access to the venue,” according to the city.
“The Blue Cross Arena is one of the jewels that keeps our city vibrant,” Evans said in a statement. “We continue to build tremendous momentum in redefining our center city as a place where people desire to live, work, and play, and the Blue Cross Arena at the War Memorial is central to that goal.”
The city is scheduling tours of the arena later this month for prospective new operators. Firms that are interested must submit their responses by May 17. The goal is to select a new management team by late August and have them in place by October — providing a six-month transition period.
In its request for proposals, the city is seeking a contract term of no more than five years, with optional renewals. The document also notes that, "it is the expectation of
the city that operating revenues will be sufficient to fund all expenditures for operations."