WXXI AM News

Rochester reaches long-term management agreement for the Blue Cross Arena

Nov 29, 2018

Credit Alex Crichton

Rochester has reached a long-term agreement with an affiliate of Pegula Sports & Entertainment to manage the Blue Cross Arena.

Mayor Lovely Warren made that announcement Thursday, saying that the agreement will put the arena in the hands of a proven management company while significantly reducing the city’s expense to maintain it.

The Pegulas own the Bills and the Sabres, and also the Rochester Amerks.  They will also own a new franchise for lacrosse, keeping the Rochester Knighthawks name next year.

Rochester budget director Chris Wagner says having that commitment with anchor tenants in the arena should bode well for the future.

He says under the new, 15-year deal, the Pegula affiliate, to be called Rochester Arena LLC, (RA) will pay the city $60,000 a year to operate all aspects of the arena. That company will pay all operating expenses at the arena, and Wagner says that will help taxpayers.

“Last year was a very difficult year and our subsidy was close to $2 million. It will be significantly less than that going forward; I think there likely always be some form of subsidy by the city, but this agreement significantly reduces that,” Wagner told WXXI News.

As part of the proposed agreement, the Arena management company will retain revenue generated from operating the arena.

The city will keep responsibility for the structure, and over the course of the agreement, the management company and the city will contribute $3 million each for capital improvements. That’s on top of more than $18 million that officials earlier announced would be used for major renovations at the arena.

In addition, as part of the agreement, the arena management company will also manage the Court Street parking lot and pay the city $100,000 annually to manage the lot.

As part of this new deal, the user fee on any ticket purchased at the Blue Cross Arena that costs more than $6.00, would be going up a $1.50 from $1.25 a ticket to $2.75 per ticket.  Revenues will be split between Rochester Arena LLC and the city. The city will use its revenues to help reduce debt from previous renovations.

The proposed agreement, which must still be approved by City Council, would run from January 1, 2019 to December 31, 2033.

City officials announced last summer they were ending a longtime management agreement for the arena with Philadelphia-based SMG.