SMG Removed from Blue Cross Arena Management

The City of Rochester notified SMG on Friday afternoon that in two weeks they would no longer be the the management company for Blue Cross Arena. SMG has been the management company behind the arena since 2000. Jeff Calkins has been the arena manager for the past 30 years through different groups. The current contract was set to expire in December 2019.

The driving reason behind this move is that SMG reportedly owes nearly $800,000 to the city of Rochester. The city asked them to pay, they couldn’t and the process started to terminate the agreement. By the end of the day on Friday the city and SMG finalized the details in ending the agreement. They’ll likely be out within two weeks at which point the city will take over managing the arena.

SMG has also stated that the city was failing to cover operating expenses as required. The city says this isn’t true. It all comes down to the bottom line and revenues have been nowhere close to the expenses of the aging arena. At the bottom of the page there’s a graph that the D&C published showing the taxpayer subsidy of the arena. It’s not good news for tax payers. Two groups of people are losing out on this news – city taxpayers and the 25 full time SMG employees at the arena.

There’s no changes expected to current events currently scheduled throughout the summer and fall at the arena.

Pegula Sports and Entertainment issued a statement saying that they’re committed to Rochester. They also said, we are continuing to work closely with Mayor Warren and her administration to create a first-class fan experience along the Genesee River that will benefit Rochester’s downtown corridor.”

Creating a first-class fan experience can only happen in one way – a new arena.

City spokesman James Smith was asked by News 8 about the Pegulas and he said, “I think they are comfortable knowing in the interim the city will be able to continue operating the stadium and will honor the agreements in place. As far as who may or may not be interested, those folks may be interested and we’re certainly going to be talking to them and there may be others as well. We need to go through a process to decide where we go from here.”

13WHAM asked James Smith as well in more detail about Pegulas taking over and he said, “The Pegulas certainly have an interest in the facility given the presence of the Amerks, and we have been in conversations with them, as a result of that. I think that if they’re interested in operating the stadium, the Blue Cross Arena, we will be very interested in talking to them.”

Upgrades planned for the arena are still expected to go forward as of writing this. The upgrades are new bathrooms, an Exchange St expansion along with internal upgrades to the audio and video equipment. Construction has not started on any of the projects. New management would likely want to evaluate future plans along with their benefits. [ Read more about the upgrades ]

In somewhat related news this could be related to discussions regarding the Rochester Knighthawks.

Two weeks ago news surfaced that the future of the Rochester Knighthawks lacrosse team is up in the air. There’s two possible options – Knighthawks owner Curt Styres moves the Knighthawks team to Halifax and then Rochester is awarded an expansion team that would be owned by PSE. There’s also been talks that Curt Styres takes the existing team to Halifax and Rochester is awarded an expansion team and keeps the Knighthawks name. Jack Goods of The Buffalo News covers that story in detail here.

Why would Curt Styres be looking to leave Rochester and why would the PSE be interested in a lacrosse team in Rochester? Styres would get a better deal in Halifax and PSE would be able to control both primary tenants of the arena at which point have more control over the building.

Since that Knighthawks story emerged there’s been very little discussed until this news Friday afternoon regarding SMG. A lot is starting to add up.

It’s not the first time in 2018 the city has taken actions to remove a company from managing a city owned sports stadium. The Rochester Rhinos reached a last minute agreement to remain at the soccer stadium through September 1st at which point they’ll have to commit to a team for the 2019 season.

Time to Talk About Blue Cross Arena Again is an ongoing article on LGA where I’ve documented what has been discussed regarding arena upgrades.

Changes are coming to the arena in some way. What those changes are and when they’ll happen remains to be seen. How those changes will be paid for also remains to be seen. Tax payers are having to put money into the arena because it doesn’t make money. It doesn’t make money because the facility is not able to accommodate a majority of touring events. The future depends on some sort of public and private partnership.

Here’s the report by 13WHAM with comments from locals as well as myself.

Here’s that graph from the D&C showing the tax payer subsidy of the arena:

This will be an ongoing story through the rest of the summer.