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News & Record Masthead
September 8, 2004

Council fills coliseum shortfall

The loss will be made up with money generated by outsourcing the concessions operation.

BY MATT WILLIAMS
Staff Writer


GREENSBORO - An unexpectedly large shortfall in the Greensboro Coliseum's budget will be filled with money from a coliseum improvement fund, the City Council decided Tuesday.

Council members praised the city-owned complex for drawing millions of dollars in economic activity, and downplayed the impact of the $2.6 million deficit it generated in the past year - more than $1 million more than the council originally budgeted the facility to lose.

"There's no one that likes this bottom line," council member Sandy Carmany said. "But this city would take a tremendous hit without (the coliseum)."

Historically; the coliseum has operated at a loss of anywhere from $1 million to $3 million annually. To make up the difference, the council typically offsets the loss with revenue from property and sales taxes.

But the loss for the fiscal year that ended June 30 was much more than the $1.55 million in tax revenue the council budgeted to make up for the deficit.

Instead of spending more tax money, the council voted 9-0 to make up the difference with money generated by the outsourcing of the coliseum's concessions operation.

Officials blamed the unexpected loss on a poor economy, which has eroded attendance at concerts and events across the country. Coliseum Managing Director Matt Brown pointed to arenas in Nashville, Tenn., and Raleigh that had larger deficits.

"We're not alone in the downturn that a lot of people are seeing," Brown said.

Mayor Keith Holliday said he wanted the public to know that only a tenth of the coliseum's loss - $259,0000 - was related to the city's management of the Greensboro Generals hockey team last season. Holiday stuck by the decision for the city to manage the team, saying it was a better option than letting the team fold.

"Whether or not people think it was a bad thing, I would still make the same choice today," Holiday said.

The council ended its management of the team this summer, and the franchise has been dissolved by the ECHL.

The council still faces unresolved issues with the Generals. A group of Greensboro businessmen led by Bill Black and Don Brady have yet to make a $200,000 payment to the city it promised as a part of the city's management of the team.

The Generals Brigade, a limited-liability corporation, was formed a year ago by Brady and Black to lease the Generals' franchise rights from the team's original owner, Greensboro attorney Art Donaldson. The company then turned the team over to the Greensboro Coliseum and agreed in a contract to pay the city $200,000 to help cover the team's expenses.

The city-owned coliseum operated the team, paying all the team's bills and collecting ticket and advertising revenue.

The city lost $259,000 operating the team partly because the Generals Brigade never followed through on the payment.

Black and Brady could not be reached for comment.

A Generals Brigade prospectus dated Sept. 18, 2003, listed five directors of the company; Brady, Black, Willard Tucker, Ken Conrad and Porter Thompson. Each of the five were reported to have invested $5,000 in the company.

According to the prospectus, the group planned to sell 42 shares in the company to wealthy individuals, thereby raising $210,000 to pay the company's obligations.

Early this year, the group fielded a plan to sell smaller shares of the team to the public, aiming to mimic the NFL's fan-owned Green Bay Packers.

But legal problems and the city's unwillingness to support the team for another season scuttled both attempts by the Generals Brigade to raise money.

It is unclear how much money the group ultimately raised and how much remains to pay the company's debt.

When the ECHL dissolved the Generals franchise in July, it made it almost impossible for the Generals Brigade to attract any more investors.

Because it was formed as a limited-liability company, it is unlikely that the company's leaders could be held personally responsible for its debts.

Council member Don Vaughan suggested that the city should pursue legal action to collect on the debt. The council met in a closed session after Tuesday's meeting to discuss a legal claim, but it is unclear whether it involved the $200,000 payment.

In other business, the council;
  • voted 5-4 to approve a plan by developer Centex Homes to develop 124 homes near Interstate 40/85 and Young's Mill Road. The council rejected a similar plan in April by a 6-3 vote.

    Centex planned to build homes in the $100,000 to $150,000 price range, but nearby residents wanted the company to build larger, more expensive homes to match surrounding neighborhoods. Opponent Barbara Starr noted that the plan offered by Centex was almost identical to the one already rejected by the council.

    "Centex is basically coming to you with the same proposal as before," Starr said.

    Both plans called for a similar number of homes, though the plan presented Tuesday put some restrictions on the development.

    Council members Yvonne Johnson, Don Vaughan, Claudette Burroughs-White and Dianne Bellamy-Small voted against the plan Tuesday. Vaughan had voted for the plan in April, while Holiday, Florence Gatten and Tom Phillips moved from opposing the first proposal to supporting the recent one.

  • voted 8-1 to annex 47 acres in Guilford County along McKnight Mill Road and Desmond Drive. Bellamy-Small voted against the proposal.

  • approved a $25,000 grant to the National Scholastic Sports Foundation to help attract a track meet at N.C. A&T. Local officials hope to host the 2005 National High School Outdoor Track and Field Championships. The meet has been held in Raleigh for several years. Guilford County officials will also be asked to give money to attract the event.

  • approved a 2.5 percent raise for City Manager Ed Kitchen, bringing his salary to $174,984 a year.

Contact Matt Williams at 373-7004 or mwilliams@news-record.com