Venue operator SMG has been notified by officials with the city of Rochester, New York that their contract to run the Blue Cross Arena is being terminated, effective July 13.
“We are entering into negotiations with SMG with an eye toward having a mutually agreed-upon termination of their contract,” city corporation counsel Timothy Curtin told the Democrat and Chronicle newspaper, noting that SMG had “performed below expectations, and it is our view we have to change paths.”
The building is home to the Rochester Americans AHL minor-league hockey team, which is owned by the Buffalo Sabres. It’s possible the team could operate and manage Blue Cross Arena — the Sabres operate the KeyBank Center in Buffalo on behalf of Erie County.
SMG has 25 full-time employees working at the arena including GM Jeff Calkins and director of operations Richard Mason. According to Rochester mayor Lovely Warren, SMG failed to meet certain financial benchmarks, increasing the subsidy paid by the city to operate the building to $1.2 million for the current fiscal year, 2018-2019.
SMG general counsel Bruce Hanson told the paper SMG met its obligations and blamed the city for failing to cover certain operating expenses outlined in the contract between the two.
“He said SMG was ‘surprised’ by the city’s action, but also that he suspected the city and Sabres started talking about facility management ‘a long time ago,'” the Democrat and Chronicle report. “Nonetheless, he said, the company planned to ‘put all this behind us’ and work toward an orderly handoff.”
Mayor Curtin disputed Hanson’s claim that the city hadn’t paid what it owed, telling the paper “we had to cover all operating expenses irrespective of the income, so we got into a situation where the revenues weren’t even close to expenses, and that’s why we took the action.”
Hanson said the SMG contract for the arena dates back decades telling the paper “This is probably one of the longest facility management contracts you will find out there.”