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Leasing arena saves $203K
Bullard’s proposal preferred over city’s, would cut personnel
Published Wednesday, June 24, 2009
If the proposed agreement between local businessman Don Bullard and the county commission to lease the Covington Center Arena is signed, the county will save more than $200,000 annually and eliminate all overhead expenses at the facility, including maintenance and personnel costs.
Bullard’s proposal, which was discussed briefly during Monday’s commission workshop meeting, was one of two received for the arena, county administrator Brenda Petty said.
The other offer, submitted by the city of Andalusia, would have required a $50,000 annual payment by the county to the city in exchange for the city assuming operation of the arena.
In Bullard’s proposal, which was a five-year contract with an option to renew for an additional five years, he agrees to pay the county $1,000 a month and assume all maintenance and operation costs of the facility.
By doing so, the county will save an estimated $203,000 annually, she said.
Petty said each year the county spends $191,050 to operate the arena. This money is appropriated annually from the county’s general fund.
The annual debt service on the building, which is also paid from the county’s general fund, is $228,348. Without a lease agreement, the county spends more than $419,398 on the arena.
By accepting Bullard’s proposal, the county can eliminate its annual operational costs and add an additional $12,000 to the county coffers, bringing the county’s total cost for the arena to $216,348 annually.
If the county had chosen to accept the city’s offer, the net difference in annual savings would have been $141,050 — a $62,000 difference, Petty said.
“What has been discussed is that, if the commission decides to enter into a contract with Mr. Bullard, that money we save — that some $203,000 —we put into the general fund and use it to make the annual debt payment,” Petty said. “If you look at the savings to the general fund, that’s almost the entire payment.”
Petty said monies used to construct the arena were a portion of a bond measure, which is set to be paid in full in 2032.
Commissioners are expected to vote on Bullard’s proposed agreement Thursday at 9:30 a.m.
Comments
Posted by countyconscience (anonymous) on June 24, 2009 at 12:47 p.m. (Suggest removal)
The folks on the county commission obviously never went to LBW and took Economics 101. WE can save $203,000 by leasing the arena. This only means that they will no longer be paying Tony Wells and crew, utilities and other things they spent money for. They are also giving up all revenue from events he3ld at the arena in exchange for $12,000 a year. They reason that by saving $203,000 a year that they can apply it to paying the debt service of $228,348. They admit to currently spending $419,398. without operating expenses which leaves them with $216.398 a year in cost. Subtract the paltry $12,000 a year they will get from Bullard and they are still on the hook for $204,398.
But wait....The county still owns the wont they still have to carry liability and casualty insurance as required under the bond agrrent on the building.
$431,345 annually. Meanwhile, Bullard and who ever is backing him gets free reign over the arena for a mere twelve grand a year. They can charge any fees they want, establish whatever rules they pleases and bring in any kind of entertainment they desire, even electronic bingo. This i like selling a motor grader in usable condition for $100 because you wont have to put fuel in it anymore.
Posted by biscuitsandhoovergravy (anonymous) on June 24, 2009 at 3:49 p.m. (Suggest removal)
I totally agree...from a fiscal standpoint this is a sweetheart deal from the get-go. Who has done an economic impact study on the arena to see how it positively affects the community? What happens to the moneys currently being spent on food, lodging, and other products and services in the community by the people who attend functions there?
Do any of you really believe Bullard has any intentions of using the arena for anything more than a personal roping arena? Why not turn management of the arena over to a professional management company who will operate it on a percentage of revenue generated contract? The star news needs to publish a p&l statement on the arena covering the last 3 years at least and let the tax payers who are paying for this arena see for themselves how it is doing financially.
Posted by Forallpeople (anonymous) on June 24, 2009 at 4:32 p.m. (Suggest removal)
They had all the time in the world to turn it over to a "professional management company". As I said before no one wanted the responsibility of it. No one wanted to choose a company in fear that they would fail and the Commission would be held responsible for the choice. It was a double edged sword and I believe they made the best choice. You should at least give Mr. Bullard the benefit of a doubt. He has owned and ran a very successful business in our county for many years. What would be the benefit to him for the Arena to not be successful. If he brings more venues in that means more tax revenue for all our businesses. There are many venues that the Arena could host that have not even been touched on yet. Give the man a chance!!!
Posted by AndalusiaWatcher (anonymous) on June 24, 2009 at 5:47 p.m. (Suggest removal)
Covington County has about nicest newest Civic Center (Arena) in South Alabama and Northwest Florida that I know of that exist within a two or three hour driving distance in all directions. I would love the opportunity to be in Mr. Bullard's position to undertake the opportunity to book events for all kinds of entertainment in an entertainment deprived area, it should and could be a very lucrative business for the entire community if everyone would support the idea in the private and public sectors. It seems the Covington Commision is ready to do their part. I read where the City is about to redo Riverfalls Street and purchase the existing Alatex Textile Plant property, this should be enough to keep them busy if they put a real sincere effort in it. This.....combined with a nice, new, privatley run Civic Center with Entertainment....Who Knows,
Andalusia may finally have something going for it in a good, positive direction for a long, overdue change. People may start to move into Andalusia again, instead of moving out, the first chance they get. Give Mr. Bullard an opportunity, give the citizens an Opportunity..............!
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