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Editorial: A lesson in caution: the Glens Falls Civic Center

Sunday, July 6, 2014
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When the Glens Falls Civic Center was envisioned back in the 1970s, it was seen by municipal officials as an economic engine for the struggling city.

And for the most part, it has lived up to that role, generating millions of dollars in economic benefits for the city and the region through business generated by concerts, professional hockey games, the state high school basketball tournaments and other events at the arena. Bars, restaurants, hotels and shops throughout the area have been the beneficiary of the city's investment. One estimate a decade ago said the center generated $9.5 million annually for the local economy.

But as time has gone on, the debt service and expense of running a 5,000-seat ice hockey rink, arena and banquet hall have placed an undue burden on the city's $16.9 million annual budget and the 14,700 Glens Falls taxpayers who have shouldered the entire expense of the arena all these years.

Yes, they've gotten the benefit. But they've also paid the price.

City officials have tried to entice other beneficiaries of the area, including surrounding towns and counties, to share in the costs, since their constituents and their taxpayers have benefitted from it. Any kind of investment from other municipalities would have relieved Glens Falls city taxpayers of some of their financial burden. But attempts to create a regional authority to support the arena or to invest a share of the county occupancy tax from hotel room bookings into it haven't panned out. Why buy the cow, as the saying goes, when you can get the milk for free?

As a last resort for alleviating the city's $659,000 annual subsidy (plus an extra $300,000-plus in shortfalls) for the arena, city Mayor Jack Diamond announced recently that the city was putting the arena on the auction block. For a minimum bid of $1.5 million, you get a 35-year-old, 160,000-square-foot building on 3.5 acres of prime downtown real estate. The only caveat is that the buyer would have to honor the three-year contract for the new American Hockey League franchise, the Adirondack Flames. That should be no problem for the new owner, since having a tenant guarantees reliable income for the arena for at least 40 nights a year and provides a marketing hook to attract other events.

The sale of the arena provides a cautionary tale for other cities looking to invest public money in a facility such as this. When the Civic Center opened in 1979, the city was invigorated by the prospect of having the minor league affiliate of the legendary NHL franchise Detroit Red Wings in the house.

And over the years, the arena became synonymous with great concerts, hosting everyone from the Who and the Grateful Dead to Bob Hope and the Beach Boys. Add in the hockey, circuses, wrestling and state high school championship games featuring future NBA stars, and you've got one heckuva tourist draw.

But even all that was never going to be enough to sustain the arena through the years. The problem is that civic centers aren't really designed to be money-makers. They're loss-leaders, whose mission is to boost other businesses around them. That's why communities invest in them.

But the losers of the loss-leader concept end up being the local taxpayers, who ultimately are saddled with the mortgage and the lighting bill.

And so the Glens Falls Civic Center is on the auction block, giving an energetic private operator the chance to make it work financially.

It's probably the approach the city should have taken in the first place.

And it's probably a message that other cities should heed.

 
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