Journal Staff
Sarnia has turned down an offer from the Sarnia Sting to take over the sale of luxury suites at the city-owned Progressive Auto Sales Arena.
The city’s income from leasing out 37 fan boxes has declined in recent years, with last year’s revenue falling $94,000 short of the $400,000 expected.
The Sting offered to take over the suite sales, using its full-time sales team to guarantee the city $225,000 a year in revenue, plus up to $25,000 from any additional lease agreements.
The Sting also wanted the city to act immediately, because with the hockey team in the playoffs the marketability of the suites is highest right now.
Councillors rejected the deal last week, saying the organization hadn’t provided enough financial detail or enough time to consider all the implications.
“I don’t see this as a good deal. I’m not going to be supporting it,” said Coun. Matt Mitro, who described himself as a right-of-centre private sector guy.
“This is a major (revenue) generator in that building and we’re giving it up at a loss. I don’t understand how that makes sense.”
A one-year lease for a luxury suite at the arena currently costs $19,278, of which $14,500 goes to the city for the box and $4,778 goes to the Sting for eight season tickets, according to a city staff report.
A lease for 10 years costs $14,278 annually.
But the city’s demographics have changed and some suite-holders are grumbling about the cost, the report notes.
“Given the current market conditions, with 18 agreements expiring this summer, there is risk of future suite’s revenue being below the current budget.”