Still rockin'

As officials in Baltimore consider a new arena,1st Mariner is doing better than ever

July 02, 2008|By Lorraine Mirabella | Lorraine Mirabella,SUN REPORTER

At a time when Baltimore officials are poised to make recommendations on a new indoor sports and concert arena, the aging facility that's being replaced is performing better than ever.

1st Mariner Arena, badly in need of renovations, had its best year financially last year and is on track to surpass that performance this year, managers say.

"We've had our most profitable year in the arena's history, and if it keeps going the way we think it will, it will be more profitable this year than last year," said Frank Remesch, general manager of the arena for venue management company SMG, which operates it under a city contract. "Most arenas lose money. We make money. The arena has absolutely found its niche."

The arena's net income - from ticket sales and concessions - has risen in each of the past three fiscal years, reaching a record $638,410 in fiscal 2007, according to financial statements filed with the city's Finance Department.

The profitable streak comes after losses in four of the five previous fiscal years.

Profit is growing despite the limitations of the outmoded facility, built in 1962 when concessions were an afterthought. Today's audience members find cramped corridors, makeshift novelty stands, poor sight lines and too few bathrooms, and some have felt the effects of rundown mechanical and electric systems when electricity has gone out.

The Baltimore Development Corp., the city's economic development arm, is preparing to announce a recommendation for a replacement after spending more than half a year reviewing proposals from some of the city's biggest developers. Seven teams have offered plans that range from keeping the facility on downtown's west side to building it in a neighborhood where major redevelopment is under way, such as Canton, Westport or South Baltimore.

The existing arena is functionally obsolete, said Donald C. Fry, president of the Greater Baltimore Committee, which sponsored a study last year on a replacement, and a member of a committee formed by the BDC to review proposals.

"This is certainly not a modern-day facility at all," he said. "The fact that it is doing so well is indicative of one thing we have learned. ... The operator is a key component of making anything go."

City-owned arenas that have a professional tenant in major league basketball or hockey typically are profitable. But those without a major sports tenant - such as 1st Mariner - often are not, said Brad R. Humphreys, an associate professor and chair in the economics of gaming at the University of Alberta in Canada and a former University of Maryland Baltimore County professor.

"It's clear the more you use the facility, the better chance it has of being profitable," he said. "I think it's interesting that [1st Mariner] is making a profit without a high-profile National Hockey League or NBA tenant."

City leaders have long talked about and studied replacing the arena, formerly the Baltimore Civic Center. A report commissioned by the Maryland Stadium Authority in May 2007 recommended demolishing it and building a 15,000- to 16,000-seat arena, to keep the city from losing events, to help it attract minor league sports teams and to spur west-side revitalization.

That size would rule out luring a major league basketball or hockey franchise, which would require at least 17,000 seats. Stadium Authority officials have said the city has no chance for major league hockey or basketball, but several of the proposals before the BDC call for a major league-size arena. Committee members said no decision has been made on the new arena's size.

"As far as I'm concerned, the size of the arena is still up for discussion," said J. Kirby Fowler, a committee member and president of the Downtown Partnership.

Humphreys, for one, said he believes it's a bad idea to build a facility in hopes of attracting a team.

"The cities that do that lose bigtime," he said. "They become a pawn in a game between sports teams and communities about subsidies."

In Remesch's view, building an arena of that size could be a money loser, putting the city in direct competition for large events with nearby cities but making it too costly for the smaller shows it now books. Average arena attendance is 7,500 per event.

With a larger arena, "we're in direct competition with Philadelphia or D.C. ... We might win, but the rent would be so high we won't get the little events," he said.

1st Mariner, which seats from 2,000 to just over 14,000 and is home to the Baltimore Blast indoor soccer team, has found the right mix for its size of sporting events, large concerts, and family shows such as Sesame Street Live, monster truck shows and more circus performances than any other facility, with 19 in March, Remesch said.

"We're a niche, and we don't compete against the Verizon Center" in Washington, he said, though it draws its audience from Alexandria, Va., to York, Pa.

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