Before Escambia County does anything with Jay Patel and his Pensacola Arena Development Partners, the Board of County Commissioners needs to have staff do background checks on the partners. One that deserves special attention is Richard Kozuback, President & CEO of International Coliseums and the president of its predecessor, Global Entertainment.
Escambia County and City of Pensacola have had a history of falling prey to smooth-talking outsiders — think Scott Davison of Maritime Park Development Partners; MCM-BAP, LLC and its $40-million luxury hotel at Maritime Park; and Texas developer Aaron Aaron Wiese who was going to pay $7.6 million for the ECUA Main Street Plant site.
Google Kozuback and his two companies, and you will find articles about failed arenas.
New York Times – May 16, 2011
Company’s Arenas Leave Cities With Big Problems
Santa Ana Star Center in Rio Rancho, Ariz.: Global Entertainment built and managed the arena. “The arena was a money loser from the beginning. It lost $241,000 in its first nine months, ending in mid-2007, and millions of dollars since. Rio Rancho expects to pay $3.6 million this year to keep the arena running and to pay for its bonds, money that was supposed to be covered by profits from the arena.”
Town Toyota Center in Wenatchee, Wash.: “That arena, home to the Wenatchee Wild of the North American Hockey League and the Wenatchee Valley Venom of the Indoor Football League, has also failed to turn a profit, and roughly 15 percent of the city’s $22 million budget is devoted to paying off the bonds for Town Toyota Center.”
Tim’s Toyota Center in Prescott Valley, Ariz.:”…several investors who bought some of the $35 million in bonds issued to pay for the arena have sued the company and its top executives, the city and its underwriter, alleging that they ignored pessimistic feasibility studies and knowingly issued overly optimistic growth forecasts so they could win higher bond ratings.”
Global Entertainment later filed for bankruptcy.
According to the this article on fortmcmurraytoday.com, dated June 25, 2016, Kozuback and International Coliseums tried to distance themselves from Global Entertainment, but it didn’t work.
In October 2015, the Canadian city’s town council voted to scrap the International Coliseums proposal for a $120-million arena. Read Council scraps downtown arena proposal in 7-3 vote and Ding, dong, the arena is dead.
These are articles were easily found on the internet.
It has been eight months since Patel made his presentation. Why hasn’t county staff called these cities and asked about Kozuback and his companies? Are they just accepting everything on face value?
As a reminder, the Master Development Agreement and Master Lease Agreement between the City of Pensacola and the Community Maritime Park economic development project’s developer the private Community Maritime Park Associates, Inc. (CMPA) described certain “condition precedents” that had to be done before the City could execute the Master Lease with the CMPA. When I was running through the checklist, I cold not find the “economic viability'” analysis that the City was required to conduct using an independent contractor. I contacted Ed Spears who was the CMPA Executive Director (paid by the City) and also the city’s Special Project officer for the CMP, plainly an obvious conflict of interest. Spears said that the city’s study was being done. When he sent me what it claimed to be the study I objected because what he want was an internal CMPA financial analysis of its contract with its sub-developer Scott Davison later fired I part because he kept pointing out that project was going to be a financial disaster if the 972-space parking structure was not moved up from Phase II to Phase I. Spears told me that “he” was going to substitute the CMPA’s study for the City study and did. I warned both the City Council and the CMPA. None of them cared. The City Council voted the never begun study complete 10-0. Later, I submitted a public records request to City Manager Al Coby asking to review a copy of the study that the City Council voted complete. He wrote back saying that he could not give me a copy because it did not exist. He sent a copy of the letter to Mayor Mike Wiggins who already knew that the study had been “pencil-whipped.” I provided a copy of Coby’s letter to the City Council and the CMPA. No one cared. For this project, a better idea is to let Patel + Friends build, operate and maintain the sports arena using their own money, keep all the profit and absorb all the loss. I doubt they would do that because the plan will be a money loser. The county would be better off selling the Bay Center for $1 and letting the private sector run it.
Feckless leaders are quick to dismiss “pessimistic feasibility studies” as coming from progress-hating Luddites. The business of cheerleading/consulting for these kinds of projects must be tough on a guy though – having to move from town to town before they catch up with you.