From the desk of the President………
Celebration Arena Update
In our effort to keep everyone informed, I would like to update you on where we are with regard to the Celebration Arena.
On May 2nd, we executed the sales contract with the buyer. We recently finalized all the paperwork. Basically, the terms are as follows:
1) We receive $800,000 in cash.
2) We get a 5 year deal at one-half the cost of the regular rates for our Spring and Fall Celebration arena cost. During this time, we keep proceeds from parking, admissions and current box seats. The Buyer will get concessions and vendors proceeds.
3) There will be no increase on the above rates for 2 years. After that, there will be no increase above 5% per year for the next 3-5 years.
4) During the 1st 5 years if at any time, for any reason, the facility is not available to us for the year during our designated Spring and Fall Celebration times, the Buyer will compensate us $40,000 per year. (Worst case scenario: if facility is unavailable for all of the first 5 years, this would mean an additional $200,000 total compensation to us.)
5) We can maintain our offices (approximately 50% of the total office space) rent free for as long as the buyer owns the facility. We will pay our share of the utilities and keep our phones.
6) We will have use of the Board Room when needed during both Celebrations and other times, as needed.
7) After 5 years, we will have first right of refusal for our designated dates for our Spring and Fall Celebrations and will continue to have first right of refusal for an additional 25 years thereafter.
The contract (by law) allows for 90 business days due diligence and a maximum of an additional 10 business days for closing. We are hoping to complete and close sooner than the maximum allowed.
We have, however, also elected to go ahead and lease the facility to the buyer beginning May 31st, 2008, at which time the Buyer will begin management of the facility. At that time, effective May 31st, 2008, the Buyer will begin paying ongoing expenses for the maintenance of the grounds.
In addition, beginning May 31st 2008 when the Buyer begins leasing the facility, Don Stisher will become an employee of the new buyer. Don has done an excellent job for the RHBAA and we look forward to continuing our relationship with him in the future.
Also at the time the new buyer begins leasing the facility, a portion of Donna’s expenses will be paid by the new buyer, as she will be answering the phones and performing other administrative duties related to the arena until final closing.
I have had a lot of questions about barns, box seats, etc. We will maintain control over these during our shows as we have in the past – nothing will change in that area. Unless some new seating configuration takes place, box seat holders will maintain their current seats. If you have had barn rights as a result of your improvements and long term commitments for those stalls, you will continue to have the same barn rights.
I am looking forward to the improvements the new owner plans for the facility. There is a link on our web site that will take you to a Decatur Daily article that mentions some of those plans. I think you will be excited that some of these improvements will finally come to fruition.
I am thrilled about our growth opportunities for the future without the financial burdens we have struggled for so long to endure.
If you have any questions, feel free to contact myself or your Director, as each of them have been fully informed and included in all of these changes, from the initial discussion to final decision.
I look forward to seeing you all soon.
Ed Hiers
RHBAA President