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Bemidji Regional Events Center: Terms of potential lease with BSU unveiled

The terms of a potential lease agreement between Bemidji State University and the city of Bemidji were made public Tuesday afternoon.

The lease - which must still be approved by the city, university, the Office of the Chancellor of Minnesota State Colleges and Universities, and the Minnesota Department of Employment and Economic Development - would commit BSU hockey to being the anchor tenant of the Bemidji regional events center.

"Everyone has come to the table with the desire to make this work," said City Attorney Al Felix, reflecting on all the entities and people involved in the lease.

The Bemidji City Council discussed the lease during a Tuesday evening work session preceding the regular council meeting.

No action was taken on the lease; it is expected to be presented to the council Monday for possible approval.

The lease itself has not been made public. However, terms of the potential agreement were released Tuesday afternoon, detailing an arrangement in which revenues and expenses are split between the city and university.

The city is guaranteed, assuming BSU maintains its men's hockey program, $9,500 per home men's game with an annual minimum contribution of $190,000.

In return, the city will offer the use of its events center, approximately 170,000 square feet, with 4,000 arena seats, 250 club seats and 25 suites. The rink will be 200 feet by 85 feet and the university will have 2,000 square feet of office space, 2,000 square feet of space for a weight room and 500 square feet for a retail shop along the concourse.

If the university ever cancels its hockey program within the 20 years of the lease term, it would pay an annual fee of $230,000 for the use of the facility for commencement, office space, training facilities and university events.

For revenue, the lease terms detail the following arrangements:

-- The city would received 100 percent of all revenue from gate receipts for non-BSU events, all ticket surcharges, all parking charges, all concessions, all naming rights for the arena and non-exclusive BSU areas, all permanent advertising not sold by BSU, and all revenues from suites and club seating for non-BSU events.

-- The university would receive 100 percent of all revenue from gate receipts for BSU hockey games, all BSU merchandise sold, all naming rights for exclusive BSU areas, and all temporary advertising along the ice/dasher board.

-- The city and university would share revenues from permanent advertising sold by BSU as the city would receive 90 percent and the university 10 percent.

-- The city and university would share revenues from suites and club seating for hockey games as BSU would receive 90 percent and the city 10 percent.

-- The city would assume all expenses for facility maintenance and repair, and arena operations.

-- The university would assume all expenses for game day expenses (such as the public address announcer, scorekeeper, security for game days and staff for retail kiosks).

Questions from city councilors mostly focused on the $190,000 annual payment from BSU.

Councilor Greg Negard said, based on his own research, that the university now is paying about $150,000 for operating the John Glas Fieldhouse.

That facility would be replaced by the events center as the home for hockey, and would also include offices, weight room and training facilities.

"To me, it just seems like the rent is a little low," Negard said.

Councilor Barb Meuers also said she felt like the payment should possibly be higher.

Councilor Ron Johnson and city staff pointed out that additional revenue would come from ticket surcharges and parking fees.

"There is a lot of other income coming in for those games," Johnson said. "The revenue you're getting from games is well over $190,000."

Also attending the work session was Bill Maki, BSU's vice president for finance and administration, and Greg Ewig, the director of real estate services for MnSCU.

The cancellation clause, which dictates that the university would pay the city $230,000 annually if hockey is no longer sponsored, has been the issue slowing down the lease process, Felix explained.

The state, and thus MnSCU, requires that the university be allowed to cancel the lease with 30 days notice.

However, language has been worked into the lease to protect the city's interests, Felix said.

If the university no longer sponsors hockey, it would be committed to pay $230,000 a year to the city in exchange for using the events center for commencement and other university events.

However, if BSU does not have the funding available, the university would ask MnSCU to pay those charges on its behalf.

If MnSCU does not have the funds, the request would be made to the Legislature for those dollars.

"We hope this language never comes into play and, arguably, it shouldn't," Felix said. "No one expects that something should happen that would involve these provisions."

The current situation of the men's hockey team was also discussed as Meuers asked how the program, and the events center, would be affected if it is allowed to enter the Western Collegiate Hockey Association

Last week, the WCHA voted unanimously to lift its moratorium on expansion. Immediately following the decision, BSU announced its intention to apply for admittance with a presentation to the WCHA in April.

Maki said the university certainly hopes to gain admittance to the WCHA, but said the university is committed to the events center either way.

"Whether they are in the WCHA or not doesn't affect this," said Mayor Richard Lehmann.

City Manager John Chattin pointed out that the revenues would be increased if admittance is granted since attendance and demand would increase.

"It's in both of our best interests to have them in the WCHA," he said.