CCO EDITORIAL: IT IS TIME TO CONDUCT A “FORENSIC AUDIT” OF THE FORD CENTER

APRIL 9,  2024

(REPUBLISHED  BTY POPLAR DEMAND)

Following six years of mystifying, extravagant impact claims, and efforts to influence the public without a vote, Evansville opened the Ford Center in November of 2011 with a concert by Tri-State favorite Bob Seger and the Silver Bullet Band. The first concert was a sellout and the facility proved itself to have good acoustics and comfortable seats. The then City Council members filed in smiling and waving to the crowd while occupying the first-row seats at the long-awaited concert.

The Ford Center construction was managed by John Kish, who should have gotten a standing ovation for bringing the project to fruition on time and within the original budget of $128.5 million. Most projects of this type go over budget by tens of millions of dollars and Kish will be forever remembered for being an impeccable steward of the Evansville taxpayer’s money.  We also give five cheers for the outstanding job that members of our local trades did building the Ford Center.

With minor opposition from Evansville movers and shakers, the City of Evansville, and its surrogates they decided to move forward with construction without having a public vote. One former citizen who didn’t support a stadium launched a campaign called “Sewers Before Stadium to force a prioritization of projected billion-dollar Water and Sewer improvements mandated by the EPA to no avail. The Ford Center is now completed, and some positive progress has been made with the all-important projected billion-dollar Water and Sewer project that Evansville has needed for many decades.

Years ago, the City of Evansville commissioned a consulting firm called Chema to do a financial projection for the Ford Center. They concluded that it would pay for itself from day one and start earning profits in year three. These projections have never been achieved.  Quite the opposite, the Ford Center has reportedly lost the City of Evansville millions of dollars in cash flow for every year it has been operating. In fact, over the years other city departments’ budgets have suffered due to the unprojected recurring annual financial shortfalls at the Ford Center.

In defense of former Mayor Winnecke from day one his administration inherited the 6-million-dollar annual interest payment associated with a $128.5 million arena construction bond debt. Coupled with the annual 6-million-dollar arena bond payment his administration was also forced to figure out a profitable marketing plan to generate enough income to pay the bills. After attempting to do so for the last 12 years it turned out to be an impossible task.

The early years of athletics and entertainment created the illusion of financial success with dollars flowing to the Ford Center from rents north of $10,000 per game rental charge from the University of Evansville Aces men and a lot less for women’s basketball teams, and the Evansville Icemen hockey team, plus a healthy dose of concerts. After only a few years, the Evansville Icemen decided to leave after a contractual disagreement with the city for the greener grass of Jacksonville, Florida where they reportedly found phenomenal success. The Lady Aces unfortunately never had the kind of crowds needed to pay the kind of rent that the Ford Center required and left for the friendly environment of Carson Center on the University of Evansville campus. The UE men’s basketball team struggled with attendance and with winning as the Purple Aces fans had become accustomed to at Robert’s Stadium where they won 5 NCAA championships and routinely drew crowds of over 10,000 per game. The Evansville Thunderbolts that were brought in to replace the Icemen have also been disappointing in attendance because of their up-and-down seasons over the years and the blush falling off of the rise of hockey in a baseball town.

The largest crowds ever at Ford Center are the two trips to the Tri-State by former President Donald Trump during his campaigns that drew over-capacity crowds that spilled into the street. It is not publicized as to whether the Trump campaign paid a fee or not. Â Also, over the years some rock and county concerts drew respectable crowds while others didn’t even fill the floor. 

The Ford Center, as nice as it may be, has seemingly never been anything but a financial drain on the people of Evansville. The most recent example is the approval of  Evansville City Council Financial ordinance G-2023-17 that grants the City of Evansville Redevelopment Authority (not to be confused with the Commission of the same name) the approval of a 9 million dollars in “LEASE /RENTAL REVENUE BONDS by a 6-2 vote (Missy Mosby and Ron Beane voting against the proposal with Jonathan Weaver absent and didn’t vote). Voting yes for the proposal were: Ben Trockman, Alex Burton, Zac Heronemus, Jim Brinkmeyer, Koehler Lindsey, and Kaitlin Moore). The City Council members voted Yes to approve the “LEASE /RENTAL REVENUE BONDS to do capital updates to the Ford Center knowing that the current Ford Center annual income cannot support an additional 9 million dollar bond debt payment.

The collateral for the 9-million-dollar projected costs to update the FORD CENTER interior and exterior signage and concession areas are leasing and renaming rights of 29 streets throughout Evansville by using an obscure provision in the law known as “LEASE/RENTAL REVENUE” bonds.   It’s important to point out that members of the Evansville City Council unwisely approved this transaction with little discussion and without asking for a detailed breakdown of the costs of the improvements at the Ford Center, the interest rate of the bonds, or the term of repayment of these bonds. These terms and conditions were not disclosed in the loan document given to City Council members at the time they voted.  We wonder how many leasing and renaming rights of the 29 streets throughout Evansville the City of Evansville Redevelopment Authority has sold and for what amount since the City Council approved the issuance of the bonds.

It is time for transparency to be demanded on behalf of Evansville taxpayers concerning the Ford Center’s financial operations. The Evansville taxpayers, (not the politicians) who pay the tab at the Ford Center deserve to know how the cash flows from one government entity to another in the game of Multiple Card Monte played in Evansville to generate an honorable profit at the Ford Center.

We urge Mayor Terry to do the right thing by encouraging our newly elected City Council members to join her and conduct a Forensic Audit by an out-of-state private auditing firm of the Ford Center.  We would like to stress that we feel that a Forensic Audit would be appropriate due diligence on behalf of the taxpayers of Evansville and will help our elected officials correct the questionable financial and management practices of the past that will forge a new direction for making the Ford Center more financially sustainable.

FOOTNOTE: Attached below is a link to the recent contract between the EVANSVILLE REDEVELOPMENT COMMISSION AND VENUE WORKS which manages the FORD CENTER on behalf of the City.

Ford Center Renewal Contract July 2021

The City does not refer to the Ford Center tenants as â PRIME tenants However, it is assumed the tenants that rent the most calendar dates are the ones you may be referring to. Those would be the University of Evansville and the Evansville Thunderbolts Hockey Team.  The Evansville Thunderbolts Hockey Team is managed by Venuworks/VW Sports of Evansville, there isn’t an additional contract included in the initial contract attached. Also attached is the contract between ERC and the University of Evansville.  This fulfills your record request.

Danielle,

Thank you for your hard work.  I appreciate how you have stepped up to the plate and filled in for the Parks Director.   It is never easy to pick up the threads of someone else’s job and projects.  You are doing a great job and are handling everything very well.

I need to have answers to the following questions as part of my due diligence.

Please note, with the holiday coming this weekend, I do not want or expect anyone to provide the following information until after January 1st. This should not be viewed as a last minute project, it is not that urgent. However, I would like to have it by the second monthly Parks Board meeting in January 2024.

When the CK Newsome Center kitchen renovation was first brought up early this summer, I was not made aware the design firm would charge $65,000 +/- for just the design.  As I stated during the meeting yesterday, I am dismayed this company requires another $35,000 for just the design bringing the design cost alone to approximately $100,000+.  Their representative said the kitchen is estimated to cost around $1.5 million dollars, possibly higher.

I have owned 4 restaurants over the last 30 years.  It is my understanding through my own experience,  the ansul fire prevention hood runs around $40,000 and the EPA required buried or above ground grease trap tank is around $30-50,000. The cost difference depends on the gallon size of the tank and how far away the plumbing has to be run.

Depending on the condition of the plumbing and wiring, these will likely have to be upgraded to match current building code.  The cost of appliances can be economical, state of the art or anything in between.

A new restaurant kitchen in a facility that is going to kick out 3 meal services a day, 7 days a week, is usually not over $1.5 million dollars.  If it is this high, it will have lots of specialized equipment that a civically owned facility will not need.

I would like a copy of the current kitchen design with a list of proposed equipment and its brands.  I would also like to know the square footage of the space designated for the kitchen.

I also would like to know how this kitchen is used, how often and by who on a regular basis. Who uses it, how many times a year is it used? Is there a charge to the public for use of the kitchen/hall for private functions?  If so, please let me know what it is.

It is customary in this day and age for events to be catered with food prepared ahead of time with it being reheated and/or kept cold until the time it is plated at the event.  Caterers need warming ovens, counter space, refrigerators and freezers, i.e. basic stuff.

Also, it was mentioned yesterday during the meeting that one of the homeless shelters occasionally or regularly serves meals at the CK Newsome Center. Please let me know who this group is.  How many meals do they serve a week, a month?  What is the CK Newsome Center’s arrangement with this group?  I would like to know who funds them.

Can food truck operators rent this kitchen in order to meet health dept requirements?  There is a strong need for this without our community.

At this moment without any additional information, I cannot accept that the CK Newsome Center needs a $1.5 +/- million kitchen to serve food to the homeless.  I agree that CK Newsome Center kitchen does need to be replaced.  However, I was expecting the cost to range around $300-400,000.

After reviewing the above mentioned materials I hope to gain a new understanding for the proposed cost of this kitchen.  I believe my fellow board members also need greater insight into this project.

Thank you for your understanding and patience.

Michelle Peterlin

Vice President

Evansville Parks Board of Commissioners