Thursday, September 10, 2009

Products Mart willing to deal

Products Mart willing to deal
Celebration Arena purchase could happen if Racking Horse Breeders Association meets conditions
By Ronnie Thomas, Staff Writer, The Decatur Daily

If the Racking Horse Breeders Association of America agrees to $30,000 annual rent on a five-year leaseback, State Products Mart is ready to purchase Celebration Arena from the association for $650,000.
There are other stipulations in the contract that the Products Mart board unanimously approved Wednesday after a two-hour meeting.
For example, the board will construct a secondary warm-up arena between the stables and the rear entrance of the main arena. The board also will provide money for improvements and renovations to the 38-year-old, 118-acre site.
The breeders association purchased the arena for $1.3 million in 1994, according to Judy Jones, an association board member and past president.
The association’s decision on the sale could come during the upcoming Racking Horse World Celebration.
Donna Kaufmann, the association’s acting manager, said the breeders’ board will meet Sept. 25 at 8 a.m. The general membership will meet the next day at 9 a.m.
Products Mart board attorney Tom Caddell said he’ll put a closing date of no later than Jan. l into the contract.
A sticking point with the Products Mart board since March is that it wants the Morgan County Commission to approve appointing a Parks and Recreation board to manage the Priceville arena. Commission Chairman John Glasscock, who in June broke a 2-2 tie against a resolution incorporating the park board, has changed his mind.
“If (Products Mart) follows through with two items in the contract, I’m committed to vote for appointing the board,” he said.
Glasscock wants the contract to keep a provision that requires the Products Mart board to provide basic maintenance on the arena during the term of the lease. He also wants Products Mart’s guarantee it will fund through the Parks and Recreation board any operating de­ficit during those five years.
District 3 Commissioner Don Stisher said the appointment of a board will be on the agenda at the Sept. 22 commission meeting.
The Products Mart board acted after presentations by business and financial consultant Jim Gregory and certified public accountant David Scott.
The board hired them to do a feasibility study on the arena.
They presented a report that summarized revenues from events in 2008.
Scott said he separated revenue of the Racking Horse Breeders Association of America events, which totaled $90,400, without the association paying rent or concessions.
The other events generated $139,300, for total revenue of $229,700.
In looking toward the future — for example, the hiring of a manager/marketing director — Scott projected total expenses of $214,200, leaving a net income of $15,500.
The previous offer for the arena would’ve allowed the breeders’ association to retain all revenues generated for the three Racking Horse Breeder events, leaving a projected net loss of $74,900.
That loss would be reduced to $44,900 under the Product Mart board’s counter-offer that requires $30,000 annual rent.
Scott said the study doesn’t take into account new shows that a marketing director might generate.
“It may be a diamond in the rough and take a lot of polish to become a jewel in Morgan County’s crown,” Scott said of the arena.
Gregory said the arena scheduled at least 64 days of events this year, noting that some are recurring. He said renting the arena for another 100 days annually is conceivable.
The Products Mart board approved paying Scott $4,187.50 for his services, Gregory $3,902.

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