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Archive for May 27th, 2009|Daily archive page

Council changes name on Ice Arena lease to clear way for new RoughRiders owners; proposed lease amendments will be considered later that trade lower rent for arena improvements

In Cedar Rapids Ice Arena on May 27, 2009 at 5:00 pm

In routine fashion, the City Council last night reassigned its Ice Arena rental lease to a new owner of the RoughRiders junior hockey league team.

Newco Riders LLC – a six-member ownership group which consists of three couples including RoughRiders head coach Mark Carlson and his wife – is purchasing the team from Mercantile Capital Partners of Chicago.

The new owners have scheduled a news conference for 11 a.m. today at the Ice Arena to formally announce the purchase of the team.

The RoughRiders have made the city’s Ice Arena home for 10 seasons now.

Last night’s council resolution pointed out that the new owners will continue to be subject to Paragraph 27 of the existing Ice Arena lease, which does not relieve new owners of the existing lease’s obligations. The lease runs through April 2020.

The city’s Five Seasons Facilities Commission has agreed with the new owners to amend the existing lease in a way that reduces annual rent and gives the team 10 percent of the concession revenue in exchange for the owners’ investment in a new scoreboard and media screens and other capital improvements.

Patrick DePalma, chairman of the commission, said Wednesday that the commission has signed a non-binding letter of intent with the new owners to amend the existing lease. The City Council must approve the amendments after a public hearing at a later meeting, he noted.

DePalma said the RoughRiders currently pay about $155,000 a year in rent for use of the arena, but get none of the facility’s concession revenue.

DePalma said the proposed amended lease would reduce the rent to $90,000 a year for five years before it begins to increase. The lease proposal also gives the hockey team 10 percent of the hockey arena concession revenue. DePalma estimated that 10 percent is about $60,000 a year. The city currently receives about $240,000 a year in concession revenue, which is 40 percent of a total of about $600,000. The new owners’ share will come out of the city’s portion.

In exchange, the new owners have agreed to make immediate improvements to the city arena, including installing a new scoreboard and media screens.

DePalma said the immediate infusion of money by the new owners should help increase attendance, which has declined in recent years.

DePalma called the proposed lease amendment “fair and balanced.” It keeps the RoughRiders in the arena until 2020 and brings in new owners who DePalma said have “a passion” for the game and the team.