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SBJ/August 20-26, 2012/Facilities
Complex including Rexall Place hires Legends to study sponsor opportunities
Published August 20, 2012, Page 6
The deal is part of a comprehensive look at how the nonprofit that runs the property, known as Northlands, can improve all aspects of operations at the 600-acre complex, which takes in Rexall Place, home of the Oilers; a horse racing facility; and other venues, said Richard Andersen, the group’s president and CEO.
|Rexall Place is home to the Edmonton Oilers, whose lease expires in 2014.
Last year, Northlands produced $2.8 million in net sponsorship revenue, according to the group’s 2011 annual report. The number increased from $2.6 million in 2010, but was down from $3.2 million in 2009, the document said.
Andersen, a veteran sports executive who took over at Northlands two years ago after spending many years in Major League Baseball, thinks the study will prove there is “nothing to provide but upside” for the Northlands to greatly increase its sponsorship revenue.
The Edmonton market is a hub for energy companies and is strong in the agriculture and forestry industries, leading Andersen to believe the complex could more than double its current revenue for sponsorships.
“It’s not the number we’re after, but the value,” he said. “With energy and agriculture, we have the best economy in the world.”
In addition, Northlands plans to issue a proposal next month for concessionaires to bid on food service at the complex. The nonprofit manages food in-house except at Rexall Place, where Delaware North Sportservice holds the contract. That contract expires with the Oilers’ lease in April 2014. The Oilers are developing a new downtown arena, but the project remains more than $100 million short of financing on its current estimated cost of $485 million.
Most likely, Northlands’ food proposal will cover Rexall Place. With the potential of a new vendor coming on board before the end of the year, however, that portion of the contract would not kick in until Sportservice’s current deal ends about 18 months from now, Andersen said.
Concessions and premium dining generate $40 million annually at the Northlands, which draws 4 million visitors a year, he said. It’s been a long time since the nonprofit took a look at improving that end of the operation, he said.
Venue Solutions Group of Nashville, headed by Russ Simons, is preparing the food proposal.
As for Rexall Place itself, officials have a $40 million plan “on the shelf” to renovate the 38-year-old arena for when the Oilers do leave for a new building, Andersen said. Last year, Populous designed a retrofit to eliminate many of the 67 suites for an arena losing its NHL tenant.
The arena also has the Edmonton Oil Kings of the Western Hockey League, a junior league club. It is unknown whether that team would follow the Oilers to a new venue.
Andersen remains confident the market can handle two arenas. “There is huge discretionary income,” he said.