By Gary Gray
Two prominent companies have toured Freedom Hall Civic Center and a third will do the same next month, in what now is a concerted effort by Johnson City officials to craft a potential agreement for the private operation of the iconic facility.
“A national company could provide better access to entertainment,” City Manager Pete Peterson told the News & Nieghbor. “We’re real curious whether a third party might be able to run that building more efficiently. It’s tougher to pull in music acts because of all the choices they have, including outdoor venues. There’s only so much disposable income in the area.”
During the Johnson City Commission agenda review meeting on April 17, Assistant City Manager Charlie Stahl produced for city commissioners a one-page list of services that the companies could provide for Freedom Hall. Marketing and sales sits atop that list, and the first bulleted item is “maximize revenues and enhance facility image.”
Johnson City has subsidized operations at the facility for 43 years at average cost of about $250,000 per year. The city owns the building and leases it to independent promoters. By law, the city is not allowed to sit in the promoter “seat.” The city’s revenues from Freedom Hall are limited to rental fees, which can be a flat fee or a percentage of ticket sales. Other revenues come from parking fees and concessions.
“We have largely begun to study this possibility by talking with specific firms of a regional and national nature,” Stahl said. “Commissioners last year — in conjunction with the $13 million in renovations at Freedom Hall — have recommended we should look at enhancing the number of events.”
Philadelphia-based Spectra and Pinnacle Venue Services of San Antonio, Texas, have toured Freedom Hall. SMG, headquartered in Columbus Ohio, will visit in about two weeks.
Spectra has an impressive list of clients, and specializes in the management of sports venues and convention and performing arts centers. Pinnacle also has a large portfolio and manages sizeable venues and provides consulting and strategic planning services. Likewise, SMG manages more than 230 facilities worldwide including those that have hosted the Super Bowl and World Cup Soccer.
In February, city commissioners agreed that a new management strategy for Freedom Hall, as well as three other venues involving both the city and East Tennessee State University, should be thoroughly fleshed out.
The interconnected uses at Freedom Hall, the Millennium Centre, Mini Dome and the coming ETSU performing arts center have brought to light the potential need to hire one company studied in the entertainment industry to do the scheduling, ticketing, programming and overall management of the four facilities.
Stahl said it will be up to commissioners to wade through their options regarding what services are needed or desired.
“I think it could be any number of services, depending on what commissioners want to do,” he said. “We have not issued an RFP (request for proposals), but my guess is something will develop in this year’s budget process (this spring).
Potential services include identifying and engaging corporations through naming rights, sponsorships and advertising, as well as vending rights agreements. Outsourcing also may involve event booking and management, ticket sales and box office management.
Companies also could manage day-to-day operations, fashion long-range plans and capital improvements, provide staffing, handle all purchasing and prepare budgets and financial reports. In the end, commissioners could choose to incorporate most or all services, hand pick only what they consider the most beneficial or drop the idea.
Peterson said this year’s Elton John concert likely generated about $750,000. The average rental fee is between $5,000 and $6,000. The performer gets the lion’s share and the promoters get theirs. But Peterson said the overall take for the city after big shows comes only from fees and concessions.
Meanwhile, the debate about whether beer will be sold at certain events continues. Peterson said attorneys are still working to determine if the move is legal, and they have decided to approach state officials to see if beer sales could be allowed.
When the city issued bonds to construct Freedom Hall, the deal included that money was to be used for school purposes. The bonds have been retired, but the center currently hosts both for-profit entertainment and school functions.
Liberty Bell Middle School, and on occasion Science Hill High School, use the center. The schools get first shot based on need for the cafeteria, kitchen and physical education area.
“The state specifically has a law that says you cannot sell beer on a school campus,” Peterson said. “We’re well aware of that, and right now schools have first priority. But we’re in the process of designing a new cafeteria and gym and to repurpose the building so schools will no longer be in there.