The management contract at Freedom Hall, Johnson City, Tenn., has been out for RFP.
Two private management firms — Spectra Venue Management and OVG Facilities — have responded to a request for proposals to manage Freedom Hall Civic Center in Johnson City, Tenn.
Tom McDonnell, Spectra director of business development, and Tom Paquette with OVG Facilities presented their visions Feb. 1 for operating the 7,000-capacity arena, built in 1974. The meeting was before four commissioners, the city manager and two assistant city managers. Lisa Chamness, manager of the city-owned venue, which sits on a middle school campus and cost $1 million to build, said the arena has been upgraded to the tune of about $16 million over the past eight years.
“The building is in great shape,” Paquette said. Oak View Group (which also owns VenuesNow) sees it as an opportunity to use OVG’s booking and marketing resources to secure more shows for a growing market. “It’s a nice size building for that market.”
Having been in talks with the city for a year, McDonnell said he, too, is most impressed with the renovations. For an older, nongraditional venue, "one that has a cafeteria and gymnasium attached to it, the inside bones are great. The staff there has done a great job."
OVG Facilities responded to the RFP when it was still Pinnacle Venue Services, before it was purchased by Oak View Group, Chamness said.
Chamness, who has worked for the city for 31 years as of April 8, said Johnson City is also interested in a possible naming-rights deal and would lean on the winning bidder to facilitate that process. In addition, she is excited about the probability of a more robust marketing program, encompassing social media and a new, dedicated website.
“We’re on a school campus and there are some challenges, most of which will be dealt with in the next two years,” Chamness said. “There’s lots of flexibility once the kids are out of here.”
Concessions, parking and maintenance are handled inhouse. Ticketsage won the ticketing contract in 2008. The arena has 5,600 permanent seats. It also contains a second kitchen that is used by the 2,500-student Liberty Bell Middle School. They plan to move that operation to a new facility on campus in 2020, at which point Freedom Hall can upgrade its concessions using that kitchen as well as the main arena kitchen.
More importantly, when the middle school moves out, they may be allowed to serve alcohol in the arena, Chamness said. That is among the positive things private management can do that, as a city department, Chamness cannot do.
There is also a swimming pool and small gym used by the junior high which will be abandoned in the next few years and could be repurposed as a banquet room, Chamness said.
In 2017, revenue totaled $1.878 million, compared with $3 million in 2016 (thanks to Elton John and Disney on Ice) and more than $1.7 million in 2015. The deficit, which the city is looking to reduce, ranges from $80,000 to $300,000 annually. Chamness has a staff of six
“We’ve had a great relationship with the middle school the last 20 years, “ she said. She works to accommodate activities on campus, limiting daytime flat shows at the venue, and lets students use the venue as an auxiliary gym or walking track during inclement weather, working closely with the physical education teachers. Parking is ample for both enterprises. Eastern Tennessee State University plays 16 home basketball games at Freedom Hall.
Freedom Hall hosted 15 ticketed events last year, drawing 120,000-150,000 to all events in a year. They have had a few mega-shows, most notably Elton John, who loves playing there because he can fly in from his home in 45 minutes and be back to sleep in his own bed that night. “He can be home before we are,” Chamness said.
Currently, Chamness cannot promote or co-promote shows.
Johnson City proper has a population of 68,000 and is the biggest in the tri-city area, which includes Kingsport (home of Eastman Kodak) and Bristol, Tenn. Within a 60-mile radius, which encompasses southeastern Kentucky, southwest Virginia and western North Carolina, the market swells to at least 500,000.
The next step is to seek a pro forma from Spectra and OVG Facilities, probably in the next 30 days. There is no definite timeframe for making a decision, but Chamness believes it will probably happen before the new fiscal year, which starts July 1.
This is not the first time the city has discussed private management, but it is the first time it has taken it this far.