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News & Record Masthead
December 14, 2003

Coliseum debate hardly new

City officials say the Greensboro Coliseum is doing quite well despite its unusual relationship with a minor-league hockey team.

BY TAFT WIREBACK
Staff Writer

GREENSBORO - The debate about the Greensboro Coliseum's attempt to rescue the financially ailing Greensboro Generals hockey team is nothing new for city residents.

Coliseum issues have been debated for decades. They have included the 1980s scandal over the financial irregularities then rife at the arena, three bruising referendum campaigns (two of which failed) to expand and remodel the complex, arena smoking rules and beer sales, a controversial 1996 plan to "privatize" the complex's operations and, now, the building's temporary takeover of the minor-league hockey team to keep the franchise from folding.

The irony is that while it continues to lose money and generate disagreement, the building is running about as smoothly now as it ever has, say City Council members and users of the complex on West Lee Street.

"As far as we're concerned in the ACC, we think it's the best-run facility of all the ones that we go to," says Fred Barakat, chief basketball administrator for the Atlantic Coast Conference.

Barakat gives much of the credit to complex director Matt Brown, who can be abrasive but who also gets high marks from tenants and the City Council for creativity fueled by a relentless ambition to improve the building and its performance.

Others see the building as a center-piece in the city's efforts to rebuild its economy in the wake of the textile industry's implosion in recent years. The national TV exposure generated by an event such as the ACC's annual men's basketball tournament is invaluable for those efforts, supporters say.

And its impact on the local economy, estimated at $47 million annually, dwarfs its operating losses, which have averaged about $1 million a year during the past five years.

But for such an important part of the community, the coliseum has traveled an erratic course within the municipal bureaucracy, during the past 20 years. It went from the free-wheeling regime of former' manager Jim Oshust, which caused the 1980s financial scandal, to tight City Hall controls that strangled the arena's sport and entertainment business in the early 1990s. Finally, the city hired Brown and has given him even more freedom to set the building's course than Oshust had.

The coliseum bounces periodically between intense public attention and the back burner: The building went 18 years between the internal audit that started Oshust's downfall and the next in-depth look at the complex's financial practices, in December 2002, by municipal auditors.

That most recent checkup found problems, but nothing like the widespread discrepancies of the 1980s.

Brown does not apologize for his hard-driving style, in which he focuses more on getting results than on dotting every "i."

"We're involved in a concerted effort to book and host as many simultaneous events as possible," he said in a recent interview. "We have the most aggressive, active and competitive staff ... (and) our goal is to bring in events."

The City Council has given him more authority than his predecessors and many of his peers at competing arenas because the coliseum has a lot of competition, says Mayor Keith Holliday.

"It's not so much that he is popular with us," Holiday says of Brown's high standing with the council. "It's that it is so difficult to balance a business entity like the coliseum with the demands of (municipal bureaucracy)."

"Matt has done that and still managed to produce a pretty incredible product" at the coliseum, ranging from netting multi-year deals to host ACC basketball tournaments to bringing in prominent entertainers, keeping the Special Events Center full of convention-like activity and making the auditorium available to such local groups as the Greensboro Symphony, Holliday says.

But Holliday concedes that neither the coliseum nor Brown is an easy fit for a municipal bureaucracy structured more for supplying such basic services as garbage collection and tap water than for negotiating with fast-talking concert promoters.

Brown has been in the news recently for an unusual plan to take over temporary control of the Generals while local investors try to raise money to return the team to private stewardship. It puts city taxpayers in the unique position of being financiers this year of a sports franchise that might make a nice profit, break even or cost the taxpayers a bundle.

But that willingness to transcend traditional boundaries on what a city agency does is exactly what enabled Brown to lead the building out of its doldrums in the late 1980s and early 1990s, coliseum watchers say. During that period, the building failed to attract many high-quality sports and entertainment events, partly because City Hall was intruding into the complex's business.

After former coliseum, manager Jim Oshust left in 1985 after an internal audit found massive mismanagement, city administrators tried to bureaucratize the free-wheeling sports and entertainment business.

For a while, everything was done "by the book" at the coliseum in a way that made it hard to compete in the rough-and-tumble business of promoting concerts, sports and other entertainment events, coliseum watchers say.

After Oshust's successor, Jim Evans, resigned, the city formed a committee to recruit someone who could turn the building's fortunes around. Committee members liked Brown's drive and credentials.

He had been a private consultant in the Philadelphia area after working for Spectacor Management Group, an international management firm specializing in arena, convention center and stadium management.

Brown has wide-ranging authority to run the Greensboro complex as he sees fit. An agreement ratified by the council when he was hired nine years ago says that unlike his predecessors, he does not need approval to lease the complex or get involved in other promotional activities.

City government gave Brown such extraordinary authority because that's what seemed necessary to get the coliseum back on track in the mid-1990s, especially after it had been closed for months during its multimillion-dollar expansion, Holiday said.

Brown created a stir two years after he was hired by presenting a plan to "privatize" coliseum operations through his own management company, with the guarantee of lowering the city's annual operating deficit. The council rejected the plan by a 5-4 vote after lengthy debate.

The KPMG consulting firm said two years ago that the coliseum appeared to be a well-run facility with an accomplished staff. But the consultants also said that its operating deficits, averaging more than $1 million per year, were a major concern.

By contrast, before its expansion, the coliseum typically operated in the black.

Brown said that the expansion is a key reason for today's red ink because running a larger complex is more expensive. The building also faces intense competition from arenas in Charlotte, Chapel Hill, Raleigh; Winston-Salem and elsewhere that didn't exist during the Greensboro Coliseum's earlier heyday.

"You had a 16,000-seat venue that had very little competition at the peak of the concert industry," he said of the arena's competitive advantage when it was the only game around.

Brown's expansive authority has made it difficult for city auditors to keep tabs on the coliseum, said Jacky Dowd, who retired last year as director of the city's internal auditing division.

"It was a hard thing to audit because there were no guidelines and no set rates," she said.

Indeed, Brown said that the city's December 2002 audit was off base in questioning coliseum staff for leasing the building for less than its published rates at times, costing the city up to $169,000 in "potential" revenue.

"That was not totally accurate or correct," Brown said in a recent interview.

Rather, the coliseum's standard rates are subject to negotiation and the true rate for any event is "what we negotiate" he said.

But in the aftermath of that audit and the KPMG report, the pendulum of City Hall involvement seems to be swinging back somewhat toward playing a stronger role.

City Manager Ed Kitchen has assigned his deputy, Mitchell Johnson, to work with Brown and improve coordination between the Lee Street complex and city administrators.

City officials hope Johnson can help the coliseum improve some business procedures. But improved communication among Brown, his staff and top-level city administrators will be the main benefit, Holliday said.

None of the changes, Holliday said, should be interpreted as criticism of Brown: "He's a unique kind of guy, but he gets the job done."


Contact Taft Wireback at 373-7100 or twireback@news-record.com