Arena Promises Turn to Burdens for Small Cities

Construction of a multi-use event arena in Rio Rancho, New Mexico, was supposed to be a boon for the city. But when events dried up, costs mounted and a big building became a big mistake.

May 19, 2011, 6:00 AM PDT

By Nate Berg


The company behind this failed arena has also planted stadia in other small cities with similarly poor results.

"The arena, which Global Entertainment said would be profitable in a year, has lost so much money that Rio Rancho has had to spend millions of dollars each year to keep it afloat. The city fired Global Entertainment in 2009 and sued it to recoup hundreds of thousands of dollars in unpaid bills.

A new arena manager has brought in more business, but the losses have continued to mount, eating into the city's already tight budget and pushing lawmakers to eliminate jobs and cut costs, including asking police officers to buy their own practice ammunition.

"If you look at the numbers that Global Entertainment presented to us, it was really, really questionable then, let alone during a recession," said James C. Jimenez, the city manager in Rio Rancho, who was hired after the arena foundered. "If we didn't have to allocate the money for debt service, our employees would have had raises and our budget would be in a better position." "

Monday, May 16, 2011 in The New York Times

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