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Cal U severs contract with convocation center manager

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Monday, Aug. 26, 2013, 12:27 p.m.
 

California University of Pennsylvania has fired the Iowa-based company hired to manage its controversial $59 million convocation center, school officials said on Monday.

The 142,000-square-foot center has been a flash point for criticism from many who claimed it was too big, too costly and one facet of a free-spending building boom by former President Angelo Armenti Jr. that plunged the school deeply in debt. Armenti was fired in May 2012.

Armenti's sharpest critics, members of the school's faculty union, were overjoyed at the news the school was severing its ties to the management company VenuWorks.

“We just want to yell, ‘Finally!' and ‘Alleluia!' that somebody is getting that we shouldn't be taking academic money and pouring it into a hole,” said Michael Slavin, president of the faculty union.

School officials termed the move a cost-cutting measure.

“As we examined our budget for the 2013-2014 fiscal year, it became clear that Cal U could not afford to continue paying for VenuWorks' professional services,” said university interim President Geraldine M. Jones.

VenuWorks officials defended the company's performance.

“It is incredibly difficult to book and secure events for all arenas in all markets in today's world,” said John Siehl, regional vice president for VenuWorks. “All facilities have their challenges. But again, we are very happy with our ability to book the events that we have at the Cal U Convocation Center and wish the university well as they move forward.”

Revenue generated by the center has fallen far short of initial projections.

Records obtained by the Tribune-Review in the spring showed the facility posted about $400,000 in losses from nearly 100 events held in its first 16 months.

But spokeswoman Christine Kindl said the success of events held at the convocation center is a separate issue from the university's decision to terminate its management contract.

She said the facility saw “a very robust summer of summer camps and had some conferences.”

Cal U said it expects to spend about $44,000 to terminate its contract with VenuWorks, which was just hired last year to oversee the 6,000-seat arena with two conference wings, school officials said.

The company will continue to manage daily operations until Nov. 11 and will stay on to manage administrative issues until Nov. 30.

Cal U pays VenuWorks a $10,416 base management fee per month for services, which includes three company employees based at the convocation center, Kindl said.

One of those employees, who handles audio-visual equipment, will move to the university's payroll, she said.

Kindl said ending the five-year contract will save the school about $300,000 for this fiscal year.

The school is not looking for another company to manage the center at this time, Kindl said.

“It's like anybody who's tightening a budget; there are things you'd like to have but can no longer afford,” Kindl said.

VenuWorks has brought performers including Kenny Rogers and Bob Dylan to the facility and will produce singer-songwriter John Fogerty's “Wrote a Song for Everyone” concert on Nov. 5.

Records showed only 1,935 tickets — less than a third of the center's capacity — were purchased for Rogers' April 2012 show, which cost about $131,000 and netted a $6,241 profit. Bob Dylan's April concert sold 2,438 tickets.

From the start, the convocation center was plagued by problems that continued after it opened its doors in December 2011.

One day after Armenti was fired, the State System of Higher Education, which oversees the 14 state-owned universities, issued an audit highly critical of the school's financial practices, many relating to the convocation center.

The audit cited cost overruns for the center of more than $6.2 million. It went further in pointing out the school's failed promise to raise $12 million before breaking ground.

To finish the project, the state system was forced to lend more than $15 million to the school, driving debt service for the facility from $1 million to $2.5 million for 25 years.

Kari Andren is a staff writer for Trib Total Media. She can be reached at 724-850-2856 or kandren@tribweb.com.

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