Rampage CAA Amend Arena Lease

June 27, 2003
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GRAND RAPIDS — DP Fox Football Holdings LLC, owner of the Grand Rapids Rampage, will likely pay more to play its Arena Football League games at Van Andel Arena next season.

The company recently negotiated an amendment to its current five-year lease with the Convention and Arena Authority, which has four more years to run. Board members ratified the new agreement last week, which bases rental payment on attendance.

"The lease needed to be amended because there was specific language in it about the timing of the season and when the scheduling took place. We needed to clean up that language to reflect the current scheduling rules of the league," said Scott Gorsline, COO of DP Fox Ventures, parent firm of the Rampage.

"We did come together in good faith and worked together to get through it. I think we came up with a resolution that everyone was, maybe not happy with, but satisfied with. Each side had a valid position," he added.

The highlight of the new pact is that the Rampage will pay an additional $10,000 in rent for each home game it plays on Fridays, Saturdays and Sundays in February and March, but only when attendance tops the 8,000 mark. The franchise currently pays about $8,200 to rent the arena for each home game.

Because the AFL season was changed when the league signed an exclusive television deal with NBC, the CAA felt a change in the lease was necessary. In the club's first five seasons, the franchise played most of its games from May through August, largely a slow period for traffic at the arena. But the last season ran from February through May, a period when the arena has has a stronger demand for dates. More demand lowers supply and raises prices, and that is what happened here.

"Games are being held when the arena is more active," said Dick Wendt, legal counsel for the CAA. "They benefit from increased attendance. We benefit from increased reward."

The CAA will also get 20 percent of the Rampage's share of concession revenue when attendance exceeds 8,000. Under 8,000, the CAA gets nothing. Before the amendment, the Rampage split concession revenue with arena vendors and the CAA never had a piece of it. The CAA will also get 20 percent of the revenue the Rampage receives from catering, but only when attendance tops 8,000.

"Both of those are pretty nominal sums," said Wendt.

If the changes had been in place this past season, Wendt said the CAA would have earned about another $33,000 from the Rampage above what it did.

Finally, the Rampage agreed to split any league-mandated upgrades to the arena field with the CAA. Under the previous lease, the CAA was on the line to pick up the entire tab. And the Rampage will be fully responsible to pay for any upgrades to the field required by NBC.

Board members were concerned that the change in seasons would lessen revenue to the arena. They feared that Rampage game dates would block out concerts, which are more lucrative to the arena than any other event it holds.

But that doesn't appear to be the case this year, as the arena is heading toward a $1.5 million surplus for the fiscal year before capital replacement costs are removed.

"We're expecting to exceed budget by about $350,000," said Steven Heacock, chairman of the CAA Finance Committee.

SMG projected a budget surplus of $1.24 million for FY03, which ends on June 30.

According to the AFL, the Rampage drew 77,398 paying customers to its eight home games at the arena this past season. In February and March, the months covered in the new lease, the franchise had three sellouts.

"We had five sellouts, out of the eight games," said Gorsline.

For the CAA, the franchise is seen as more than an income stream.

"The Rampage brings us additional value than what it brings us in revenue. They help us market the community," said Heacock.

SMG general manager Rich MacKeigan said he thought the club provides more benefit to the convention center than the arena. Through the NBC regional telecasts, he said viewers learn more about the city and some may be induced to come here. Wendt added that the team also draws customers to downtown bars and restaurants.

The new agreement takes effect next February when the Rampage opens its season. But it could become effective in January if the franchise plays a preseason home game — something the club did before the league's scheduling change. The Rampage holds two more five-year lease options at the arena.  

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