Suit Stages DeltaPlex Vs. Van Andel Arena

June 16, 2008
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GRAND RAPIDS — Douglas Van Essen, the attorney for plaintiff Delta-Turner LLC, said the next step is the discovery process, a period he felt should take at least six months to complete. But lawyers for the Convention and Arena Authority, the public body that operates Van Andel Arena and a co-defendant in a suit filed last week, believe the complaint will be dismissed before discovery can be completed.

Delta-Turner filed a seven-figure damages-seeking, multi-count lawsuit in U.S. District Court that accuses the CAA and SMG, the private firm contracted to oversee daily arena operations, of violating federal and state antitrust laws, the open-meetings act and the freedom-of-information act.

Delta-Turner, which owns the DeltaPlex Arena and Conference Center in Walker and is headed by Joel Langlois, has asked for a jury trial. U.S. District Judge Janet Neff has been assigned the case.

“Can (the arena) do whatever a private entity can do to compete and yet enjoy the privilege of not paying taxes?” said Van Essen of his client’s core essence of the lawsuit.

The complaint is based on a “preferred provider agreement” that SMG allegedly entered into with Cellar Door Productions of Michigan, a subsidiary of the world’s largest concert promoter, Live Nation.

The suit says the agreement calls for the arena to receive a third of the net event revenue that Live Nation collects from concerts it books at the DeltaPlex and three other venues in West Michigan. In turn, the contract calls for the arena to give Live Nation a third of the net event revenue it gets from concerts booked by other promoters.

“This one was done with the intent of diverting concerts over to Van Andel and away from those other venues, and we have evidence to support that was the purpose,” said Van Essen, a partner at Silver & Van Essen PC.

Van Essen said the agreement forces the DeltaPlex to pay more for concerts booked by Live Nation so the promoter can cover its revenue agreement with the arena. He said if Live Nation needed to clear $100,000 from a show held in the Walker venue, Delta-Turner would have to add $33,000 to its cost so Live Nation could meet the contract terms it has with the arena.

CAA Chairman Steve Heacock said the board’s attorneys, led by CAA counsel Dick Wendt of Dickinson Wright PLLC, have told him that the lawsuit is without merit and that he should expect a summary disposition of the complaint.

“They’re throwing huge numbers on the board they’re trying to get from the public coffer, which is absurd based on this theory that any concert of under 8,000 would go there instead of to the arena,” said Heacock of money the plaintiff is seeking.

Unlike Heacock, SMG Regional General Manager Rich MacKeigan deals directly with promoters who bring concerts to the arena.

“There has been litigation filed, and I’m not going to comment on any relationship, contractual or otherwise, that I’ve got with any of my promoters, especially given the fact that it is now subject to litigation,” he said.

“The Van Andel Arena is in a smaller market and a smaller venue compared to what is out there nationally. Any type of agreements that are entered into with promoters for a market our size would be at the behest of the promoter, in this case Live Nation,” he added.

Although Delta-Turner said the concert promoter is part of the agreement, the firm did not name Cellar Door or Live Nation as a defendant in the suit.

“We have not named Live Nation. They’re a conspirator that we’ve identified. They’re named but an un-included co-conspirator, at this point. We could have named them, but we didn’t,” said Van Essen.

The complaint cites the CAA as the owner of the arena. But in a strict legal sense, the CAA doesn’t own the arena. The Downtown Development Authority still does. The DDA is making the bond payments on the building and leased the management of the arena to the CAA when the authority was chartered by the state in 2000. In turn, the CAA continued the daily-operations agreement the DDA had with SMG. The CAA will take ownership of the arena after the DDA meets the 30-year bond obligation in 2024.

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