Programming, planning and promotional tricks that help heat up ice arena profits
By Stacy St. Clair
The mission was simple.
The Hoffman Estates, Ill., Park District wanted a state-of-the-art ice arena. The solution, however, wasn't easy. Nor was it cheap.
State law prevented the district from significantly raising taxes to pay for the project without voter permission. An anemic economy made it difficult to find support for a facility fully funded by taxpayers.
But rather than give up on their dream, Hoffman Estates park officials got creative.
The district formed a unique partnership with a local professional hockey club. The two parties inked a potentially lucrative deal to build a $14 million facility. The innovative move gave the park district an opportunity to build its dream facility without having to compromise on programming or design.
"They were looking for a partner, and we thought it was a great opportunity for us," says Sue Olafson, the district's communications director. "It was a great way to provide programs we wouldn't have been able to provide otherwise."
Welcome to the modern ice age, where it's not enough to freeze some water atop a concrete slap. Today's rinks have to be innovative with their programming, marketing and revenue streams in order to produce a profit.
Ice rinks, likes most recreation facilities, are big business these days. They need to be run with an acute business sense, while still understanding the demands of the athletes they serve.
Few facilities embrace this idea better than the Hoffman Estates Park District, which decided to attach an ice arena onto its Blackhawk Community Center. The building is intended to serve suburban Chicago's burgeoning ice-sport population. Once finished, it will transform the existing 35,000-square-foot structure into a 103,000-square-foot premiere ice facility.
The reaction has been overwhelming so far. Though the rink is not set to open for another six months, the ice time is already completely booked.
"There has been tremendous demand for ice time from many different ice organizations," says Dean Bostrom, district executive director. "Ice-time demand has far exceeded our initial budget projections and marketing plans."
The programming success—the entire project, really—could not have happened without the agreement between the taxing body and the professional hockey club.
The lucrative deal called for the district to borrow $12 million for the project, with the debt being paid back through arena revenues. The Chicago Wolves—the wildly popular AHL team that plays to packed arenas in a nearby suburb—also will contribute $4.5 million over the next 15 years. The team's contribution will be earmarked for improvements to the community center, the building to which the arena will be attached. Park officials say it will give the district enough money to build the village's only senior center, as well as a game room, teen center and more community rooms.
In exchange, the Wolves will receive both premium and exclusive practice times. The team will have 8,500 square feet in office and locker room space. They'll control the main sheet in two-hour blocks between 9 a.m. to 1 p.m. from August to June. Park officials estimate the Wolves will monopolize only 1 percent of the facility's available ice time.
The district, however, intends to capitalize on whatever time it has with the Wolves. The team's practices will be open to the public, giving the facility a chance to attract new patrons. It also will have the bragging rights—an extremely valuable marketing tool in the world of ice sports—to being home to a professional club.
The Wolves have agreed to hold youth hockey clinics each summer as well. The camps will create another way to attract new patrons and dollars to the facility. It also will help to expand the team's fan base.
"It's a win-win situation for both of us," Olafson says.
Industry experts encourage facilities to seek celebrity customers because of the implied endorsement that accompanies such partnerships. They can result not only in new patrons, but more dollars spent at the pro shop and concession stands by fans who just come to the facility to watch the superstars.
The Ice House in Hackensack, N.J., for example, was swamped with calls after patron Sarah Hughes won the 2002 Olympic gold in Salt Lake City. The callers—most of whom were beginner skaters—knew what the facility did for Hughes' career. The teen's biographical clip during the Winter Games talked about how she drove three hours each day just to train on the arena's perfect ice and benefit from its flexible ice time.
With figure skating offered at more than 1,200 rinks nationwide—up 29 percent since the last Olympiad—arenas are finding it increasingly difficult to set themselves apart. One of the easiest, and increasingly popular, ways is to attract star power. Nabbing an A-list coach, skater or hockey team can draw athletes quicker than discounted ice fees or flexible skate hours.
Ice House, for example, has lured enough elite skaters since it opened six years ago to now be considered one of the top facilities in the world. The center produced nine Olympians in 2002, three of whom won gold medals. Rinkmates Elena Berezhnaya and Anton Sikharulidze, the Russian pair who captured the controversial pairs gold, joined Hughes in the Olympic pantheon that year.
In interviews about the facility, the champions praised the ice quality and credited the center's four NHL-size rinks with eliminating competition with the general public for ice time or space. Such advertising, experts say, could mean tens of thousands of dollars to a facility.
Hoffman Estates' deal with the Wolves takes the celebrity endorsement one step further. The partnership will not only provide patrons, it will help the community build its dream facility.
The center will include two NHL-size hockey rinks, accommodating 700 spectators in the main rink and 300 in the smaller one. It also will have the obligatory pro shop and concession area.
"Having that additional money [from the Wolves] made this project possible," says Kate Ditchman, project architect. "It's not open yet, but the ice is just in tremendous demand."
The district, however, is not content to just pack its schedule. It wants to create programming options that continuously attract new customers and excite old ones. To that end, it will install a video wall, professional lighting and a high-grade sound system in its main rink.
The equipment will create a disco-esque feel during the public skate sessions. Industry experts encourage such design because the vibrant, lively atmosphere sets the facility apart from the gray, warehouse-like rinks.
"It's a huge thing right now that other people cannot do," Olafson says. "Most people want to do it, but they can't. We can."
The district also plans to use its fitness center as a marketing tool. The gym will overlook the rinks, giving patrons a chance to watch the ice activities while on the treadmill or climber. Industry experts long have encouraged such a design because it gives parents something to do during their children's practices.
Many experts also believe fitness centers with rink views encourage new patrons because they spotlight the aerobic benefits of hockey and ice skating. As patrons sweat it out in the gym, they may decide to try an ice sport.
At the very least, the view sets the gym apart from most facilities.
"When you're in the fitness center, you can see everything," Ditchman says. "It'll be pretty neat."
Like any recreation project involving construction, however, the project has had detractors. Nearby residents have objected to the plans because it eliminates an adjacent park and brings the facility within 30 feet of residential property lines. Opponents argue it will destroy the neighborhood and harm their property values.
Projected revenues—thanks in large part to the Wolves' presence—allowed the park district to spend extra money to address the neighbors' concerns. They willingly upped the price tag by $1.6 million to move the arena ice chillers away from homes, add facility fencing and sink the rink.
"Ice-time demand has far exceeded our initial budget projections and marketing plans," Bostrom says. "These projected revenues enabled us to remain a good neighbor by allowing us to meet the sight, sound, security and public-safety concerns of our community since construction costs have exceeded our initial budget."
The park district also worked to make sure the neighbors realized the facility's potential monetary impact. At every step along the way, the park district has educated the community of the facility's value, constantly reminding the public of the potential financial boon in the town's midst.
In addition to the team's multimillion dollar contribution, the district is expected to pocket at least $352,546 a year from the rink after debts and expenses are calculated. That will mean roughly an extra $6 million over the next 20 years.
The local economy—hotels and restaurants, in particular—is expected to glean $1 million each year, according to the local convention and visitor's bureau. The money will come from overnight visits and meals prompted by the four youth hockey tournaments scheduled at the facility each year.
The facility is expected to serve a 20-mile radius, attracting otherwise unlikely visitors to Hoffman Estates. To the delight of local officials, many of those patrons are people who would not be spending money in town if not for the ice rink.
"This," Bostrom says, "is going to be a first-rate facility that will offer something for the entire community."
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