MARYLAND HEIGHTS — The Centene Community Ice Center was supposed to be a win for everyone.
The ºüÀêÊÓƵ Blues would have a state-of-the-art practice facility, among the best in the NHL. Youth and amateur ice sports athletes would have more options to hone their games. Maryland Heights would rake in $20 million a year, as one million people visited the rink annually.ÌýÂ
“It’s going to aid the development of our kids, the recreational activities for kids and adults, and also drive economic development,†Patrick Quinn, who chaired efforts to build the rink, said in 2019. “My hope is that the community will come out and celebrate a great display of a public-private partnership.â€
People are also reading…
It didn't take long for the bold predictions about the facility, which opened in 2019 off Interstate 70 and Highway 141, to fall flat.
And on March 19, the facility once again didn't have enough money to make a debt payment, as its revenues continued to fall short. The venue was short by about $223,300 for a March 15 bond payment — marking the second time in six months it didn't have enough money on hand for the biannual payment.
Maryland Heights this week committed to providing up to $625,000 to keep the venue afloat.
The center has been profitable the past two years but not enough to cover its debts, relying increasingly on taxpayers for help. Maryland Heights has now committed more than $2 million for backstop payments.Ìý
Meanwhile, the Blues and affiliated organizations have gotten a share of money from the facility — more than $500,000, according to documents the Post-Dispatch obtained in a public records request. The payments were largely for sales commissions and event fees.
What's clear from interviews and records is that rising costs, disappointing attendance and unanticipated expenses — as well as a failure to charge sales taxes — have driven the revenue problems.
Maryland Heights City Administrator Tracey Anderson pointed to the COVID-19 pandemic, saying it created an enormous early hurdle for the rink.Ìý
"I don't think that anybody over-promised anything," she said. "I think that they did the best job that they could. There's been bumps along the way. And I would also tell you that COVID played a huge role ... Nobody anticipated that."
Expensive upkeep
The venue was first pitched in late 2016, when an ice complex in Chesterfield was closing. Youth teams and the Blues, practicing at a now-defunct mall in north ºüÀêÊÓƵ County, could benefit from a new facility, boosters said.
The first proposed site was at Creve Coeur Lake Memorial Park, but the federal government rejected the plan because it didn't believe the rink would spur more outdoor recreation. Maryland Heights officials then stepped in and offered 25 acres near Hollywood Casino.
The city agreed to issue $55.5 million in bonds to help fund construction of the $83 million facility. ºüÀêÊÓƵ Legacy Ice Foundation, a nonprofit led by current and former Blues executives, put up over $15 million and would lease and operate the facility. Oak View Group, a global sports and entertainment company that Legacy hired, would manage day-to-day operations.
Revenues would go toward bond payments, which are to be paid through 2049.ÌýThe city agreed to provide backstop payments when revenues fell short.Ìý
The facility features four ice rinks, including an outdoor one that turns into a music venue in the summer, called the ºüÀêÊÓƵ Music Park.
A study commissioned by Legacy Ice had projected the facility would be profitable within its first year, with profits doubling by the second year to more than $3.2 million. By its third year of operation, the facility was projected to top one million visitors.
Then the pandemic hit. That hurt revenues and slowed momentum.
Financial records the Post-Dispatch obtained show the facility was profitable in 2022 and 2023.ÌýBut it has struggled with expenses, visitor figures that haven't met expectations and the inability to sell naming rights for the summer music venue.
At the end of 2023, the venue made $1.1 million in profit, with a little more than 452,000 visitors.
"It's just the day-to-day operating expenses of a facility that's nearly 300,000 square feet," said Jeremy Huelsing, the rink's general manager. "It's expensive to upkeep."
The facility hurt its own finances by failing to charge sales taxes for four years. Legacy Ice leaders, including current chair Dave Otto, have blamed confusion over whether taxes could be levied since the facility is publicly owned. The ice center finally began doing so this past fall.
The error cost the public $1.5 million and the rink more than $160,000.
Blues are 'dedicated tenant'
The venue has now missed eight bond payments.
The bond's trustee, BOK Financial, is allowed to take action in the event of a default, including seizing the facility. It's unclear what steps the trustee would take; as of Thursday afternoon, no action had been filed.
In a statement, the city said it is working with Legacy Ice to address the financial issues. The city may also consider providing money or other measures to avoid future defaults, according to the statement.
"The city of Maryland Heights and Legacy Ice Foundation have publicly expressed their dedication to achieving the desired profitability of the facility while maintaining its status as a premier destination for sports, entertainment, and the community," the statement read. "As discussions and collaborative efforts continue, all parties remain committed in finding a resolution."
The profit challenges are compounded by the payout hierarchy: Oak View Group and LiveNation, which books concerts for the facility, are to be paid first, followed by bondholders, and then an equal split between Legacy Ice and Maryland Heights.
Other than a payment for $38,000 when the facility first opened, Legacy Ice has not received any compensation.
The Blues and affiliates have received more than $500,000 from the facility, financial records show:
- The Blues were paid $341,000 for help with advertisers. The organization said the payments were for commissions, as sales reps secured facility sponsorship for the first three years of operations. The payments were contractual, according to the Blues.
- The ºüÀêÊÓƵ Blues Alumni Association received $66,000. The Blues organization said the payment was for a celebrity hockey game the alumni group helped produce for the 2020 NHL All-Star weekend: "The payment represented fees due the organization for their role and contributions to the event."
- ºüÀêÊÓƵ Blues Warrior Hockey, a nonprofit disabled veterans league, earned over $42,000 for manning concessions. "It is a common practice for non-profits to staff concessions at sports and entertainment events in exchange for payments to the organization," the Blues said in an email.
- An apparel company run by former Blues player Mike Zuke received more than $8,000 for youth hockey jerseys.
Also, Yellow Submarine Family Limited Partnership — a company incorporated by Legacy Ice's chair, Otto, and his wife — received more than $90,000 for providing an ice resurfacer, or "Zamboni."
Otto did not comment other than to generally explain why the organizations were paid.
In a written statement, Chris Zimmerman, president and CEO of the Blues, said the organization provides "ongoing support to the Centene Community Ice Center."
"The Blues are a dedicated tenant that is actively committed to attracting major hockey events that draw visitors and drive revenue for the ice center and region, while also promoting existing on-site programming for area residents," the statement said. "Our success in growing the game of hockey among all categories and abilities across ºüÀêÊÓƵ, at one of the highest rates in the country, would not be possible if the Centene Community Ice Center were not among the premier multi-sheet ice complexes in the country.â€Â
'We're doing our best'
Last summer, tensions came to a head among the city, Legacy Ice and Oak View Group.
An attorney for Maryland Heights sent a letter to Legacy Ice and Oak View Group questioning the organizations on how they planned to address the financial "shortcomings."
"The city' s concerns lie, as they must, with the proper use of public funds," according to the letter.
Oak View Group referred the city's questions to Legacy Ice. But it responded to one detail: "In regard to your comment on the center’s 'shortcomings,' we do wish to point out that we have exceeded the income targets in each of the approved budgets for the past two completed fiscal years," the Oak View Group letter read.
Anderson told the Post-Dispatch that the issues are in the past.
"In order for it to be a success, we all have to work together," she said. "You have to be able to address difficult conversations and try to find a solution. Cooler heads prevail."
The focus now is on luring more events, attracting more guests and boosting the venue's potential as an economic engine. Already, 20 concerts are booked for this summer.
"There's not a lot of facilities like this. We've certainly learned some things in those first four or five years," said Huelsing, the general manager. "We're doing our best to make sure that we're operating it as efficiently as possible."
Officials have touted back-to-back events earlier this month: the annual Blue Note Cup youth hockey tournament that had over 112 teams, and the American Collegiate Hockey Association games in which 74 teams competed over two weeks. The NCAA men's hockey regionals slated for March 29 and 31.
Marc Schreiber, president of the ºüÀêÊÓƵ Sports Commission, said the facility "opens the door" to new events his organization can vie for. In 2011, for example, the NCAA hockey regional was held at Enterprise Center, a venue that was too large for the attendance the event drew. But hosting it at the Centene Community Ice Center this year is a better fit and can provide visitors a better experience.
"It plays right into the growth of hockey in our community, and the growth of the women's game, especially," Schreiber said. "The facility provides a perfect match."
The mistake has hurt the center's ability to pay down its debt: More than $160,000 should have gone to the $55 million in bonds the city issued for the project.
The Centene Community Ice Center didn't make enough money for Maryland Heights to make an interest payment. The rink has struggled financially since it opened.
The Legacy Ice Foundation says it has already made gains toward a turnaround at the Centene Community Ice Center, with key upcoming hockey events.