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Ontario's new arena: Will shorter drive and new entertainment offerings sell tickets?


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11:48 AM PDT on Monday, October 13, 2008

By VANESSA FRANKO and KIMBERLY PIERCEALL
The Press-Enterprise

It's built, but will people come?

Ontario's new $150 million Citizens Business Bank Arena opens Oct. 24 with a nationally televised Los Angeles Lakers preseason game.

The flashy new hall has booked musical acts Carrie Underwood and Metallica, and the new Ontario Reign minor league hockey team has 35 home dates scheduled through March 2009.

Still, despite the opening-night date with Kobe & Co., nothing in a private-public deal such as this is ever a slam dunk. With the sluggish Inland Southern California economy, timing could be less than ideal for a venue that counts on tapping into residents' fun money.

The region, too, has had a bumpy past with local governments building entertainment venues. Lake Elsinore's Diamond stadium drained the city's Redevelopment Agency and squeezed the city's general fund. And San Bernardino County's mammoth Glen Helen Pavilion, a.k.a. San Manuel Amphitheater, falls short of breaking even each year.

But city officials say Citizens Business Bank Arena is different. Unlike other venues, when Ontario's arena doors swing open, the city won't owe a dime on the facility.

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William Wilson Lewis III / The Press-Enterprise
The new 225,000-square-foot arena in Ontario cost $150 million and is paid for primarily with revenue from the sale of other property and city surplus funds.

"I think that whole deal has been put together, frankly, brilliantly," said John Husing, an Inland economist.

Tapping the Market

Ontario city officials look at the 225,000-square-foot arena as the financial puzzle piece that's been missing for years.

The city boasts an airport, convention center and high-profile retail centers. Now, Ontario's leaders are aiming to become the urban center of the Inland region.

The arena is expected to create about 30 full-time jobs and 400 part-time jobs through the various contractors that will be working there, including The Levy Group, which is managing restaurant operations.

The facility is the centerpiece of the Piemonte project, which opened a shopping area last year and could eventually include a hotel and condominium development above more stores.

While Piemonte's progress has slowed with the economy, development delays won't be unique to Ontario. Inland real estate consultant Mary Sullivan said the timing of the arena as well as Piemonte's delays could play to Ontario's favor. The economy didn't sour until the project had already been branded and pieces had been built, she said.

"There's a known entity out there now and there's some good buzz," she said.

The arena's business plan: tap into the Inland market -- that wide swath of people who have been forced to schlep to Los Angeles, Orange County and San Diego for years to see popular music, touring shows or pro sports.

"The area has been bereft of entertainment," Ontario City Manager Greg Devereaux said. "It's certainly a shame for fans or families to drive to Anaheim or Los Angeles."

Steve Eckerson, general manager for the arena through operator AEG Facilities, said his company plans to "wow" Inland fans and global performers with a great experience, from an intimate seating bowl for guests to a positive experience for the attractions working with the arena's production staff.

Arena officials believe they know what the Inland market wants:

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Steven Lewis / Special to The Press-Enterprise
A crew uses a mister to spread a thin layer of ice recently at the Ontario arena. The Reign hockey team will play 36 homes games there this season.

Music. Namely, mainstream country and rock. Officials say Metallica specifically wanted to play at the new arena.

Action. Hockey is already on the bill. Inland fans can expect pro wrestling and arena officials are looking into dirt-floor motorsports and rodeo as well. They are also studying developmental-league basketball and arena-league football.

Family fun. Touring shows such as "Sesame Street Live," the Harlem Globetrotters and "Playhouse Disney Live" are already booked.

Bargains. Concert tickets won't be markedly cheaper than surrounding venues in Los Angeles, Orange County and San Diego. But parking is included in the ticket price. The Ontario Reign has tickets as low as $10 for a weeknight game. And, amid surging gas prices, the shorter drive has its allure.

Officials and experts agree the 11,000-seat arena is big enough to lure major acts but, with fewer mega-tours to fill cavernous venues such as the 65,000-capacity Glen Helen Pavilion, it isn't too big.

"The conventional wisdom in the concert business right now is that there are going to be far more shows capable of selling anywhere from seven- to twelve-thousand tickets than there are going to be that can fill places like the Staples Center," said Gary Bongiovanni, editor of concert trade publication Pollstar.

Fans will return if they find a visit to the arena a pleasing experience, experts say. The key components: Freeway access, unobstructed views, convenient parking and top-tier entertainment. Officials believe they have all those bases covered, but that will be up to the customers to decide.

"I would challenge anybody to find a sports entertainment facility in California that has as much access and capability to handle traffic," Devereaux said.

The arena can be reached from Interstates 10 and 15 from multi-lane exits.

California Highway Patrol Officer Jeff Briggs said the CHP hasn't anticipated any major problems and the arena having multiple access points works in its favor.

However, he said it's difficult to tell what problems might be there until the arena starts holding events.

"An arena that cannot only attract the business, but service it well and deliver a great fan experience has a chance to really stand out," said David Carter, executive director of the USC Sports Business Institute.

Long Time Coming

Ontario approved a study for an arena in 1996. Later, pro football Hall of Famer Walter Payton contacted the city and wanted to bring an NFL franchise to property the city bought near Ontario International Airport in 1997. The football team never arrived but the idea for a sports arena stuck.

"I don't think you would have ever gotten something like this to be built waiting for private enterprise," economist Husing said.

Devereaux said that through land deals and revenue surpluses, the city has no bond bills to pay -- and he expects the city to recoup its investment in 10 to 15 years from arena revenue and surrounding development, including housing, stores and a 125,000 square-foot office building, a future hotel and eventually more homes, retail and office space.

Ontario's City Council unanimously approved funding for the arena and the project hasn't had any vocal opposition, Devereaux said.

AEG Facilities, which owns the Staples Center, was chosen to operate the arena because it can handle bookings and also bring in its own lineup of shows.

If AEG earns more than $650,000 annually, the city gets 75 percent of everything earned over that amount. No matter what, AEG will pay the city $1 million annually. Citizens Business Bank paid AEG to have its name attached to the arena for 10 years for an undisclosed sum. The funds will help pay for the cost of operating the arena, which is AEG's responsibility. Citizens Business Bank is based in Ontario with $6.5 billion in assets as of the second quarter of 2008.

Despite the bank's payments for naming rights that go toward operating costs, the Ontario arena was still bought and paid for entirely by the city.

"It is clearly a giveaway. It is clearly using taxpayer funds whether it's using bonds or cash," said Victor Matheson, a sports economics professor at the College of the Holy Cross in Worcester, Mass., co-author of a report on the lackluster economic impact professional sports arenas have on communities.

"You could use that $150 million in cash and land to improve your schools or pay for better firefighting or police stations," he said.

As for the guaranteed $1 million annual payment AEG must make to the city, Matheson said $150 million invested in a savings account at a local bank would net the city more, potentially three times more, annually.

"The only thing that doing it with cash rather than doing it with bonds does for you is it eliminates a certain amount of risk," he said.

Devereaux sees the arena as a necessary investment that will create ongoing revenue for the city by eventually being a lure for businesses and corporations wanting their office space and headquarters to be nearby.

"He may be a sports economist, but what we specialize in is government. And Ontario government for years invested and reinvested in the economic growth of the city and the area," he said in response to Matheson.

Inland Connection

Officials said they believe they're going to have to connect with the community to consistently fill the arena's seats. So their dance card is filling up.

There's a public open house on Oct. 18 for residents to sit in the padded seats and check out the views. Next up: The Fiesta De Comida benefit for the Ontario-Montclair YMCA on Nov. 5. And when high school sports playoffs come around, the arena will offer up a site for championship games.

Sue Oxarart, marketing director for the arena via AEG Facilities, said Levy Restaurant groups has a program that allows local service clubs and nonprofit organizations to staff a concession stand and receive a percentage of the profits for their groups.

The Ontario Reign hockey team shares the mission of connecting with the community, officials say. The team, an affiliate of the Los Angeles Kings in the National Hockey League and the Manchester Monarchs in the American Hockey League, is aiming to get people warmed up to the ice with outreach, promotions and affordable tickets.

"You have to make it affordable, you have to," said Dayna Cashion, director of public and community relations for the Reign. "We want it to be the place to go."

Upper-level tickets for Sunday through Thursday games cost $10 each. On Friday and Saturday, the price is $12.

"It can cost you less than going to a movie these days," Cashion said.

Justin Kemp, executive vice president of business operations for the team, said the Reign is partnering with community groups such as The Salvation Army, the USO and Loma Linda Children's Hospital to help raise funds for the groups.

Kemp said the response from the public so far has been very good. The goal was to sell 3,000 season tickets for the Reign's debut year, and it is close to being met, he said.

Mitch McCarley, of Riverside, plans on catching both hockey and concerts at the arena. But he's more impressed by what he won't be catching: Sig Alerts. "I think it's a huge advantage to not have to drive for an hour."

Reach Vanessa Franko at 951-368-9575 or vfranko@PE.com

Reach Kimberly Pierceall at 951-368-9552 or kpierceall@PE.com

HOW THEY PAID FOR IT

Unlike many cities that pay to build large venues, the city of Ontario won’t be forced to pay off debt for decades ahead. It’s paid for. Here’s how the arena was funded and built:

The city sold land next to Ontario International Airport and bought 202 acres across from the Ontario Mills shopping center for $28 million.

The city sold more than half of that land, clearing $34 million in profit. Those funds, $62 million in all, went toward paying for the arena and new roads.

A total of $12 million came from the city’s redevelopment department to build the parking lot and freeway sign.

The remainder, $76 million, came from the surplus that Ontario sets aside every year in a facilities fund.

Even with the amount used for the arena, the fund still has $35 million to rehab their police building and City Hall.

Sources: Ontario City Manager Greg Devereaux and Redevelopment Director Jim Strodtbeck

BEFORE THE ARENA: THE BIG O

Decades before the Citizens Bank Arena was built in Ontario, the land was home to another sporting venue, the Ontario Motor Speedway, pictured above during a race in 1970. Here's a quick history of that venue.

-The groundbreaking ceremony in 1968 featured a bulldozer race with Mario Andretti

-The first race was run in September 1970.

-The final race was run in November 1980. The raceway was torn down soon thereafter.

-The raceway was modeled after Indianapolis Motor Speedway. It hosted both Indy car and NASCAR stock-car events.

-It was built for $25.5 million and could fit 200,000 spectators. The site also hosted festivals and large-scale concerts, such as California Jam in 1974, which featured Deep Purple and Emerson Lake and Palmer.

-The property returned to the city of Ontario in 1998.

HAVE A LOOK

Residents can get a free sneak peek at the new arena on Community Day

When: 10 a.m.-6 p.m. Saturday

Where: Citizens Business Bank Arena, 4000 Ontario Center Parkway, Ontario

Admission: Free

Information: 909-484-2020

On the Web: www.cbbankarena.com

citizens business bank arena - ontario

A Press-Enterprise special report on the $150 million Citizens Business Bank Arena in Ontario.

Special Report: Ontario Arena

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