Arena contract leaves county clueless

Intrust Bank Arena is booking big acts and drawing big crowds, as it brings new, high-quality life to downtown Wichita. It's off to such a strong start that Wednesday's resignation of general manager Chris Presson, an employee of Philadelphia-based management firm SMG, needn't pose a problem.

And the contract Sedgwick County signed with SMG three years ago seemed like a great idea at the time, especially the part about protecting the county from any financial losses for five years.

But with hindsight, and with the Intrust Bank Arena open three months and generating revenue, it's more clear all the time that county leaders gave away too much oversight authority to SMG, leaving citizens in the strange and frustrating position of having too little hard information about how their $206 million investment is doing.

The first clue about how clueless the public was going to be came last year, with the blackout on information about SMG's lease deal with arena tenant Wichita Thunder.

The secrecy also overlays the question of whether the 5A and 6A state high school wrestling tournament will return to the arena for 2011 and beyond. Arena officials have said the gross ticket sales were $50,500 for the February tourney, but won't say how much profit the arena made — indicative of the dramatic reduction in transparency since the county-owned Coliseum hosted the event last year.

Assistant County Manager Ron Holt viewed SMG's full financial reports for January and February at the arena, but was not allowed to make copies or even take notes. Though Holt was able to tell county commissioners that the arena saw $321,000 in net income for those months, contract language calling for SMG to give the county monthly written reports, each including a balance sheet and income statement, is being disregarded, apparently by mutual agreement. Instead, the county and public so far are only privy to gross ticket sales per event and to income figures for broad categories of events.

The contract also calls for a complicated formula of when SMG profits and when the county does. But with all the information, SMG also has all the power in this public-private partnership.

County Commissioners Kelly Parks and Gwen Welshimer raised some concerns when they voted against the contract in 2007.

"If citizens have problems or a group wants to use the arena," Parks said then, "SMG has the final answer, and they don't have any appeals to elected officials."

At the minimum, the county needs to demand that SMG and Presson's successor provide the monthly financial reports dictated in the contract. Unfortunately, some other remedies may have to wait until the contract with SMG runs out after 2015.

As it is, the current contract is a case of having to trust, with little ability to verify.