COVID-19 Causes Cash Crunch at Casper Events Center
The coronavirus pandemic caused major losses at the Casper Events Center, which will require an unexpected added subsidy from the city, according to city officials and the agenda for the council's work session on Tuesday.
As the pandemic unfolded in March, a number of major acts postponed their concerts including Foreigner, Nelly, Cher and Blink 182, said Brad Murphy, general manager of Spectra, the manager of the Casper Events Center.
The city hired Spectra in the fall of 2016 to manage the events center in an effort to lower its annual subsidy of nearly $1 million. The city has believed the subsidy is worth it for the additional business that its events attract to the area.
In the contract with Spectra, the city agreed to pay Spectra $130,000 a year, and if the subsidy exceeded $994,000 during the second year of the contract, Spectra would refund up to half that. There were other incentives for Spectra to attract business and lower the subsidy.
However, Spectra's former manager mismanaged the finances and books, which resulted in more than a year of work to resolve, according to a memo from the new finance director Jessica Dixon, Murphy and the city's director of parks and recreation Tim Cortez.
Spectra has increased sponsorships, replaced the seats in the lower bowl of the arena to the relief of spectators, and created events and attracted major acts.
The Casper Events Center was requiring a subsidy of $865,000 this year, far lower than the $994,000 benchmark.
But COVID-19 upended all that.
Besides the cancellation of concerts and other events such as the College National Finals Rodeo, the losses led to Spectra furloughing many employees. Without the furloughs, this year's subsidy would have been $1.2 million.
As a result, the Casper Events Center will require the full $994,000 subsidy. Coupled with Spectra repaying $42,000 management fee, the venue will lose $1,037,000 this fiscal year.
Meanwhile, Spectra is working with a local business to buy the naming rights for the events center, which would generate a lot of revenue, Murphy said.
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