In the latest twist to salvage the hockey season for the Elmira Jackals, the ECHL team has been offered the chance to play the season rent-free in Elmira’s First Arena. The arena’s current owner, Southern Tier Economic Development Inc., or STED, and its future owner, Elm Arena LLC, made the offer to Elmira Downtown Arena LLC President Tamer Afr, of Michigan, at a Sept. 6 meeting in Rochester.
When Elm Arena and STED received no response, they sent the offer in a letter Sept. 10, STED President Kevin Keeley said Friday. “We want to settle this,” Elm Arena owner Tom Freeman, of Elmira, told this newspaper on Friday. “I have been long affiliated with the arena, and I want to see it work. Keeping the Jackals and professional hockey is very important.”
Elmira Downtown Arena, also known as EDA, used to operate the arena under its 1999 agreement with STED. In July, STED terminated that agreement and made a deal that would make Elm Arena the new owner. STED and Elm Arena disagree with EDA over whether the Jackals have a lease to play there for the upcoming season. The Jackals’ season is scheduled to start Oct. 12 at home.
Freeman said if he were a hockey team owner, he’d take the deal. Afr, who is also president of the Jackals, said the deal would give the Jackals the highest costs in the league while using one of the smallest buildings. “No team in the country has a worse deal,” Afr said Friday. Afr is the son of Mostafa Afr, who controls EDA and the Jackals.
Under the offer:
• The Jackals can use the arena for free for the 2012-13 season, including the playoffs, according to Freeman.
• Elm Arena would pay all utility and insurance bills, building maintenance and other costs of running the arena, Freeman said. Utility costs for the arena during the hockey season are about $350,000, he said.
• The Jackals would get to keep all of the money from ticket sales, the souvenir shop and game night promotions.
• Elm Arena would receive money from food and drink sales, suite tickets, advertising revenue and other income such as admission fees for the recreation rink.
Tamer Afr on Friday spelled out why the offer was not appealing from his perspective. He said the proposal would cost the Jackals about $25,000 per home game, or more than $1 million for the season. “The team would not receive any suite revenue or advertising revenue, which the arena would keep,” Afr said, adding that he had made a different offer to Freeman, who said he hadn’t yet received it.
Though neither Elm Arena, STED, EDA or the Jackals made any public statements about the terms of the offer before Friday, EDA attorney Ryan Heilman told U.S. Bankruptcy Court Judge Paul Warren during proceedings Wednesday in Rochester that the proposal wasn’t good enough. “The economics of the offer are not sufficient to run a hockey team,” Heilman said during a hearing about EDA’s Chapter 11 bankruptcy filing. Heilman also told the judge that the offer in the follow-up letter was $600,000 worse than the Sept. 6 offer, which would make hockey “impossible.”
“I don’t know where his math came from,” Freeman said Friday. “That didn’t make any sense to us.” Heilman declined to comment Friday. The rent-free offer came at a meeting in Rochester last week, as all sides tried to eliminate the uncertainty over whether there’s a deal that lets the Jackals play in the arena this season. That uncertainty was cited as a factor in the recent departure of Jackals head coach Pat Bingham, who led the team to the ECHL Eastern Conference championship last season.
Warren, the bankruptcy court judge, has repeatedly urged the parties to come to an agreement that would let the Jackals play. On Wednesday, he warned Heilman that he would likely dismiss the bankruptcy case on Sept. 27 if EDA didn’t show the U.S. Trustee’s Office proof of insurance on the arena.
If Warren dismisses the case, EDA will lose protections afforded by Chapter 11 bankruptcy, which lets companies reorganize to pay debts and automatically freezes court cases —including one in Chemung County Supreme Court that could have determined whether the Jackals had a deal.
Heilman brought insurance documents to court Wednesday, but a representative of the Trustee’s Office found them inadequate. “He wouldn’t have that insurance problem if he would have done this deal,” Freeman said Friday.