Ralston Arena Loses $4 Million in Year One

Interesting little tidbit from the 2012-2013 annual report for the city of Ralston:  in the first year of operation, the new Ralston Arena operated at a $4 million deficit.  The arena charged $3,370,607 for services in the first year, and received another $239,241 in “operating grants and contributions.”

Expenses in year one totaled $7,633,914.  That’s a revenue shortfall of $4,024,066 in year one.

One caveat on the results on the Ralston Arena.  Sales tax revenue from the new Menards store that opened last fall is intended to help pay for the new arena, but since the store didn’t operate in year one, those revenues weren’t available for 2012-13.  That changes in the current year, so the numbers should improve in year two.

That likely won’t solve all of the financial concerns, though. Ralston will get 70% of the sales tax revenue generated by Menards, and if the new store generates $40 million in sales, as is the average for Menards, that’s only about $2 million a year.  Unless operations improve significantly in Ralston, it looks like this new arena will be yet another money loser, much like the Mid-America Center in Council Bluffs.

And that, in turn, raises questions about the financial viability of UNO’s new Aksarben arena currently under construction. How will UNO’s arena be able to break even (or even turn a profit) when other arenas don’t?

I’m not privy to the numbers that justify the UNO arena, but I’ve long been a skeptic. And my skepticism continues to grow.  I don’t believe that the new UNO arena can be justified from a financial perspective.  Does UNO have some magic ability to succeed where others fail?  I doubt that.

Maybe from an athletic perspective, the new UNO arena makes sense. Maybe having a near-campus facility that’s connected with a practice facility is just what UNO’s hockey program needs to break through on the ice. The shuffling around town for practice and odd scheduling requirements imposed by sharing the CenturyLink Center with Creighton and other events may make a compelling case to build the arena.

Even though it’s likely going to cost more to build and operate than supporters want to acknowledge. And if you are building it without the expectation that the new arena is going to improve UNO’s fiances, the inevitable losses won’t be as big of an issue.