Apr 30, 2012

Doomed For Failure

The Allentown Hockey Arena is doomed to fail. With only 40 home games, 325 nights is too many to fill. The Sands Casino has already sucked the air of the local concert market, with one name act after another being announced. The Sands can well afford to use their concert venue as a lost leader for their casino. Ironically, while the price tag for Allentown's white elephant is now $220million, the Sands Concert space only cost $12million. While wide eyed Pawlowski and the profiting minions envision a hotel, no minor league hockey fan has ever stayed in a hotel. I have coined the phrase Hockeygate for this misstep in Allentown redevelopment. While the main victim of this fiasco will be the taxpayers of Allentown, other victims and scapegoats will be sacrificed. I would imagine that Scott Fainor, CEO of the main lending bank, KNBT, has been having some sleepless nights. Assuming the minions get pass the lawsuits, the bonds will be a hard sell, requiring that higher interest be returned to the risk takers. After about five years of underperforming, the city will announce a new manager for the arena. Ten years after that, a new mayor will suggest it's demolition. I recall when the canopy was supposed to save downtown Allentown; We know how that turned out. This post adds a few thoughts to my former post, Pawlowski's Expensive Hole.
photo credit:The Morning Call/Harry Fisher

9 comments:

Anonymous said...

Still, NOBODY will risk their OWN money on this mess.
The big nerve investors have no problem spending tax payers cash.
This nightmare is alreadyA huge expense to the state, local residents, neighboring residents, and who else?

Canary_In_Coalmine said...

MM

Do you know if the City guaranteed the bank's loan? If so, the CEO can rest easy, but Allentown may be broke.

Anonymous said...

Fainor - Now I understand! Same old, same old. Perhaps the proverbial dog will finally have it's day.

ironpigpen said...

With all due respect, Mr. Molovinsky, each American Hockey League team only played 38 home games this season.

I have to imagine that, when you are running off and claiming your magnificent $ 160.0 million dollar Palace of Sport will draw "2.5 million people annually", two lost home dates hurt.

Especially considering the fact that the Brooks Brothers' Phantoms have missed the AHL playoffs all three years in Glens Falls, New York, now.

Post-season hockey (i.e., extra home dates) is not something the Phantoms have been known for in recent seasons --- the Phantoms have missed the playoffs in five of the last seven years and advanced past the first round just once.

monkey momma said...

The figure is no longer $160, IPP. It's up to $220 according to the last time I read the Morning Call on this issue.

I also want to know the answer to Canary's question - who's the guarantor on this loan from KNBT? How much is the loan? When I add up all the numbers, it comes to $65 million already spent, but that's just using info I got here and from the paper.

If the doomsday scenario happens, I would imagine Butz would have to sue for costs arleady incurred, such as materials already ordered. SUCKS!

michael molovinsky said...

i prefer not to comment on my blog, much less answer questions, but, in reply to some recent ones.

on the park director post; yes i did hear where he is supposedly going, but i'm already out on a limb with my post, so i prefer not to climb out further.

as for loan responsibility. supposedly reilly and butz are responsible for the private loans. i say supposedly because it's apparent to me that the rules are being made up as they go, and reilly and butz probably used an LLC to receive the funds.

michael molovinsky said...

as for the public portion, $45 million or so, in the eventuality the bonds are not sold, allentown taxpayers would absorb the debt service.

Anonymous said...

There is an interesting fact concerning concerts at the proposed Allentown Arena that has been overlooked by the general public but is painfully apparent to the administration!

Due to its geographic proximity to the Sands Event Center, no artist under contract with Livenation can be booked at the Allentown Arena. That relegates this venue to attracting less than desirable acts and further hampers filling the seats!

JT is a smart business man and knows this!

Anonymous said...

This comment is a couple years later then the rest. At this point The Lehigh Valley Steelhawks will play there too. That adds another set of games there. To spite the Sands which I never went too and never will go to they actuelly have some concerts lined up. Also the big Christian Rock tours which do sell out will never go to the sands and the ppl center makes a good place for them.