York City Ice Arena: 'Problems from day one'

Nearly two decades after the creation of a new ice arena in York City fell short of expectations, city taxpayers are still shouldering the financial burden — and will be through 2027.

Two of the most ardent supporters of that new arena are now in charge of it with the hope of revitalizing their original vision.

That vision — pitched at the start of the new millennium by York City's then-economic development director Eric Menzer and the York City Recreation Corp. — convinced city leaders to guarantee a $7.3 million bond in 2001 to build the two-rink facility.

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The corporation was handed control of the facility with the plan for it to pay off the bond with profits from the facility, but within two years, it had lost more than $525,000 and defaulted, forcing the city to take over.

City costs: Michael O'Rourke, the city's business administrator at the time, was against the idea from the start and recalled that there were "problems from day one," he said.

"(The corporation was) going to sell ads, have a restaurant, a liquor license, sell naming rights," O'Rourke said. "They did nothing ... and suddenly the city owed an unanticipated $600,000 from our general fund."

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He recalled that multiple conversations were held about selling the facility, but the decision was made to keep it because the sale price likely would have been for less than they still owed.

The city has been paying more than $600,000 per year — including interest — toward that bond since 2003, with initial plans to have it paid off by 2021. But last year, the city council voted to refinance that bond with a separate 2011 bond, extending the expected date of payoff to 2027.

Menzer, who describes himself as the lead person within the city who pushed for the arena, said, "There's no getting around the fact that the original business proposition ... didn't work."

Mark Skehan, a member of the York City Recreation Corp., said the financial struggles were a result of trying to do too much right from the start.

Menzer added that it's important to note the city was already in "the rink business" before guaranteeing that 2001 bond. The city's old facility was breaking down, and officials were faced with a difficult decision, he recalled.

"Hindsight is 20/20, but I don't know if I would've done anything differently," he said. "We could've built a smaller rink or put money in to fix the old rink, but there's no way to know how those situations would've worked out."

Revs: Shortly after taking control of the arena, the city hired Rink Management Services (RMS) to manage the facility.

The company, which maintains ice and related equipment at 28 ice rinks, produced more than $1.25 million in operating profits from 2004-2013, according to its proposal to keep its city contract in 2014.

Management of the arena was instead contracted in 2014 to the York Revolution, whose president is Menzer.

The arena produced nearly $90,000 in profit during the first few months under Revolution management, but it has since lost about $130,000 from 2015 through September 2017, according to income statements submitted to the city.

Menzer attributes the losses to a couple of factors: the continued discovery of deferred maintenance issues and a decline in popularity for public skating sessions.

He said he hopes to capitalize on 2018 as a Winter Olympics year to attract more youth skaters and pointed to the contract the city signed with the Skipjacks Hockey Club in 2016 as a major potential revenue generator for the future.

The Skipjacks' contract allowed the club to pay for capital improvements to the arena — including a new locker room — with an agreement to grant the club credits for ice time based on the costs of those improvements.

The club spent more than $250,000 on improvements, according to the contractor agreement, meaning they will be allowed to use enough ice time to equal more than $250,000 without paying.

The Skipjacks contracted on those improvements with Lefever Electric, whose president is Rick Lefever. Lefever also serves as president of York Ice Hockey Club, another primary user of the arena.

Menzer said his understanding is that the Skipjacks got a good deal on the construction because of that relationship.

Under the contract, the Skipjacks are currently paying rent — $27,000 in 2018 and increasing yearly — for the facility.

Menzer also pointed out that once the credits for ice time run out — which he said should be within the next couple of years — the contract will generate about $50,000 more per year.

New GM: Menzer said he was also excited about the direction of the arena under its new general manager.

The Revs hired Skehan, a longtime friend and neighbor of Menzer, in November after firing longtime general manager Mike Cleveland in August.

Skehan, the retired former owner of Dressel Welding Supply, has been involved with the York Ice Hockey Club as a volunteer for about 35 years, he said.

Menzer said he interviewed numerous other candidates, but he went with Skehan, in part, because he had the support of the York Ice Hockey and Skipjacks clubs.

Skehan said he took the job with plans to fulfill the vision he and his fellow corporation members pitched back when the arena was built — "creating the best ice sports facility in Pennsylvania."

Skehan said that includes immediately increasing the arena's customer base and improving the physical facility.

The Revs' management contract is up in September — with a four-year renewal option — and Menzer said they're ready to continue running the facility if the city will have them.

— Reach David Weissman at dweissman@yorkdispatch.com or on Twitter at @DispatchDavid.