BEMIDJI — Bemidji’s Sanford Center has been under a new management company for nearly two years, and while a report earlier in the year showed a positive financial outlook for the city-owned building, ASM Global has reacted to a much higher operating loss than predicted.
The current financial projection for the building this year is a loss of $725,000, significantly higher than the $300,000 budgeted for the event venue’s annual deficit.
ASM Global vice president Leonard Bonacci told the council in their meeting on Monday, Dec. 18, that the Sanford Center’s general manager and financial director employment contracts were terminated earlier in the day.
"We own this. This is on us and we're not shaking off any responsibility. Our local ASM Global Team was providing projections for the year that did not turn out to materialize," said Bonacci.
Longtime Sanford Center staffer Bobby Anderson is the interim general manager for the building, with ASM Global's regional staff set to handle the building's financials in the interim.
"I'm disappointed to stand before you and report these numbers, but I want to be clear on the financials, it was nothing illegal or anything like that. This is a competency issue at the local level and we made decisions based on that information," added Bonacci.
New Bemidji City Manager Rich Spiczka wrote in a memo that this is an income statement loss, not a cash loss and that $150,000 is needed to cover the gap for the end of this year.
When ASM Global was first hired on by the city after the council made a 4-3 vote to terminate its managing contract with VenuWorks in 2022,ASM negotiators predicted to run the facility without a deficit within three years.
In a 2024 budget discussion for the venue, ASM Global staffers predicted a $300,000 operating loss.
How this year's $150,000 deficit will be funded is still under discussion, with Bonacci suggesting a possible solution with ASM Global refunding half of their management fee to the city, and reallocating some dollars from the building’s capital improvement fund and the company's marketing fund to cover the deficit.
"This way, all the dollars are reallocated. While certainly not optimal, we're not going back to the taxpayer and saying 'we need more money.' This is money that has always been looked at for the Sanford Center," said Bonacci.
The council will discuss approving the allocation from the capital fund in a meeting tentatively set for Friday, Dec. 22.
The Sanford Center's capital improvement plan for 2024-2028 was also discussed during the council meeting, with Sanford Center's interim director Bobby Anderson explaining that the building's deferred maintenance costs are stacking up; from $1 million in anticipated deferred maintenance a year to $1.5 million.
"Our convention center is a big piece of our business and where we have a lot of potential for growth, and so having the ability to stay current and new and not dated, I think is important," said Anderson.
