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San Juan Coliseum Almost Ready


July 17, 2004
Copyright © 2004 Information Access Company. All rights reserved.

SAN JUAN, Puerto Rico-- The opening of Puerto Rico's largest indoor arena, the Jose Miguel Agrelot Coliseum, is expected to pump millions of dollars into the local economy and give a much-needed boost to its ailing entertainment industry.

But since work on the project began more than five years ago, it has been beset by construction delays and spiraling costs that surpass $300 million.

Moreover, proposed legislation regarding who should manage the venue has been delayed in the Puerto Rican legislature.

In the meantime, Philadelphia-based facility management company SMG continues to handle the coliseum, set to open in September.

Originally, the venue--which has a maximum capacity of 18,500 seats--was supposed to have opened more than two years ago, but a change in construction firms put the project on hold for months. It also nixed plans to have the Rolling Stones inaugurate the state-of-the-art multiplex, which will house concert and sporting events.

The opening was rescheduled for this past April, but new construction delays and snags in obtaining the required municipal permits again pushed the project back.

Nonetheless, in June the venue's managing officials assured it will welcome its first visitors in September, six years after construction first started under former governor Pedro Rossello's administration.

"At this moment, the construction work is over 99% complete, so if everything runs smoothly and as projected, we should be holding our first big event in late August or early September," SMG marketing director Jochi Davila says.

According to Davila, the arena will require 50 full-time positions, plus a number of hirings per event.

"This will represent approximately $5 million in direct and indirect jobs that the structure will generate to the local economy," Davila says.

The Commonwealth of Puerto Rico owns the coliseum. SMG has a contract with the commonwealth's Government Development Bank to run the facility for $300,000 per year for three years, with an option to renew for two more years.

But this could change by 2005. A group of local producers led by Angelo Medina, Ricky Martin's former manager, is pushing for leg islation to curb SMG's managing powers over the structure.

The team has raised worries that SMG's total control of the arena will allow the company to block local producers in favor of mega-production firms like Clear Channel Entertainment that already have a longstanding business relationship with the company.

The legislation aims to form a board of directors comprising professionals who are experts in the management of large arenas. But it also establishes that government officials will appoint the corporation members.

"We are all for fair competition in the concert producing business, but the key word here is 'fair,'" says Medina, who is one of the island's top event producers.

"SMG's contract has all it takes to create a monopoly. And that's why we have joined forces to create a fair environment for everyone."

The proposed legislation is awaiting ratification from the Puerto Rico Legislature, which reconvenes in 2005. This year's session ended June 30.

So far, high-ranking SMG officials like Davila have stated that the company will only manage the arena and not produce concerts.

State-of-the-Art Venue

The plan to build the new coliseum was proposed by the Rossello administration in 1996. Government officials intended to make the island more attractive to the International Olympic Committee, which at the time was considering Puerto Rico as a possible site to host the 2004 Olympic Games.

The IOC passed on the island as a host, but the administration decided to go ahead with the project.

Davila says the structure has no real competition in terms of its appeal to bring more business to the island. None of the five major concert venues in the San Juan metropolitan area (including coliseums, stadiums and amphitheaters) has an indoor capacity of more than 10,000 seats. The seating capacity and the cutting-edge facilities not only make Puerto Rico a more appealing destination for stars but also make major events more feasible for concert producers.

"Thousands of professional U.S. athletes and music stars would give anything to play or perform in this new structure," says SMG GM Bob Rice, noting the blend of amenities and luxury.

The structure--which complies with pro basketball and National Hockey League standards--boasts a series of amenities and modern facilities not found in other island venues. It showcases a heliport, 14 ticket windows and a 3,500- to 7,000-seat intimate theater setting.

Among its many other features are a catwalk steel structure hung from its ceiling to provide easy connection of lighting equipment, a state-of-the-art sound system, two gigantic scoreboards with message center, 22 corporate suites, four party suites, one VIP club lounge, a press room, two meeting rooms, five locker rooms, four dressing rooms and 150 TV monitors as well as 34 restrooms.

In addition, the coliseum can be transformed in six hours from an ice skating rink to a concert hall. Or the concert setting can quickly be converted to a basketball setting with a 16,500-seat capacity.

With construction nearly over, the coliseum faces costs of up to $1 million per month in interest on the line of credit alone, based on the debt's 30-year financing with a 5.5% variable interest rate. But the government's projection is that operational costs can be met with what the coliseum generates.

"SMG is forecasting 80-plus events per year that will surely boost the economy," Davila says.

Davila adds that some of the big-name artists who are tentatively lined up to perform this year at the facility are Marc Anthony, Enrique Iglesias, Ricky Martin and Robi "Draco" Rosa.

According to Davila, the construction of the building, with all of the required permits, is projected to finish this month.

In August, after the building is handed over to SMG, the company will host soft opening events to test the facility's equipment and will confirm who will be the big music star--or stars--to perform on opening night. And then in September it plans to open its doors to the public.

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