Reluctant and bad news

Hi folks,

I've been putting this post off for a few days because I do it with much reluctance and a heavy heart. I'm not sure how to say this gently, so I'll just say it -- I'm shutting down The Pressbox Powertrip.

I've thought long and hard about this decision, and while I love doing this blog, the time I put into it is starting to negatively affect my performance of my other, paying pursuits. I have commitments to other publications -- ones that pay me and allow me to pay my rent -- and this blog is starting to prevent me from adequately fulfilling those commitments.

It was my hope this this blog could become a revenue-producing venture, but it hasn't, and at this point I just don't have the time it would take to aggressively and adequately pursue that goal.

I'm leaving the blog up until the end of next week so people can read this post, and them I'm going to delete the blog. So, unless something happens over the next nine days that would help this blog become a money-maker, I'm afraid this will be the end of the Powertrip.

Like I said, I do this with a heavy heart. I have enjoyed running this blog, and I remain extremely grateful for all of my readers and all of the people who have posted comments and e-mailed or called me with tips and information. Thank you all for your support and readership.

I want to extend a special thank-you to my friend and mentor Bruno Sniders, whose support and assistance has been absolutely crucial to the success of this blog.

So, I suppose, I must say farewell. Thank you all again.

PAETEC almost DID drop naming rights

A source tells me that, for what it's worth, PAETEC Communications WAS actually considering withdrawing from its naming-rights agreement for the soccer stadium during the height of the Rhinos' recent financial crisis.

The company even took steps to notify the team that it was preparing to drop its name from the stadium. That could explain why the company's PR rep was a little surly with me when I talked to him a few weeks ago.

Rhinos: Slow start won't affect attendance

Will the Rhinos' winless, and scoreless, start to the season hurt the team in the stands when the home opener comes around this Saturday?

The team's front office doesn't think so.

"I don't think it will affect the opener," team VP Sam Fantauzzo told me this morning. "I think a lot of our fans understand that this team was put together late. Other teams had several games under their belts before we even started training camp."

Fantauzzo said ticket sales "are through the roof right now. It's fantastic." He said the team has sold roughly 4,000 season tickets so far.

He also said the team's 0-3-1 start hasn't scared away sponsors and advertisers.

"Advertising and sponsors are amazing," he said. "The phone is ringing off the hook here. We're feeling the buzz that's going around town. The whole town is buzzing."

Management is now focused on the home opener this Saturday against Charleston, an event that will include a concert by American Idol star Bo Bice.

"Bo Bice is bigger than we ever thought he would be," Fantauzzo said. "This guy is huge. It's amazing how many people are into him."

Fantauzzo also said the team is excited about its new broadcasting agreement with Clear Channel, which gives the Rhinos exposure on several local stations. For example, he said, Bice will appear on multiple channels this week leading up to the game and concert Saturday.

"(Clear Channel's) affiliation is amazing," Fantauzzo said. "We'll be doing a lot with them."

Donner and the Walk of Fame?

I've been meaning to get your thoughts about Bob Matthews' column last week in which he argued for Steve Donner receiving a spot in the Frontier Walk of Fame.

Bob's arguments are very good ones, and certainly very legitimate. Donner has indeed done a lot for the Rochester sports scene over the years. But does all the recent nastiness overshadow all that?

A trio of tax warrants

On Friday, the state Department of Taxation and Finance issued a trio of tax warrants totaling nearly $72,000 in unpaid taxes against current and former Rochester Sports Group companies.

Empire Professional Soccer LLC — the company DDE used to operate the Rhinos team — got whacked the hardest, with a warrant for $40,036.75.

Rochester Amerks Inc. owes $31,787.71.

Last but not least, Rochester Rhinos Stadium LLC — the company that supposedly was used to own and build PAETEC Park (but which, as we've found, might have been a mere shell corporation) — owes a measly $105.68. (Why even bother with an amount that small?)

These three new warrants are in addition to several other ones issued to various RSG teams over the last year or so.

Perhaps the question to ask now is whether the government — by virtue of being, you know, the government — jumps to the head of the line when it comes to unpaid RSG creditors lining up.

Local company in discussions to run arena

According to a very dependable source, the city of Rochester has had discussions with a local entertainment company about operating Blue Cross Arena.

The city's contract with the company that currently runs the arena, Philadelphia-based SMG, expires next month, as does the Amerks' and Knighthawks' lease at BCA. The city is paying a New Jersey-based consulting firm, Stafford Sports, $50,000 to help the city with both deals — the teams' lease and the arena-management contract.

While much of the media's focus has been on the squabbles between the city and Steve Donner over the teams' lease, the question of who will manage the arena has largely been ignored.

Which is too bad, because the teams' lease will actually be with whomever lands the BCA management contract, NOT the city (unless, of course, the city decides to run the arena itself, which is about as likely as "American Idol" producing a winner with actual talent).

It's been rumored for a while that the city had soured on SMG and was actively looking for a new management firm. (That might be why the arena's current manager, Jeff Calkins of SMG, hasn't returned phone calls for, like, three months.)

Now we know that's true, according to my source. However, the source wouldn't name the local company that's been in discussions with the city, other than to say that it was an "entertainment" company. Oooh, wouldn't it be just JUICY if Jim LeBeau ended up running Blue Cross Arena?

Official: City always owned stadium

Sorry it's taken me a couple days to write a follow-up to my Thursday post about PAETEC Park. Thank you, by the way, for all your comments and all your thoughts. Keep them coming. This is your blog as much as it is mine.

Anyway ... we found the deed! Actually, we found many deeds. My research associate talked with Mark Carden of the city of Rochester's Maps and Surveys Division, who located more than a dozen deeds for the property listed as 524 Oak St., which includes the soccer stadium. All of the deeds are owned by the city.

And here's the key part: Carden says that according to the deeds, that property on Oak Street has never been owned by anybody except the city of Rochester, at least not since PAETEC Park even bagan to come into the picture. That includes PAETEC Park itself.

The city owned everything, then leased the property — the land AND the stadium — to DDE's corporation Rochester Rhinos Stadium LLC. When the previously Rhinos ownership went belly up, the city simply pulled the lease to everything.

So when we were all told several years ago that PAETEC Park would be a private venture (albeit largely publicly funded) owned by DDE, that simply wasn't true. The soccer stadium has been a city-owned project all along.

In addition, this confirms that NBT Bank never had any claim to the stadium through the mortgages they gave to DDE because DDE never owned the stadium anyway. That's why the bank didn't put up a fight when the city "seized" the stadium from DDE. That's why NBT was able to foreclose on the corporation (Rhinos Stadium LLC) but NOT the asset (the stadium) — because the corporation never HAD the asset to begin with.

This all raises a few key questions, including the big one: Where exactly did all that $32 million go? What path did it take, and where did it end up?

DDE received $10.6 million in loans from NBT (and Adirondack Bank). But if DDE never owned the stadium, where did that $10.6 million go? The same question can be asked about the $19 million in state funding for the project.

Did all that money simply go to the city directly, which would mean that Rochester Rhinos Stadium LLC might have been just a shell corporation designed to give the appearance that the stadium was a privately-owned project?

You also have to wonder how much NBT Bank knew. Did they dish out all that loan money in the belief — the now mistaken belief — that it would go to DDE to allow them to build the soccer stadium? If that was the case, does it mean that, essentially, the bank was duped? Is the president of the bank walking around with a big, "Kick Me" sign on his (or her) back?

I should note, by the way, that I e-mailed Frank DuRoss on Wednesday to see if he wanted to comment on the fact that his company apparently never owned the stadium, but I haven't heard back.

I also asked him his thoughts on how a soccer stadium that was built for $32 million has an assessed value of $12 million.

The truth about soccer stadium ownership?

No one but the city of Rochester ever owned, possessed or sold PAETEC Park. Not DuRoss/Donner/Economides (DDE), not their company (Rochester Rhinos Stadium LLC), not NBT Bank, no one.

At least, not according to the city’s own Tax Assessor’s office.

Know what the Assessor’s office also says? That PAETEC Park, which allegedly took $32 million to build, is only worth just over $12 million. That’s nearly a $20 million difference. So why the difference?

But wait, there’s even more: the city Assessor’s office can’t even find an actual deed for the stadium. Either one has never existed, or someone is hiding it.

E-mails and phone calls by my research associate to city officials regarding the stadium situation have not been returned.

But back to the first point. Remember how several players in the whole Rhinos/PAETEC Park fiasco, including the city and DDE, said it was DDE – or their company, Rochester Rhinos Stadium – that owned the stadium when it was first built?

They also said that the city only owned the land the stadium sits on and that DDE’s corporation – which included its biggest asset, the stadium – leased just the land from the city and operated the stadium themselves.

These players said the city didn’t assume control of the stadium until DDE defaulted on their lease agreement with the city, which had the legal right to seize property as a result.

All not true, at least from what we have learned from our extensive research.

Either that, or the people in the Assessor’s office have been kept out of the loop.

Because, as my research associate discovered, the Assessor’s office has absolutely NO RECORD of a sale or transfer of the deed to the stadium property. But even that’s moot, because the Assessor’s people CAN’T EVEN FIND EVIDENCE OF A DEED to begin with.

That’s why there was never any formal foreclosure, sale or transfer of property. There was nothing to transfer because the city had the stadium all along.

Hey, maybe the city folks who dealt with the stadium just forgot to file a deed and a record of transfer. Oops! We all make mistakes.

But I doubt that was the case. It it’s NOT the case, then I challenge city officials to produce a deed and an official, legal notice of sale or transfer.

OK, you might ask, what does it matter now? Even if the city didn’t own the stadium to begin with, it would have owned it by now anyway because of the seizure clause in the lease agreement. So either way the city would have ended up owning the stadium at this point in time.

But it DOES matter. Because DDE secured $10.6 million in loans from NBT Bank on the premise that DDE would be building and owning the stadium. On top of that, DDE secured $19 million in state grants to help construct the facility.

In addition, the fact that the city has always owned the stadium means that the much-ballyhooed ground lease between the city and Rochester Rhinos Stadium LLC was meaningless, just for show.

Again, maybe this has all been a misunderstanding. Maybe the very accommodating staff in Assessor’s office is not fully informed, or maybe city officials never got around to filing the deed and proof of the transfer. Or heck, maybe the stadium doesn’t even HAVE a deed because it’s an item, not actual land. Maybe it doesn’t need a deed. Any of those explanations might be the case.

But if there’s a real-estate assessment, then there HAS to be a deed.

And again, you might say, what’s the big deal? So there’s a few pieces of paper missing, it’s all just technicalities.

But technicalities matter. The devil, as they say, is in the details.

OK, now for the second point — that PAETEC Park is only worth $12 million but cost $32 million to build. According to the official city assessment, the 4.75-acre property at 524 Oak St., including the stadium, is worth $12 million.

How do we know that includes the stadium? Because the assessment sheet – which is publicly available on the Internet — states, “Property Class: Stadium.”

Of course, that’s just the value of the stadium itself. When you throw in the two other addresses associated with the property, 480 Smith St. ($80,000) and 900 W. Broad St. ($400,000), the grand total assessment is $12,480,00.

That’s still A LOT less than $32 million. That’s a lot of depreciation in two years. Or is it something else?

Styres' timing is perfect

The American Hockey League's approval of Curt Styres' purchase of 60 percent of the Amerks (and Knighthawks) was impeccably timed, because on Monday the Amerks' credit rating continued to plummet.

According to Dun & Bradstreet, the financial stress score of Rochester Amerks, Inc. increased from 3 to 4. A company's financial stress score measures its risk of failure, with a score of 5 being the highest risk and 1 being the lowest.

According to D&B, only 3 percent of the country's companies have a higher financial stress score, which means that only 3 percent of those firms have a higher likelihood of collapse than the Amerks.

D&B also says that Rochester Amerks, Inc. carries an extremely high risk of late payments. In addition, the company rates a 15 on D&B's Paydex scale, which measures a firm's payment performance, with 100 being the best and 1 being the worst.

It will be very interesting to now see if the Amerks' credit rating improves with the sale to Styres.

Big stuff on the way

Good evening, folks. I probably won't have anything new tonight or tomorrow (Wednesday) morning, but I'm working on something big for Thursday morning. And I mean BIG.

In the meantime, send some positive vibes to both the Red Wings and the Rhinos. They each need all the extra mojo they can get.

Don't gloat, Wings fans

Hey, I'm as optimistic as the next guy, but ...

OK, I can't finish that sentence with a straight face. We all know I'm a pessimist, almost to an unhealthy extreme.

That's why I'm not surprised at all that the Rhinos have started the 2008 season 0-2. I'm not really even surprised that they haven't even scored a goal yet.

What could you expect? This year's squad was almost literally thrown together and shoved on the field at the last minute. With just a few weeks to go before their 2008 season-opener, most of the players weren't even sure there would BE a 2008 a season-opener.

When they FINALLY got the OK to practice, they had only that said few weeks to prepare, while most other USL First Division teams had the chance to start getting ready, both physically and mentally, long before the Rhinos did.

Then, on top of worrying about the future of the franchise and having precious little time to prepare, the players are now being tossed out on a five-game road trip to start the season.

Frankly, I think a lot of people got a little too excited about the Rhinos' undefeated preseason record. The Charleston Battery and the Minnesota Thunder are just a WEE bit better than St. Bonaventure or whatever else other scrub teams the Rhinos beat up on in the preseason.

This is all not to say, however, that the rest of the 2008 campaign will go as poorly as the first two games did. The Rhinos are a talented bunch with a very able and talented coach, so their fortunes are bound to turn around just a little bit. Give them some time.

And yes, I can hear you Red Wings fans snickering in the background. Admit it: a lot of you baseball people are loving that the Rhinos have laid an egg — actually, TWO eggs — so far. Do NOT try to deny that there's more than a little Schadenfreude going on at 1 Morrie Silver Way.

But before you Wings fans start to do a Mr. Burns impression — "Excellent!" — keep in mind that, umm, YOUR team is also stinking up the joint right now. The Wings have dropped five of their last six games, including last night's disaster, in which they blew a 6-1 lead in a loss to Columbus. The Wings are now a depressing four games under .500. Weren't these guys supposed to challenge for a league title?

In fact, when you toss in the fact that the Knighthawks just missed the playoffs for the first time in franchise history, the last couple weeks have been downright rotten for the Flour City's sports teams.

So to ALL of you, I say, "Welcome to the world of pessimism. You'll find it's nice and comfy in this little corner of existence. Sit down, grab a beer (although it's probably stale) and revel in the negativity. After a while, it'll just come naturally."

Former CFO enjoyed his time with RSG

Good morning, folks. I'm writing this a little before 7 a.m., which is mind-blowing to me, because usually at 7 a.m. I'm either unconscious or functionally brain dead. I actually didn't believe people when they told me there's part of a day that exists before, like, 9 a.m. But I stand corrected.

Anyway ... yesterday afternoon, I spoke with Ronald Steinmiller, the most recent chief financial officer to leave the Rochester Sports Group. He's now working as the vice president of finance and administration for the Rochester Philharmonic Orchestra, and he says he parted ways with the RSG on good terms.

"I left on my own," he told me. "I enjoyed my time at the Rochester Sports Group."

He said he didn't so much leave the RSG as he did join the RPO. He said his family has always been involved in music, and the position with the orchestra gave him a chance to pursue that passion again.

"This was a great opportunity to get back into music and give back to the community," he said.

I quickly then asked him the question I've been waiting to ask him (and all the other CFOs who have left the Rochester Sports Group): Was he aware of any financial mismanagement at the RSG?

He respectfully declined to comment.

"With any company I work for, I don't discuss the finances with anybody because it's a privately-held company," he said. "I don't feel it's prudent on any person's part (to comment). It's a confidentiality I have with any company I work for."

And that was that. We shouldn't read anything into his comments (although it's really, REALLY tempting to do so) ...

Lots of stuff to react to

Unfortunately, it looks like it's going to be a long night here at the Webster Herald — I might even miss all of tonight's Adult Swim, and I need my Harvey Birdman fix — which is bad because there's a lot of stuff to talk about.

First and foremost is Chenango County Supreme Court Justice Elizabeth A. Garry's ruling this afternoon that yes, in fact, the three former Rhinos owners are liable for all those PAETEC Park loans. That's not unexpected, of course — despite all the other possible scenarios I raised, that was still the most likely outcome.

I will do my best to absorb and react to Garry's ruling over the next 24 hours or so. In the meantime, I'd love to get your thoughts. The big question, of course, is whether the Amerks and Knighthawks are in jeopardy.

Secondly, there was D&C reporter Jill Terreri's big story on Sunday about Frontier Field's murky finances. I have to admit that I haven't had a chance to read the article in depth (I hope to tonight), but at first glance it looks really good and thorough.

I would like to note, however, that I've been writing about the situation at Frontier Field — Jim LeBeau's role, the Sports Authority and GROSFC, the annual debt, the taxpayer money subsidizing the stadium's operation — for many months now.

I've always maintained that the situation at Frontier Field isn't squeaky clean, that there's definitely some political wheels being greased, and that the Red Wings have a pretty sweet deal going at the stadium.

The D&C article, of course, diverts attention away from PAETEC Park, and the paper might have done that deliberately to "balance off" all the negative coverage of the Rhinos and make it seem like the paper is being "fair."

However, even if that WAS the paper's motivation, the fact that the D&C is finally scrutinizing the Frontier Field situation is a welcome development, and Terreri should be applauded for her efforts.

Finally, I WILL have something new tonight, but it'll probably be later, after midnight — I talked to former Rochester Sports Group CFO Ronald Steinmiller today, and I'll discuss our conversation in a few hours (although, unfortunately, there's not much to discuss).