Owner of Bills and Amerks will start running Blue Cross Arena next month

Brian Sharp , Sal Maiorana | Rochester Democrat and Chronicle

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UPDATE: Mayor Lovely Warren announced at a 1 p.m. news conference that Pegula Sports and Entertainment will take over management of Blue Cross Arena beginning Aug. 1. This is a breaking story, check back for uptates.

The owners of the Rochester Americans, Buffalo Sabres and Buffalo Bills could take over interim management of Blue Cross Arena as soon as Aug. 1, under a proposal made by the city this week.

"It is draft stage only," said city Corporation Counsel Tim Curtin. "And the Pegulas have not responded."

An announcement on the future management of Blue Cross Arena at the Community War Memorial is expected as soon as Friday, according to the city.

Curtin said he emailed the proposal to Pegula Sports and Entertainment on Wednesday evening. While an "active negotiation," he said, officials have "agreed on a broad-brush concept" and are moving quickly to solidify terms. The interim period would run five months, from Aug. 1 through Dec. 31, giving the city time to negotiate a permanent replacement for SMG.

The management shakeup took SMG officials by surprise when the city informed them of their decision two weeks ago. But city and PSE officials have been in discussions "for at least six months," said Bruce Popko, chief operating officer for Pegula Sports, "just working on common goals and what we wanted to be a part of."

"I know the city is making a concerted effort to improve that downtown corridor, and this goes hand in glove with all that,” he said.

The city has justified booting SMG by saying the longtime manager failed to meet revenue benchmarks, resulting in a rising subsidy. SMG disputes that assertion but has not resisted the termination. The Philadelphia-based firm has managed Blue Cross Arena since 2000, and its on-site general manager, Jeff Calkins, has been at the helm, through various predecessors, for three decades.

SMG was notified on June 29, and will be out on Friday. The city will handle operations in the short term.

More: City ousting Blue Cross Arena operator SMG

Kim Pegula: From orphan to NFL owner

Officials are “still going through the staffing plan," Popko said.

"There will be a transition from SMG, but we’ll play on our strengths," he said. "We’ll build on the functional areas such as business development, ticket operations. We’ve got such a great infrastructure so to take on something like this incrementally, there are great efficiencies that we can build on.”

The city will likely not have to go through an open request for proposals process to select the permanent manager, Curtin said. Regardless, the Pegulas would "have a leg up" should everything work out for the interim agreement.

“It has really been the definition of public-private partnership," Popko said of working with the city. "It was an interesting period when we (the Amerks) were operating with an expired lease the last few years and quite candidly, it was ignored a little bit. With some of the leadership transition that has occurred with the Pegulas and PSE, we started paying a little closer attention and we think (having a new agreement in place) will provide a better fan experience at Blue Cross Arena.”

BDSHARP@Gannett.com

MAIORANA@Gannett.com