SMG again wins bid to operate 1st Mariner Arena

Current operator SMG is the winning bidder for a new five-year contract to run 1st Mariner Arena and oversee its potential renaming, according to a memo from the city's top purchasing agent.

SMG's proposal awaits approval by the Baltimore Board of Estimates but has cleared the rest of the city's bidding process. The board will vote on the contract Wednesday.

The Pennsylvania-based management company, which has operated the arena since 1999, beat proposals from Los Angeles-based AEG and Global Spectrum, a subsidiary of Philadelphia-based Comcast-Spectacor.

Frank Remesch, the arena's general manager for SMG, called it "a hard-fought battle," though he acknowledged "it's not done" until the board votes.

It is unclear what awarding the contract to SMG would mean for the naming rights. Considering it will be a new process, Remesch said, he isn't sure how it will go forward. 1st Mariner Bank has held the rights since 2002, and the bank has expressed interest in retaining the marquee.

Otherwise, the deal would maintain the status quo for the arena — the top-grossing venue of its size in the country, despite being smaller and older than its peers. The man who now owns the naming rights, former 1st Mariner Bank CEO Ed Hale, said he would be pleased to see SMG retain its role, but has other issues he plans to raise with the city.

SMG was chosen for "providing the best overall value to the city," according to a Dec. 11 memo signed by Timothy M. Krus, the city's chief purchasing agent.

AEG's bid was disqualified for failing to meet minority- and women-owned business subcontracting goals, the memo said.

Hale said he originally suggested the idea of selling naming rights for what has been known as the Baltimore Civic Center, which opened Oct. 23, 1962, and later as the Baltimore Arena. Hale, who owns the Baltimore Blast indoor soccer team, paid $75,000 a year to name the facility after the bank he founded; the bank reimbursed him for the expense as part of his executive benefits package, according to bank proxy statements filed with the Securities and Exchange Commission.

The city last extended the bank's naming rights contract in June, for six months. But in rebidding the arena's management contract, the city decided to roll in responsibility for overseeing naming rights "for a more efficient process," Kaliope Parthemos, the city's deputy chief of economic and neighborhood development, told The Baltimore Sun in October.

That precluded Hale from bidding, he said, given that he doesn't own an arena management company.

Hale said he hopes bank officials pursue continuing the naming rights deal, but he would not play a role in that even though he remains its largest shareholder. Hale stepped down as the bank's CEO last December as part of a private equity buyout deal, under orders from federal regulators to raise capital levels. Last month, parent company First Mariner Bancorp withdrew from the deal with New York-based Priam Capital Fund I.

Hale said he plans to fight for other investments he made in the arena. He asserted he paid up to $3 million for video screens inside the arena and billboard structures around its facade. City officials have told him they are city property, he said.

"We have a huge disagreement," Hale said. "That's going to come to the surface as soon as they award this to someone. That is going to absolutely be a dispute."

Hale said he hopes to work out the dispute amicably with SMG.

If the city board approves the contract, the next steps for the naming rights are "uncharted territory," said Remesch, who has worked at the arena since 1988.

"I don't even know if there's going to be further negotiations with the city or not," Remesch said. "I don't really know how this is going to be."

The arena's future also remains up in the air because of a proposal by the Greater Baltimore Committee and Willard Hackerman, president and CEO of Towson-based Whiting-Turner Contracting Co., to replace it in a $900 million expansion of the Baltimore Convention Center. A memorandum of understanding is being drafted so the Maryland Stadium Authority can continue to study the proposal.

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