Baldwin leaves state holding the bag for more than $250K

By Don Michak  Journal Inquirer

Thursday, August 30, 2012

 

A limited-liability corporation behind last year’s Hockey Fest at Rentschler Field owes the state more than a quarter-million dollars — and the state auditors say the debt is unlikely to be collected.

But officials in Gov. Dannel P. Malloy’s budget office tell the auditors they “haven’t abandoned hope” of getting the money.

In their latest review of the financial records at the state-owned stadium in East Hartford, the auditors cite two accounts receivables for a total of $265,048 that were three months past due at the end of the last fiscal year.

Nearly all of that money — $263,802 — is owed by Hartford Hockey Club LLC, which Auditor John C. Geragosian said Wednesday had been created by Howard Baldwin, the chairman of Whalers Sports & Entertainment and the founder of the Whalers Hockey Fest.

The auditors in their report said the debt has “been determined doubtful for collection,” adding that since the stadium’s operating account doesn’t appear to take that into consideration, its accounts receivables “appear to be overstated.”

Geragosian said the two-week long Hockey Fest event — which featured the Harvest-Properties Whale Bowl involving celebrities and Hartford Whalers and Boston Bruins alumni, followed by an American Hockey League game between the Connecticut Whale and the Providence Bruins — appeared to lose money, probably because of poor weather.

The official crowd figure on that frigid and windy game day in February 2011 was listed at 21,673, but with 15,234 tickets scanned at the event, there were more than 6,000 no-shows. The Journal Inquirer reported that when the alumni game began there appeared to be about 5,000 people in the stands.

In any event, Geragosian said the prospects for collecting related debt “don’t sound very favorable to the state.”

He also referred to state Judicial Department records showing that Hartford Hockey Club LLC currently is a defendant in nine civil lawsuits, including a contractual complaint lodged against it and Baldwin by Bushnell Management Services, the company that since 2010 has managed the stadium for the state.

AEG Management Inc. last month assumed management of all business operations for the Connecticut Whale, severing ties with Baldwin’s Whaler Sports Entertainment Group, which had been running the team.

The auditors criticized Bushnell Management for not creating in its financial statements an allowance for “doubtful accounts.”

But the state Office of Policy and Management responded that, “We respectfully take exception to this finding.”

“While we have serious concerns about this account, we have not abandoned hope of collecting these funds and are working with Bushnell Management to pursue collection efforts,” they said.

OPM also said it hadn’t created an allowance for doubtful accounts in the past “because the nature of the stadium business is such that all event expenses are deducted from ticket proceeds at the time of the event settlement.”

“Outstanding expenses (and doubtful accounts) are essentially an anomaly,” it added, “in this case the result of an unexpected winter storm that generated large snow-removal expenses while also discouraging attendance.”

The auditors, meanwhile, said it was Bushnell Management that deemed the amount doubtful for collection. They added that to present the financial condition of the stadium in “as accurate a manner as is reasonable,” a conservative estimation of its accounts would be more in accordance with Generally Accepted Accounting Principles.

The auditors reported that Rentschler Field suffered a $2.3 million operating loss for the fiscal year ending in June 2011, but Geragosian said most of that was accounted for by $2.1 million in depreciation expense.

That meant the actual loss was closer to about $100,000, he said.