The city of Santa Clarita voted unanimously this week to renew a five-year contract with the L.A. Kings and the American Sports Entertainment Company for management of The Cube.
The city purchased the skating rink formerly known as Ice Station Valencia and reopened it with a ribbon-cutting in April 2021.
The city reported Tuesday that since its takeover, it’s hosted more than 2 million patrons, and “established itself as a regional destination for recreational ice sports, tournaments,camps, public skating and community programming,” according a staff report on the facility.
The current deal created a limited liability corporation, JVI, for the purpose of the rink’s contract.
Kyle Lopez, a management analyst for the city of Santa Clarita, wrote that the city selected the Kings/ASEC partnership in September 2020, in the middle of a pandemic, in her staff report on a recommendation for contract approval.
The 2026-27 budget reflects “lessons learned” during the first five years, which included adjustments for increased repairs, prevailing wage obligations, insurance premiums and processing fees for a large volume of transactions, Lopez wrote.
She also noted that the facility has exceeded original operational and programming expectations, which led the city to take another look at “operational roles and responsibilities, refine management and revenue-sharing provisions, and align budget assumptions with current facility performance and long-term operational objectives.”
“The agreement more clearly defines maintenance obligations, establishes responsibilities for repairs and replacement of facility assets, and refines oversight, reporting, and financial transparency requirements,” according to the agenda.
The contract also anticipates an annual increase in on-ice revenue at about 3%, or approximately $120,000 to $130,000 each year, based on staffing budget estimates, which is consistent with historical budget figures the city provided.
The contract also calls for the city to pay $232,000 for management services this year, with an escalator for each year of the contract, which increases annually.
The contract also calls for the city to have some flexibility with respect to The Cube hitting its revenue projections going forward, according to the city’s report.
“The annual incentive management fee is revised so that JVI will be eligible to receive an annual incentive payment of $150,000 once gross revenue reaches the applicable annual gross revenue threshold,” which is estimated to be $4.3 million this year, and increasing 2% annually.
“JVI will also receive 10% of gross revenue generated above the applicable annual threshold,” the city notes in its agenda.
Due to the amount of the annual incentive being dependent on actual annual gross revenue, the city manager is authorized to modify the contract award to accommodate any increase in incentive compensation.
