UND, Ralph Engelstad Arena reach new, multiyear usage agreement
GRAND FORKS --The Ralph Engelstad Arena and the University of North Dakota have reached a new, multiyear usage agreement.
Peter Johnson, UND spokesman, said the university feels “good, very good” about the new usage agreement.
“I think that we like that the fact that it’s a three-year arrangement,” he said. “I think we’re happy with the way things ended up.”
UND President Mark Kennedy was not available for comment, but Johnson said overall, Kennedy was “happy with the way things ended up,” adding Kennedy “looks forward to a long and productive relationship with Ralph Engelstad Area Inc. and the Engelstad Foundation.”
Jody Hodgson, general manager of the Ralph, said his staff will continue working with the university to “maximize the benefit” of the Engelstads’ gift to the university.
The usage agreement differs from the 30-year lease agreement between the university and the Ralph. The usage agreement deals with the operations and use of the building.
The new usage agreement includes some minor administrative and operational changes, but the material terms and conditions are similar to those in the prior agreement, which expired
on June 30, 2017.
Johnson said despite not having a written agreement for the past year, things still went well.
“We're happy to have the agreement signed, but I would also say that things seemed to go smoothly this past year because the past usage agreements were detailed and there was a routine,” he said.
Kennedy, along with other UND officials, met with Kris Engelstad McGarry and representatives of the Ralph Engelstad Arena in Las Vegas at the end of May. Earlier that month McGarry, Ralph Engelstad’s daughter, said communication between her and Kennedy had been "quite hostile at times" and also claimed Kennedy had threatened to bring legal action over the deal.
Both described the discussion on May 30 as “successful” and “productive.”
Johnson said he believes it was important for the entities to have conversations in person.
Staying the course
Hodgson said there were many different options discussed for the new agreement, but the parties agreed the former usage was the best way to go forward.
“At the end of the day, the parties agreed that the prior platform provides the best opportunity for future success for both entities and the decision was made to perpetuate the prior usage agreement,” he said.
REA will continue to manage all ticket revenue from UND athletic events on behalf of UND, as it has previously. Ticket revenues will continue to be split between REA and UND, with REA retaining 52 percent of ticket revenues, while UND will retain 48 percent, which is consistent with the previous usage agreement.
The revenue retained by REA from ticket sales and sponsorship sales is the money that REA receives from UND in exchange for the access, services, and labor that the Ralph provides to UND each year.
At the end of each year, REA funds a capital reserve fund for extraordinary repairs, maintenance, and building enhancements as well as an operating reserve fund to cover unanticipated operating expenses, and then allocates the balance of its annual net income to UND athletics. The entities aim to make an annual minimum deposit of $500,000, which is also consistent with previous usage agreements.
McGarry said the Engelstad Foundation is “committed to a positive and productive relationship with UND.”
“The staff at Ralph Engelstad Arena will continue their good work in maximizing the opportunity provided by my parents for UND, its students, student-athletes, coaches, the community of Grand Forks and citizens of the broader region,” she said in a statement.
Jed Shivers, vice president of finance and operations at UND, will be a board member on the REA Board of Directors. Alice Brekke, who previously held Shivers’ UND vice president position, was also a member of the board. Shivers took over her spot when he started this spring.
“Even as a newcomer, I am grateful for the support that the Engelstad family and the Engelstad Foundation have shown in the past and look forward to collaborating productively. The new usage agreement is a good example of that,” he said in a statement.