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Explainer: What Was Behind the Sudden Decision to Close Izod Center’s Doors?

NJ Sports and Exposition Authority’s close-mouthed about how and why venue had to close doors and reach deal with Prudential Center

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Hundreds of North Jersey residents were taken by surprise earlier this year when the New Jersey Sports and Exposition Authority (NJSEA) suddenly decided to close the 34-year old Izod Center. With no advance warning and minimal explanation to the public, the NJSEA voted at its January meeting to temporarily shutter the legendary Bergen County arena for at least two years, closing its doors within a matter of weeks and transfering events on the 2015 schedule to what has often been seen as a competitor, the Prudential Center in Newark.

Here’s a recap of how the Izod Center – previously known as both the Brendan Byrne Arena and the Continental Airlines Arena – came toits recent curtain call:

Dollars and sense: Izod’s closure was made official on Jan. 15 when NJSEA commissioners voted to approve a vaguely worded “Resolution Relating to Arena Operations.”

The resolution noted that taxpayer subsidies for NJSEA operations have grown substantially from $4 million in 2011 to $34.3 million in 2014 and that Izod was spending as much as $750,000 a month just to keep the doors open .

Without the revenue to keep up, losses at Izod were anticipated to top $8.5 million this year.

Izod – the only public facility at the East Rutherford complex still under direct NJSEA control - lost considerable business in recent years to the nearby Prudential Center and to the Barclays Center in Brooklyn. Closing was a sensible way to stop the financial bleeding, NJSEA officials said.

Deal with Prudential Center: The resolution formalized an agreement reached on Jan. 9 between NJSEA and the Prudential Center’s operator, Devils Arena Entertainment, that outlines the details of the temporary closure, effective Jan. 31.

In exchange for $2 million from the Devils – paid in yearly installments of $500,000, over four years – NJSEA officials wwill turn over their database of ticketholder contacts and keep Izod closed for two years.

The agreement outlines several scenarios in which Izod could be closed even longer, for up to seven years (or through 2021); it could also restart operations in two years, but with restrictions on crowd size and show content governed by Prudential.

It is not clear from the document what agency or process will determine the final fate of Izod.

Devil’s in the details? NJSEA officials declined last week to say more about , the closure, noting they are focused on the agency’s ongoing merger with the New Jersey Meadowlands Commission.

The deal resulted in 1,700 Izod workers suddenly receiving layoff notices, many of them stagehands and ushers who worked during events; while considered part-time, for hundreds of these workers the job provided nearly one-third of their total yearly earnings.

The sudden agreement also forced organizers of more than two dozen events scheduled through August – productions ranging from Disney on Ice, to WWE Summer Slam, to local college graduations – to scramble for openings at other regional facilities, or move their shows outside the metro area. Some events, like Summer Slam, had been promoted for months to a national audience and were expected ed to attract thousands to hotels and local businesses in the region.

’Complete sham:' The NJSEA’s decision caught the attention of Sen. Loretta Weinberg (D-Bergen) and Izod Center workers, including Joe Villani, who heads the local stagehands union; both raised concerns at the Jan. 15 meeting about the surprise move and the lack of detail available for public review.

“It’s a complete sham,” Villani said last week.

Weinberg filed the first of several public records requests the following day in an attempt to get to the bottom of the state’s reasoning.

In addition to her concerns about the secretive nature of the decision-making process, Weinberg believes the state isn’t being forthcoming about the financial situation.

From boom to bust: She points to a legislative analysis that shows Izod had annual profits of $3 million in recent years and to meeting minutes from late 2014 that quote NJSEA officials touting ing the arena’s financial performance. If the facility was doing well in November and was booked through the summer, why did NJSEA rush to close the doors so quickly?

After weeks of delays, state officials provided hundreds of pages of documents in response to Weinberg’s public records request – but blacked out what appears to be a key narrative explaining the NJSEA’s financial struggles.

She asked the court to order state officials to provide more clarity, but the judge claimed her request was overly broad, while instructing the state to at least explain why it withheld what it did.

The judge also urged both parties to sit down and talk; Weinberg reiterated this request, but three weeks later, NJSEA has yet to respond to her request or make public what led to the decision to close Izod.

Lilo H. Stainton is an award-winning reporter who covered politics and public policy in New Jersey for more than a decade and later served as press secretary to Gov. Jon S. Corzine. She has also worked as a communications strategist, campaign director, and advocate for coastal protection in the wake of Hurricane Sandy.

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