Cash-Strapped Convention Center Owes Taxpayers $745,000

The city of Fresno is pouring millions of dollars into downtown and so far, it's only putting taxpayers in more debt.

One of the biggest money drainers is the convention center.

City leaders met Monday to talk about that.

The city owns the convention center and spends nearly $8 million a year on subsidies and debt payments.

The center owes the city more than $700,000.

It is managed by East Coast-based company SMG.

But city leaders are not too pleased with the way SMG is handling the finances.

At Monday's meeting, director Bill Overfelt told council members, "I did not have the cash to pay PG&E on a timely basis."

Overfelt says he's been operating on a deficit for several years and can't pay the bills, but city leaders say, he never told them about it.

Council member Lee Brand says, "it's simply not a good way to do business."

Overfelt says in response, "I have no argument.{} But that is the way SMG from a management standpoint works."

The director refused an interview with KMPH.

{}We asked him if he was mishandling taxpayer money, Overfelt responded, "the answer to that is obviously no."

Altogether, Fresno is losing about $14 million in taxpayer money every year on bad investments in downtown Fresno.

The city is losing about $7-$8 million a year on the convention center.

The city is losing about $3.5 million a year on Chukchansi Park, and the Grizzlies owe about $1 million in rent.

The city is also spending about $3 million on a huge parking garage that's barely used.

So now the city has to find ways to save money, and is asking SMG for solutions.

City leaders say SMG has gone over budget 6 out of the 9 years it's been running the convention center.

"I think it could be run better, in my opinion.{} There's ideas that haven't been tried...sometimes you do something for too long you just become stale," said Brand.

Brand says the city has a 10-year-contract that goes until 2019 with SMG.

There is a clause in the contract that says the city can fire SMG if it doesn't meet budget benchmarks - Brand says, SMG has not.

Another cost saving option that was discussed was shutting down Selland Arena for part of the year.

In his defense, Overfelt says the convention center's buildings and facilities are old and outdated, and that's a big reason why it can't compete with the Save Mart Center.

The city and convention center leaders will meet again on September 9.