December 13, 2009

MCSC: Promoter uses county office space for free

David Andreatta
Staff writer

A company owned by local promoter James LeBeau that draws nearly $47,000 a month to manage the Monroe County
Sports Commission and Frontier Field has for years enjoyed 3,600 square feet of free office space and utilities at the
expense of county taxpayers, even as the company pursues outside interests and office vacancies in Rochester hover
near a record high.

Beau Productions operates from the second floor of a county-owned converted firehouse overlooking Frontier Field. The
company is paid about $21,000 a month to manage Frontier Field for the Greater Rochester Sports Authority.

In addition to overseeing the ballpark, Beau Productions has over the years produced or promoted numerous for-profit
ventures without the overhead costs of rent and utilities.

The company organizes the annual Lilac Festival and county air shows, and has a $310,000-a-year contract to manage
the Monroe County Sports Commission, a quasi-independent arm of county government. It has dabbled in city, village and
ethnic festivals, run light shows in county parks, and booked events at a county community center in Charlotte.

LeBeau, a generous contributor to Republican causes, is also a spokesman for Medley

Centre developer Scott Congel, for whom LeBeau helped convince county officials this
year to approve multimillion-dollar tax breaks on the promise to revive the mall.
Conducting the additional business from the office is permissible for Beau Productions "so long as said services do not
interfere with (its) obligations" to Frontier Field, according to Beau Productions' contract with the Sports Authority.

"If we had to have an office, all we would do is charge more back to the entities (that hire us)," LeBeau said.

A former Eastman Kodak executive once dubbed "the P.T. Barnum of Rochester" by a city councilman, LeBeau has
spoken passionately about his devotion to Monroe County and its potential for tourism. But he does not appear to have
ever publicly acknowledged that his enterprise has been operating rent-free since at least 1999.

"I can't, in the course of one day, I mean, move from one place to another," LeBeau added. "And I'm not going to try to
because I said (to the county), 'Look, if this is what you want from me, and you said you did, this is what's got to be
provided.'"

With brick interior walls and brown berber carpeting, the office is modest. It houses a warren of cubicles for eight
employees, including LeBeau's wife, and a sparsely decorated conference room, where sports bobble-head dolls adorn
the windowsills.

The contract guaranteeing Beau Productions free office space was inked in 2007 — the year downtown office vacancies
peaked — although contracts between the company and other public entities dating to 1999 list the company address as
the North Plymouth Avenue firehouse.

LeBeau and others interviewed for this story acknowledged that his office has been there for years.

While LeBeau has not paid for the space, he and his company have contributed $36,721 to local Republicans and the
party since 2003, the earliest year for which county and state campaign finance records were available.

The Republican-run county government owns Frontier Field and the converted firehouse, and appoints two-thirds of the
Greater Rochester Sports Authority board members.

Authority board member Geff Yancey recalled the board having a "long dialogue" about the appropriateness of the office
space when it formalized the arrangement two years ago.

But he said it was determined that rolling the free office into the contract was a small price to pay for a company that had
experience managing the ballpark and whose fees were a fraction of its competitors.

"You have to take it in the context of value and what the alternatives were to hire someone else," Yancey said. "I don't see
it as any kind of issue at all."

Yancey recalled two other companies inquiring about the job when it was put out to bid and demanding upward of
$600,000 annually. Over its five-year deal with the authority, Beau Productions will be paid about $1.25 million.

Vacancies of Class B office space in downtown Rochester peaked in 2007 at 37.5 percent, according to CB Richard Ellis,
a commercial real estate firm that tracks office vacancy rates.
Class B space can fetch between $12 and $18 per square foot a year, according to Moore Corporate Real Estate,
potentially making the firehouse office worth as much as $64,800 a year.

Defending the free space, LeBeau likened his deal to that between the city of Rochester and Blue Cross Arena manager
SMG Inc., which also manages the Constellation Brands-Marvin Sands Performing Arts Center, or CMAC, in Ontario
County. The Philadelphia-based company's offices at the arena are listed as the administrative offices for CMAC.

The SMG agreement is different, though, because SMG pays the operating expenses of the arena and only profits
through events held there. As for its relationship with CMAC, the company has an office at the center and an employee
who occupies it during the summer months when the facility is open.

"It's a real stretch to try to compare them," said SMG Regional Manager Jeff Calkins.

Paul Haney, the ranking Democrat on the County Legislature Ways and Means Committee and a frequent critic of public
authorities functioning as shadow governments with little oversight, said the agreement with Beau Productions smacked
of a sweetheart deal.

"While it's not improper for (LeBeau) to have space in that building, there ought to be something that says the space has a
rental value and that the amount be offset against the contract for managing Frontier Field," Haney said. "He's using it for
other profit-making activities. There should be some accountability for that."

William Sentiff, president of the Sports Authority board, said requiring Beau Productions to pay prorated rent or conduct its
private business from another office was impractical.

"It just isn't feasible to tell Jim (LeBeau), 'You can run Frontier Field out of here but if you have to make a phone call for
the Lilac Festival or anything else, run outside the building and do it," Sentiff said. As for rent, "I think it's insignificant what
the county taxpayers could get out of there."

DANDREAT@DemocratandChronicle.com

Additional Facts
Authority vs. commission

The Greater Rochester Sports Authority is a public authority that was created in 2000 by state statute for the purpose of
overseeing Frontier Field and constructing an outdoor soccer stadium. The Monroe County Sports Commission, by
contrast, is a nonprofit local development corporation created in 1998 by Monroe County to draw athletic events here.
Both entities employ the promotions company Beau Productions.

December 13, 2009

Economic impact of local sporting events may be inflated

David Andreatta
Staff writer

When the state announced last month that Rochester would host the 2011 Empire State Games, the news marked the
latest feat for the Monroe County Sports Commission, a publicly funded nonprofit that six years ago ramped up efforts to
fulfill its mission of generating tourism revenue by drawing sporting events here.

Since late 2003, the group has been aggressively marketing Monroe County as a prime spot for sporting events under the
direction of its manager, James LeBeau. His company has been paid $1.4 million plus tens of thousands of dollars in
expenses in that time to travel the country courting sports powerbrokers.

The investment, according to the commission, has paid off big by drawing hundreds of thousands of visitors who pumped
$166.5 million into the local economy from 2004 to 2008 by paying for hotel rooms, meals, gasoline, entertainment,
souvenirs and all the other trappings of an athletic event.

But that figure is misleading because it incorporates hundreds of events that the commission had no hand in bringing here
and that would have taken place without the existence of the commission.

Records obtained under the Freedom of Information Law show that the commission attracted just 51 of the 354 athletic
events factored into the economic impact figure. If only those events were considered, the economic impact dwindles to
about $32.8 million.

A Democrat and Chronicle review of the economic impact claims also found that they rely on questionable attendance
calculations and the application of what economists say is a misused mathematical formula for determining how money
trickles through the economy.
The commission acknowledges weaknesses in the data but maintains that the roughly $500,000 in county hotel-bed taxes
it receives annually is a worthwhile expense.

Officials said their calculations are intended to be estimates of the financial benefits of all the events the commission
supports and cast questions about their accuracy as irrelevant even though the numbers have been used to solicit more
tax dollars for the agency.

"It's not an exact science," LeBeau said. "It's an education process, and we've been working on this and trying to make it
better every year."

No industry standard

Founded in 1998, the commission didn't begin tracking economic impact until 2004. Last year, the commission reported
that its sporting events had a $61 million impact on the local economy. More than a tenth of that was attributed to the
Wegmans LPGA Tournament, which the commission estimated brought in $7.2 million.

But Tournament Director Linda Hampton said the commission had nothing to do with the tournament. "This event has
never been part of their umbrella of events," Hampton said.

Also contributing to the economic impact figure was the Greece Cobras 18th Annual Soccer Festival, a youth soccer
extravaganza that had a pool of 175 teams and was reported to have pumped $955,000 into the economy. The
commission donated $2,000 to the cause and made tourism brochures available to spectators.

Cobras Futbol Club President Gary Pasono said he appreciated the support but the tournament would have gone on
without the commission.

"They're getting the better end of the deal," Pasono said. "It's more wordsmithing on their part. They want the credit, but
they just provide a little finance."

Don Schumacher, executive director of the National Association of Sports Commissions, of which the Monroe County
Sports Commission is a dues-paying member, said there is no standard for calculating economic impact.

"There are as many ways to claim involvement in an event as there are sports commissions," he said. "The cynic in me
says that people often pick the way that produces the best result."

Hill Carrow, a founder of the National Association of Sports Commissions who now heads a North Carolina sports tourism
consulting firm, advises commissions to clearly define their involvement in an event.

"What becomes important is to indicate what your role was so the impact doesn't become overreaching or perhaps a little
deceptive," Carrow said. "It's reasonable to include events you sponsor if there is the possibility that the event could go
away if it weren't for the help."

Study results rejected

One way the commission has sought to improve the accuracy of its data has been to conduct studies of the events that
include surveying spectators, which experts say is the best way to gather the three critical tenets of economic impact —
the number of visitors, their length of stay and how much they spend.

But the results of studies conducted at three events last year were rejected by the commission, which reported to
VisitRochester and Monroe County that the events brought in $1.3 million more than the studies showed.

Commission Marketing Director Scott Bell said the studies were based on a template provided by the National Association
of Sports Commissions, but that they were conducted by college interns and contained flaws.

"Some of the results we found useful, while others just did not work," Bell said.

The commission typically relies on the organization hosting the event to estimate the number of visitors and their length of
stay, and assumes each visitor spends $117 a day. Researchers found daily visitor spending at the three events to be
between $75 and $102.

One study of the Presidential Power Play youth hockey tournament in February 2008 pinpointed attendance at 2,808, but
noted that 378 of those people were players and spectators from Rochester, local residents that tourism industry
standards dictate should not be considered when calculating economic impact. Thus, the number of visitors was 2,430.

Nonetheless, the commission reported the number of visitors to be 2,808 because that was the figure supplied by the
event host. The difference inflated the impact of the event by at least $188,000.

Commission officials acknowledged they should have used the visitor figure in the study and attributed the discrepancy to
a typographical error.

"It seems to me that somebody was a little sloppy with their numbers," said Lisa Delpy Neirotti, a tourism and sports
management professor at George Washington University who is considered an industry expert on calculating economic
impact.

"I would call for a little bit more scrutiny or a more conservative approach of actually collecting more data as to what the
real numbers are," Delpy Neirotti added. "The numbers are still going to be great."
That the commission has had a positive impact on the economy is undeniable.

Multiplier effect

In recent years, the commission has attracted national amateur hockey tournaments, national archery championships,
junior golf tournaments and the state Special Olympics fall and winter games.

But beyond the problems with its spending and visitor assumptions, the commission also calculates economic impact
using a "multiplier" of 1.7 to reflect that some of the money spent on an event — at hotels or restaurants or museums —
gets spent again in the local economy. The application means that every dollar a visitor spends has an economic impact
of $1.70. It is a practice frowned upon by many economists, who insist that only direct spending by visitors should be
counted.

"The use of these multipliers is among the mischievous practices used to legitimize a position," said John Crompton,
professor of recreation, park and tourism sciences at Texas A&M University and an authority on the economic impact of
sports. "What should be of concern is how much of the spending ends up in the pockets of county residents."

LeBeau defended use of the multiplier, noting that multipliers are used by sports commissions across the nation. Not all
commissions use a multiplier, but most do. The average multiplier was 2.37, according to a 2001 report by the National
Association of Sports Commissions, which discourages the use of multipliers but recognizes them as an option.

"We feel very comfortable with our numbers," LeBeau said. "I think we do as best a job as we can in trying to raise the
numbers, but we've always been on the conservative side."

Jeanne Fagan, a professor of business administration at Finger Lakes Community College and coordinator of sports and
tourism studies there, said the commission was being "cautiously accurate" with its multiplier.

Fagan also defended the commission's practice of tracking the economic benefits of athletic events it did not organize.
She said overlooking those events would be "unprofessional."

"Does it really matter whether they had anything to do with an event if there's an economic impact?" Fagan asked. "If the
commission doesn't capture the economic impact of sporting events, who's going to?"

LeBeau dismissed the economic impact figures as largely inconsequential.

"The economic impact is done for the sake of acknowledging the amount of effort that we put in and to continue to show
the hotel community and the facilities that we're out there doing our job," LeBeau said.

"It's not to say that I don't want to be accurate as hell because we're in the numbers business," LeBeau continued. "But it's
not like everybody's going to live or die off these numbers."

The numbers can carry weight, experts say, particularly when it comes to deciding how much public money should be
invested in an event.

"When you host an event and tend toward exaggerations with your economic impact numbers, that has implications,"
Carrow said. "Community leaders could overextend their expectations of what an event can deliver."

In July 2007, LeBeau wanted to hire another employee, and the commission had designs on buying a van, but the money
wasn't budgeted.

County Executive Maggie Brooks appealed in writing to the Greater Rochester Sports Authority to funnel $75,000 of its
county hotel-tax funding to the commission, citing the commission's $32 million in economic impact in 2006.

The request was granted.

DANDREAT@DemocratandChronicle.com

Additional Facts
Board members

Sports Commission board members are unpaid but may be reimbursed for related business expenses.
Maggie Brooks, county executive (ex officio).
Ed Hall, president of VisitRochester (ex officio).
President: Steve Hausmann of WBEE Radio.
Vice president: Tim Elie of Doubletree Hotel.
Secretary: Gary Mervis of Camp Good Days & Special Times.
Treasurer: Dan Mason of the Rochester Red Wings.
Members: Sarah Jane Clifford of Gymnastics Training Center of Rochester; Terry Diehl of Karpus Investments; Mike
Kelly of Catalog and Commerce Solutions; Laurie Kennedy of Special Olympics NY; Ray Cardella of Rochester Youth
Hockey; John DiTullio, Hot Talk 1280 WHTK/WHAM sports broadcaster; Rick Hager of Hager Productions; Ray Maluta of
ESL Sports Centre; David Green, athletic director of Irondequoit High School; Bob Scott of Bob Scott Productions; Lou
Spiotti, director of athletics at Rochester Institute of Technology; Cathy Turner of Rochester Speed Skating; and Iris
Zimmerman of Rochester Fencing Center.
December 13, 2009

MCSC: Business dealings create perception of conflicts

David Andreatta
Staff writer

In early November 2006, the Monroe County Sports Commission adopted a code of ethics that prohibits members of its
board from conducting business with entities in which they have a "direct or indirect financial interest."

Two months later, the commission cut a $2,000 check to a startup video production company owned by one of its board
members for a "Rochester Women in Sports" video.

The transaction was among a handful between the commission and companies or organizations in which board members
have a stake since the adoption of the ethics policy, according to a Democrat and Chronicle review of the commission's
check registry obtained under the Freedom of Information Law.

Records show the commission spent $3,295 on a board holiday party at the Doubletree Hotel in Henrietta, where a board
member is the general manager, and $2,500 on ice rentals at ESL Sports Centre in Brighton, whose manager is on the
board.

Judy Seil, who as head of economic development for Monroe County is the executive director of the commission,
described the business dealings as proper, and added that attempting to eliminate overlap between commission business
and the sports interests of board members was impractical. Board members are appointed by the county executive and
are unpaid.

"The people that need to be on the board need to be involved in sports, and you have a limited number of people to draw
from," Seil said.

"It comes down to asking, 'What's the best place for the event?' and I truly don't think anybody's putting money in their
pockets."

None of the transactions appeared to be discussed by the board, according to minutes of meetings, despite the
appearance of conflict and a procurement policy that requires the commission to obtain verbal quotes from three vendors
for purchases of goods and services costing between $501 and $3,000.

Experts on nonprofits said the dealings may not be illegal under the state's nonprofit law, which regulates business
between boards and board members, but that they reflected a conflict of interest that could leave the commission open to
charges of favoritism and poor practice.

"It shows a lack of awareness of how you're supposed to deal with conflicts, which is to put them before the board and get
disinterested and informed approval" for them, said Daniel Kurtz, a former head of the state Attorney General's Charities
Bureau and now a partner at Skadden Arps in New York City who specializes in nonprofit law.

"For these numbers, nobody's going to make a deal out of it, but there may be more substantial things here and, in
general, you develop bad habits."

Board member Rick Hager, a former television sports anchor who owns the video production company, said he raised the
idea of the video at a board meeting and that it was agreed his services would be used. The videos were handed out free
to participants in a sports festival for girls and a women's sports luncheon.

"I said, 'I can do this for you and produce this at a pretty low cost,' and they (the board) said, 'Yeah, that'll work,'" Hager
said.

Hager said he did not profit from the video, and that the commission's $2,000 contribution covered a third of the cost while
the rest was picked up by another sponsor. In addition, Hager said, production on the video began before the ethics policy
was in place.

"I don't think there was anything wrong with it," Hager said. "I doubt they (the commission) could have gotten the amount
of content and production value for any less anywhere else."

Board member Tim Elie, general manager at Doubletree Hotel, said he never benefited from any business dealings
between the hotel and the commission.

Financial records show the commission has paid Doubletree a total of $13,305 over five occasions since 2005, including
the commission board holiday party, a board meeting, and hotel rooms for a hockey tournament. Elie was appointed to
the board in 2002.

"As general manager of a hotel, obviously it is our intention to fill our building as much as we possibly can," Elie said. "I
don't view having events from the Sports Commission as anybody having done anything wrong."
Rebecca Tekula, executive director of the Wilson Center for Social Entrepreneurship at Pace University, said it is common
for members of a nonprofit board to have interests in related outside organizations. But the relationship can create
governance problems.

"If board members are tangled up with the dealings of their organization, it clearly can create a conflict of interest," Tekula
said.

Ray Maluta, a board member and manager of ESL Sports Centre, which has received $27,805 from the commission for
hockey events, did not return phone messages seeking comment.

Financial records for ESL Sports Centre show that Maluta saw his salary jump in 2006 by 51 percent, to $126,827 from
$83,923. The following year, 2007, his compensation fell to $89,825.

Asked about the sudden spike in pay, Jack Driscoll, president of the nonprofit that oversees ESL Sports Centre, described
it as a "bonus" for Maluta's efforts over the years in bringing events to the complex.

DANDREAT@DemocratandChronicle.com

December 13, 2009

MCSC assists wide variety of sports groups

David Andreatta
Staff writer

Sue Ludwig recalls the phone call from the Monroe County Sports Commission in 2006 that would put the local
competitive archery scene on the national map.

"They called up and said, 'We're thinking about bringing in a national archery event and we'd like to talk to you about
hosting it,'" said Ludwig, who with her husband runs Points to the Cross Archery, a small, religious-based archery club in
Fairport. "All I could do was laugh. I was like, 'Are you kidding?' The idea that we could win a bid was slim to none."

But USA Archery bit at the commission's bid proposal, and in February 2007 brought the National Archery Association
Indoor Championships to the Main Street Armory in Rochester.

The event drew 85 archers from around the country and solidified Monroe County as home to the event for at least the
next three years, due in no small part to the commission's last-minute fixes of unexpected glitches.

Ludwig described how the commission arranged to have the parking lot plowed hours before the competition began and
haggled with the armory's landlord to turn up the heat to make archers more comfortable.

"The Sports Commission is an excellent extension to small groups like us," Ludwig said. "They open doors where we're
not familiar."

Scores of local athletic organizations that have worked with the commission over the years hold the same sentiment, in
many cases insisting their event would have failed without commission assistance.

Mark Scuderi, president of the Greater Rochester Soap Box Derby, recalls how a $1,000 commission grant in 2001 put
his organization in the soap box derby history books.

The grant paid for half the rental of the Dome Arena in Henrietta, where the first All-American Soap Box Derby-sanctioned
indoor race was held. Subsequent commission grants of as much as $2,000 have since made the race an annual event,
drawing upward of 100 youngsters and their families to the area in the dead of winter.

"The Dome Arena is part of soap box derby trivia now," Scuderi said. "Without the Monroe County Sports Commission
there is no way we could have run the program. We don't bring in that much money."

Tim Giarrusso, director of the Head of the Genesee Regatta, credited the commission with helping resuscitate the annual
event after organizational troubles threatened to sink it last year. He said the commission contacted him after a news
article detailing logistical obstacles facing the regatta.

The commission loaned organizers buoys and split-time watches, arranged for portable toilets, helped obtain discount
hotel rates and promoted the regatta to more than 200 rowing clubs around the world, Giarrusso said.

The event attracted 1,013 rowers. This year, the event drew 1,470 — a 45 percent jump.

"They understood immediately that this event had a 19-year-history tied to the city of Rochester and said it was in their
charter to see what they could do to help," Giarrusso said. "They were very proactive."
For Marci Callan, a coach with the Fairport Area Swim Team and chairwoman of Niagara Swimming Inc., it was the
commission's help with incidentals that proved invaluable at the Niagara Swim Invitational in January 2008 that she
organized.

The commission sent out news releases, helped secure hotels and, in a pinch, provided lanyards for the credentials of
officials. The event attracted about 400 swimmers.

"There are a lot of little things that you can request that they'll help with," Callan said. "Anything we can get from a group
like the Sports Commission is very much appreciated."

DANDREAT@DemocratandChronicle.com

December 13, 2009

MCSC: To draw sports events, spending is part of the game

David Andreatta
Staff writer

When women's ice hockey star Cammi Granato visited Rochester in April 2007 to attend an annual
sportswomen's charitable luncheon, she enjoyed a couple of creature comforts.

The Olympic gold medalist and then-new mother treated herself to a $60 pedicure the morning of the
event and had her mother flown in from Chicago to help care for her infant son. The bills came to
$414, but Granato didn't have to pay them.

Monroe County picked up the tab through the county Sports Commission.

Pampering sports power brokers is part of the job for the commission, whose credit card statements
and other financial records, reviewed by the Democrat and Chronicle under the Freedom of
Information Law, show it has spent more than $150,000 on meals, alcohol, tickets to professional
sporting contests, airfare and hotels to draw athletic events to the area over the past five years.

The commission has budgeted $45,000 for hospitality and travel costs next year, roughly the same
amount it is on track to spend this year.

"Sometimes it's a basket of fruit, sometimes it's a bottle of champagne, sometimes it's a dinner,
sometimes it's a massage for somebody," said James LeBeau, whose Beau Productions runs the
commission. "If it costs me $1,000 to get a $100,000 event, I'll do that every day of the week."

Granato's visit paid off five months later when USA Hockey selected Rochester to host the 2009 Girls'
and Women's National Championships — a vote of confidence that commission officials attribute in
part to lobbying by Granato.

Unlike many of its counterparts around the country, the Monroe County Sports Commission does not
bid on events that command a bid fee. It recently stopped trying to bring a prominent fishing derby
here because the organizers asked for $25,000 just to apply, commission officials said.

In the months leading to the announcement in October that Rochester would for three years running
host the National Senior Games Championships — a multisport festival expected to draw in excess of
2,000 athletes — the commission spent thousands of dollars on dinners, banquets and hotel rooms
for Senior Games officials, credit card statements show.

The expenditures culminated a courtship that began four years earlier, and included a $1,449
banquet at the Hyatt Regency Rochester in June and a $334 dinner at Tapas 177 later the same
evening.

National Senior Games Director Ray Hoyt said eight cities bid and that the finalists were Rochester
and Buffalo.

"There was that persistence of saying, 'We really want to do something,'" Hoyt said of the Monroe
County Sports Commission. "You appreciate somebody that realizes, you know, 'We might be
overreaching here.'"

The schmoozing does not always pay off.

The commission spent years wooing Special Olympics officials in an effort to hold the 2010 National
Games here, only to be rejected in favor of Lincoln, Neb.

Financial records show the commission treated Special Olympics executives to a Toronto Raptors-
Cleveland Cavaliers preseason basketball game at Blue Cross Arena, a trip to Buffalo for a Buffalo
Sabres-Tampa Bay Lightning hockey game, dinners, cocktails, and flights to and from Florida, among
other perks.

"Hosting sporting events is becoming so competitive that if you're not reaching out to people out of
town the events will go elsewhere," said Scott Bell, the commission's marketing director.

The number of communities with sports commissions or local visitors bureaus with a sports division
has swelled from a handful in the early 1990s to more than 300 today, according to the National
Association of Sports Commissions.

"The number of sports commissions is growing because there's money there," said David Pate, an
associate professor of economics who helped start the sports tourism program at St. John Fisher
College. "There are a lot of dollars being spent on amateur sports, a lot of families spending on
traveling leagues and tournaments.

"In this age, when things are tight, communities are looking to bring the money in from outsiders."

DANDREAT@DemocratandChronicle.com