Race for the Rent

Looking for some extra revenue in these tight times, many athletic departments are hanging a "for rent" sign on their facilities. Here's how to maximize the profit.

By Mike Phelps

Mike Phelps is an Assistant Editor at Athletic Management. He can be reached at: mp@MomentumMedia.com.

On the campus of Vanderbilt University, Memorial Gymnasium serves as the proud home of the school's men's and women's basketball teams. It's where the men have won more than 78 percent of their contests, the women have been victorious 81 percent of the time, and "Memorial Magic" happens. According to legend, once the facility was completed, the basketball gods were so pleased that they slipped some magic dust in the overhead rafters, helping Vanderbilt to numerous late-game victories.

But lately--magic dust notwithstanding--the facility has been so much more than a place to play basketball. In the past year, the gym has also hosted an HBO-televised boxing card, the Southeastern Color Guard Circuit Championships, and even a night of professional wrestling.

While these aren't likely the types of events envisioned by the facility's creators when it was built in 1952, they're becoming increasingly necessary as high schools and colleges search for new revenue streams in a tough economic climate. "We want to maximize our revenue potential, so we're actively seeking opportunities for groups to rent our facilities," says Brock Williams, Vanderbilt's Assistant Vice Chancellor for Facilities and Game Management. "It's important to look at how you can use your facilities 365 days a year, rather than just a handful. We have a great basketball arena--what else can we do with it?"

The thinking is similar at Centerville (Ohio) High School. Since installing an artificial turf field three years ago, the athletic department has brought in revenue by renting out its stadium for a wide variety of events, including state high school competitions, youth track meets, and charity fundraisers.

"The opportunity to rent wasn't the impetus behind installing the new turf, but we certainly hoped it would bring in additional income," says Athletic Director Ron Ullery. "Once the turf was in, I drew up a rental policy for all of our facilities--not just the stadium--because we knew there would be interest."

Renting out your arenas, fields, and stadiums, however, isn't as easy as just opening the gates and collecting checks. You need to make sure your facility is marketable, find groups to rent to, and negotiate deals. You also need to develop a contract and follow through to make sure every event goes smoothly.

MAKE IT MARKETABLE
Renting a facility is no different than any other business transaction--you have to provide a desirable product that piques consumer interest. In this case, the product is your school's facility. How do you make it attractive to potential renters?

The first step is to understand its uniqueness. Even if you don't see anything particularly special about your gym or field, it's probably one of only a few in your community. If it is in good shape and you show a willingness to partner with other groups, it can be home to many events that otherwise might go elsewhere or not happen at all.

Whittier College, a small school nestled in the southeast corner of Los Angeles County, found that out after installing new turf in its stadium last summer. Rental business has grown steadily over the year and, in the upcoming months, the school will host a football camp sponsored by Nike and the Army Strong Fiesta Bowl, a high school football all-star game. Athletic Director Robert Coleman says he keeps getting the same type of response from renters: "Wow, this place is great. I didn't know it existed."

"We're so busy running our athletic program, we don't have time to market the facility," Coleman says. "But when one group comes here and has a positive experience, they tell someone else, and eventually more and more people call to ask if they can use the facility."

In Maryland, the Annapolis Area Christian School has had similar success renting out its Kilby Athletic Center, which houses an indoor turf field, a two-floor gymnasium, and a full second gym. "We have a product that not too many people have," says Assistant Athletic Director Ken Lucas. "We can take any kind of outdoor field team and bring them indoors whenever there's inclement weather. And we can run three basketball games simultaneously."

Annapolis Area Christian has used two very simple strategies to market the space. "When we completed construction two years ago, we decided to conduct an open house, just to get the word out there," Lucas says. "We invited the community to come by and see the new facilities for themselves. We also keep a page on our school's Web site with photos of the facility and easy-to-find contact information for anyone who wants to rent."

Hummer Sports Park is owned by the Topeka (Kan.) Unified School District 501 and consists of a football stadium with an eight-lane track, soccer stadium, two baseball fields, two softball fields, and a natatorium. Officials there also use the Web to get word out about rental opportunities. Its Web site has detailed information on how to book an event at the park, who to contact, and a handful of photos of each facility, so a potential renter knows exactly what they're dealing with.

"Anyone can use our Web site to look at the stadium, look at the entire park, and get a feel for what we're about," says Rick Benke, Manager at Hummer Sports Park. "Plus, after every event we host, we update the site. You'll never find old news there."

They also make sure the facility looks fabulous to potential renters. "We try to keep everything clean and in pristine shape," Benke says. "The fields are trimmed, mowed, and edged. The baseball diamonds are groomed and cut perfectly. The locker rooms and dugouts look great."

Vanderbilt markets its facilities more aggressively, advertising in trade publications. "I think people look at trade magazines extensively for places to hold their events," Williams says. "They look for a facility that can accommodate crowds and vehicular traffic, as well as a venue that is comfortable, has good sightlines, and has a positive atmosphere. That's what we try to promote when we advertise."

Williams says another part of marketing is being creative in the groups you target and rent to. Sure, there will always be local recreation departments, AAU teams, or other youth sports organizations, but what about the non-traditional groups? "I'm open to just about anything," he says. "I get all kinds of requests, and I'll consider every single one. Some are way out there and I can't accommodate them. But many are possible, such as concerts or high school band competitions. I've even been approached by a group that wants to do a fashion show."

Annapolis Area Christian rents to a Boy Scout troop every year and to a pair of churches. "We've had an inquiry from a couple that was getting married and wanted to have their reception here," Lucas says. "We've tried to be creative and find new uses for our space that go beyond traditional boundaries."

MAKE A DEAL
As anyone who manages a facility knows, overseeing its use for just your own school is a tough job. Adding outside groups to the mix requires another level of management. That's why it's critical to think through the logistics up front and put policies and procedures in writing.

To start, be certain you have the support of your administration and the surrounding community before taking on renters. Vanderbilt's campus is located adjacent to a quiet neighborhood and it was important to alleviate any concerns that the school's arena would turn into a loud rock and roll venue.

"I made sure to talk to others about this far in advance," Williams says. "I laid out the pros and cons regarding various issues, and we had open discussions."

A policy should then be implemented establishing who has first rights to the facility. At most schools, in-house activities receive priority. "I'll never remove one of our school groups, no matter who else wants to rent," Ullery says. "That may cost us sometimes, but I think it's the right way to do it."

Figuring out a clear and consistent procedure for pricing is next. At Centerville, Ullery's plan categorizes potential renters into five groups. The first two groups, Centerville community organizations whose activities are student-related and non-profit community groups benefiting a charity, community project, or school, are not charged for facility rentals. Ullery starts charging at the third group, which includes any community organization within the school district limits that wants to hold a fundraiser benefiting itself. Up one more level, with an increased charge, is a community group whose main function is making a profit, such as a local business. The final group, receiving the maximum charge, is any organization from outside the school district's borders.

Another imperative is constructing a contract to be signed by any group using the facility. The contract should be developed by your school attorney and insist on proof of insurance from the renting group.

From there, logistics should be discussed case by case, depending on the group's needs and what you're willing to supply. The key is reviewing everything with the renter.

"Once we determine the dates they want to rent the facility, it's a matter of how much supervision is needed and who's going to be in charge of the cleanup of the facility," says Ullery. "We'll also go over all the guidelines for what areas of the stadium they have access to, such as the press box."

"You have to be very specific, because on the day of the event, you don't want someone to look at you and say, 'I thought you were going to get us 50 chairs,'" Coleman says. "Make sure they put in writing exactly what they want and make that part of the contract."

Coleman also alerts his campus security and the Whittier Police Department of any events at his facility, so it is properly covered and traffic problems can be alleviated. And he reviews any charges beyond use of the facility, such as custodial help, displaying video on the scoreboard, or access to tents and tables.

Williams says he has learned to ask a lot of questions. "If the renter says they're going to bring in a lighting system, I ask them for more details on it so I can figure out whether our ceiling can handle the load," he says. "If you don't ask enough questions, you can get caught in a tight situation real quick: You had an expectation, the renter had another expectation, but you never made those clear to each other.

"I've never had a problem with anybody when both sides were up front, honest, and to the point," Williams adds.

Another good idea is to have any interested group make an on-site visit prior to signing the contract. "I don't want someone to simply say, 'I've seen your facility online. It's great,'" Coleman says. "I want them to come here and understand what they're really getting. We need to meet face to face."

This is also a good time to give renters a lay of the land, so they'll know where everything is when it comes time for their event. "I'll take them on a quick tour of the areas that will affect them," Lucas says. "I want to make sure they're familiar with the locations of restrooms, janitorial closets, entrances and exits, and things like that."

MAKE IT HAPPEN
Prior to Vanderbilt's hosting of the HBO-sponsored boxing card, Williams says he didn't sleep for two nights. He didn't anticipate anything going wrong, but kept going over checklists in his head, making sure everything was thought through. In the end, the event went off without a hitch, but Williams believes it's important to be prepared for anything that could happen, no matter how unlikely.

"You may have a generator fail or another electrical problem," he says. "So you have to be prepared to address those things. You also have to keep a smile and a sense of humor about everything and move forward."

Most schools have at least one representative present when a facility is being rented. "Depending on the size, we'll always have one to three supervisors on hand," Coleman says. "The biggest thing is having someone here on time, ready to work hard. You don't want the renter to get here and have the gate locked or the lights out. They're trying to run their event, so we should be taking care of all the other stuff."

Benke tries to take care of all the little things that ensure the group has a positive experience--and decides to rent again in the future. "We always provide water for the teams that play here, whether it's on the track, in the baseball dugouts, or on the football sidelines," he says. "We put team names on the locker room doors and make sure we have carts by the busses to help bring equipment down to the fields."

Taking care of guests doesn't have to be a lot of work, though. "We actually let our renters set up most things themselves," says Ullery. "They are happy to come in, put the nets on the field, and leave the place the way it was. I think when people drive into the stadium, they realize it's well taken care of, so they want to do the same thing in order to keep coming back."

AS A BONUS
While the main incentive to rent out your facility might be based on dollar signs, there is another benefit. "It's been free advertising for the school," Lucas says. "You get people on campus who would otherwise have no reason to come here. From renting, we've gotten some interest in our school from parents who didn't know we were here."

The secondary benefit theory has been working on overdrive for Vanderbilt during the past year. "I can't put a price tag on the exposure we got for the boxing matches," Williams says. "Time and time again on the television broadcast, the announcers said, 'We're here at Vanderbilt University in Nashville, Tennessee.' There may be a kid half way around the world who's never heard of Vanderbilt, but now is interested in checking it out. I see that as a huge positive.

"But then again, we wouldn't be renting our facility unless we were making money," he continues. "With this economic crisis, anything that helps pay the bills is good."

Sidebar: RENTING TO THE STARS
While renting out your facility to many different groups is a great idea, partnering with one renter can sometimes work even better. Bedford (Ohio) High School has entered into an agreement this year with the Cleveland City Stars, a professional soccer team that competes in the United Soccer Leagues' First Division, one notch below Major League Soccer.

The City Stars gain a home at Bedford's Bearcat Stadium, which provides seats for about 5,000 spectators, a two-level press box, and a 520-square foot scoreboard. Bedford gains cash and a relationship with a professional team.

In negotiating the deal with the City Stars, Bedford Athletic Director Sean Jackson thought about several different options. The final contract gives Bedford 75 percent of all concession income during games plus a rental rate, while the City Stars get to keep their own ticket revenue but are responsible for security, police coverage, and a stand-by ambulance. Children in the city will be able to attend free soccer clinics, and students in the school district will be eligible for incentives, such as recognition during games for improved grades or superior attendance.

The agreement also stipulates that Bearcat Stadium is first and foremost a school facility. "We have soccer and football at three levels and only so much field space," Jackson says, "so there are some days that the City Stars can't practice here. They fully understand that our kids come first, and their time comes second. It works for them because they want to have a connection with our community."

Jackson sees the benefits of the deal extending far beyond dollars and cents. "There's also the publicity of having a professional soccer team here," he says. "A lot of people don't know about us, so this is a way to market our school."