Several companies and the City of Rio Rancho are still owed money from Global Entertainment, the previous manager of Santa Ana Star Center.

In total, Global Entertainment owes $367,608.37, according to Rio Rancho City Manager James Jimenez, but Global Entertainment and the city differ on who owes the debts. The city says Global is responsible for debts owed to third-party contractors but Global says the city terminated its contract and it no longer has access to revenues or debts associated with the building.

Regardless of who is responsible for payment, several companies still haven’t received payment for work completed. One such company is NRG Services, a company who set up shows for Global Entertainment at the Star Center. The company is seeking $49,278.13 for work done between January 2008 through January 2009.

Barry Kohlus, the vice president for Encore Facility Management, a subsidiary of Global Entertainment, wrote an e-mail, dated June 2, to NRG Services office manager Debbie Maestas, telling her that his company didn’t owe the debt.

“The building revenues were placed in a bank account owned by the city, and the building’s bills were paid out of that account,” Kohlus’ e-mail read. “We no longer have access to the building revenues or the bank account. The city has taken over the management of the building. We don’t have rights to the building’s receivables, nor do we have control over the building’s payables. Further, nothing in our (no longer effective) agreement with the city gives rights to any third parties. Please understand that we simply managed the building, very similar to how an apartment manager manages the complex on behalf of the landlord. We no longer are the manager.”

Jimenez disagrees. He wrote Richard Kozuback, president of Global Entertainment, a letter on June 12.

“I am unable to agree with most of your assertions,” Jimenez wrote. “In that regard, we simply cannot lose sight of the legal reality that Global operated the SASC as an independent contractor on an at-risk basis. Under this arrangement, Global was responsible for the financial viability of the building, which included providing and creating working capital to operate the building effectively. As such, Global’s proposed set-off related to this newly stated theory of lack of initial working capital is unacceptable.”

Jimenez said that by not paying the debts, the city’s reputation is being tarnished.

“Similarly, GEC must resolve the remaining unpaid accounts payable soon as possible, otherwise the city will lose its credibility in the industry and continued operation of the SASC could be jeopardized,” Jimenez wrote in the letter to Kozuback. “The city has no ability to cover these debts. I have a strong sense of responsibility for protecting their interests and advocating on their behalf. These companies, when they provided you with goods and services, put their livelihood and trust in your hands and your actions have had a direct result on the city’s good name.”

Jimenez said the vendors are looking at the city for payment and that Global’s employees have completely misled at least two vendors as to Global’s responsibility under the contract.

“Rest assured any legal action taken against the city by Global’s creditors will result in Global’s joinder in any such lawsuit and a vigorous assertion of the city’s rights in this matter,” Jimenez wrote. “The city requests that Global pay the subject amount to the city and the city will in turn pay the vendors, releasing Global from any further liability.”

Jimenez said he looks forward to receiving a positive response from Global within 30 days.

The city paid some of the debts owed by Global in order to prevent the Star Center from going dark. Some of the bills the city paid include $50,514.92 to PNM, $13,184 to the City of Rio Rancho for water and wastewater service, $10,183.62 to Qwest and $9,151.37 to New Mexico Gas Company.

Global also owes the city roughly $367,000, with about $150,000 of that owed to local vendors.

Global Entertainment and its subsidiary, Encore Facility Management, ceased operation of the Star Center in February. The city took over the day-to-day management and operation of the city-owned center until Global Spectrum, a subsidiary of Comcast, took over the 6,500-seat arena in April.

Global had been operating the Star Center since it opened in October of 2006, but the city terminated the contract after the city deemed that the company continually failed to meet its contractual obligation to generate enough revenue to fully pay annual debt service payments on the center. The city has had to spend more than $2.5 million in general fund revenues for debt service payments.