Chemung County executive raises concerns about First Arena audit, vows to withhold funds

An independent audit of Elmira's First Arena raised concerns about a lack of financial accountability, adequate record keeping, and operating losses, and now Chemung County's executive is threatening to withhold funds until those problems are corrected.

But the chairman of the Chemung County Industrial Development Agency, which owns the arena, said he's not sure about some of the issues County Executive Christopher Moss has raised, and said Moss doesn't have the authority to unilaterally withhold tax dollars from the arena.

Following release of the audit report by Ithaca-based accounting firm Insero & Co., Moss sent a letter to IDA Executive Director Joseph Roman, raising concerns of his own about the operation of the arena, which has been beset with financial and management problems since it opened as the Coach USA Center in 2000.

In particular, Moss said he was concerned about payments made by the IDA or its subsidiary, the Chemung County Capital Resource Corp. (CCCRC) on behalf of Steve Donner and/or the Mammoth Sports Organization, the most recent management firm to run the arena.

"The concern is that IDA funds were utilized for the purpose of the for-profit business and that these transactions were possibly approved by the board," Moss wrote in his letter.

The IDA signed a five-year lease agreement with Donner in late 2021 to manage the arena and the Elmira Mammoth hockey team, but terminated that lease after only 18 months due to lingering fiscal and infrastructure problems.

The IDA has since hired a team of local professionals to operate the arena, with the hope of eventually selling it to a private entity after the infrastructure is upgraded and finances are stabilized.

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Moss said he's requested an assessment of all record keeping involving the arena, IDA and CCCRC by the New York State Authorities Budget Office to ensure all transactions fall within the regulatory parameters of an industrial development agency's scope.

But IDA Chairman Mark Margeson, who also chairs the county legislature, said he isn't certain what specific payments Moss is referencing.

"When Donner left, we were left with a gas and electric bill. It was in the name of the IDA," Margeson said. "We had to pay the bill. Donner was supposed to do that. (Moss) indicated to us he doesn't want any previous bills left by Donner to be paid."

At a news conference Margeson and Roman held March 26 to discuss the arena audit, Margeson said it's a common misconception the arena is supported by tax dollars, noting the only public money that has gone into the arena is from the American Rescue Plan.

Money the IDA has used to make up for operational losses has come from funds the agency "has gleaned from business opportunities that they brought into the community," Margeson said.

But Moss disputed that claim, noting in his letter that since 2019, the county budget has allocated $1 million to the IDA for operational purposes, including $200,000 for 2024.

"Additionally, the IDA has received hundreds of thousands of dollars in American Rescue Plan funds, which are tax dollars from both the county and the City of Elmira," Moss said. "Until such time as all the issues in this correspondence have been adequately addressed, no additional scheduled payments (organizational funding) or ARP funds will be released."

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Margeson said he plans to present the IDA board with an agreement he reached with an accountant who will help the agency modify its processes at the arena to address the issues raised by the audit.

But he's not sure what's going to happen in the meantime.

"There's still money left, $160,000 for equipment, that hasn't been released. Does Moss have the right not to release the funds? No," Margeson said. "I don't have the answer where this will go. We're all on the same team. We should be able to work together."

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This article originally appeared on Elmira Star-Gazette: Chemung County executive vows to withhold funds post First Arena audit