Assembly presses operator for audited financials after internal audit flags missing ticket surcharges and potential $930,000 shortfall

Assembly Chair Christopher Constant convened a March 20 work session to continue review of internal audit 2026-0112 and to press the private operator of the Sullivan Arena and the Boki Dempsey facility to produce overdue audited financial statements.

City staff told the Assembly the auditor finished fieldwork in late December and that the city received the Sullivan 2023 audited financials only after the audit was completed; subsequent Sullivan years and audited financials for Boki Dempsey had not been delivered. Staff said they issued the operator a notice of default and received a response; the city then replied to that response. The operator proposed an alternative approach to producing audits in an email that staff had not yet digested.

Bill Faussett, representing city staff, told the Assembly the contract requires capital reserve deposits equal to 5% of audited gross revenues, and without the missing audited revenues the city cannot calculate those deposits. Using figures in the internal audit, Faussett said the contract “at this point” suggests the city should have received in excess of $930,000 that it has not received to date. The city has requested…