ROCKFORD The city will save millions of dollars as it transfers operation of its Coronado Performing Arts Center to a private management firm. Equally significant, perhaps even more so, is the projected dramatic turnaround of the citys primary revenue source for economic development initiatives.

The citys Redevelopment Fund, awash in red ink, has for years struggled to ignite meaningful economic development. In turn, the city has leaned on its few other tools to spur development, most notably tax increment finance districts. The city has 29 such districts, many of which are underperforming and running deficits of their own.

But with management of the Coronado falling under the Rockford Area Venues and Entertainment Authority, combined with other city budget decisions, the Redevelopment Fund can reclaim its purpose and potential.

Rockford has no shortage of economic development needs. The citys economy relies heavily on manufacturing and leaders are trying to grow a firm foothold in the aerospace industry. Mayor Larry Morrissey is fond of describing plans for a downtown riverwalk and a whitewater kayak course on the Rock River. The Amerock building downtown, and the city-owned Barber-Colman industrial property a few blocks south, are considered by many as prime, though costly, sites for redevelopment. Suddenly, Rockford may have the money to tackle some of this stuff.

Aldermen are asking themselves how the city should spend it.

We dont want to repeat our mistakes with the Redevelopment Fund, said Ald. Venita Hervey, D-5. We need to build a strong guidance policy. Thats what we need to decide and thats what Im going to be proposing to the City Council.

Purpose drifted after creation The Redevelopment Fund, fed by hotel, restaurant and liquor taxes, was established in 1978 to first cover any operating shortfalls at the former MetroCentre, then to aid redevelopment downtown. But in the intervening years, aldermen didnt uphold that guideline. Pressure to tap the fund for all sorts of city needs intensified in the 1980s, following Rockford voters decision to rescind the citys home rule powers.

The loss of home rule left the city with fewer options to pay for economic development and cultural initiatives. The Redevelopment Fund became an easy target. Only 40 percent of Redevelopment Fund cash generated since 1978 actually made it to the MetroCentre by 2009.

Then, three years ago, the arena faced a financial crisis, and aldermen stopped the bleeding by expanding its public subsidy while taking steps to correct decades of Redevelopment Fund mismanagement.

Today, a new entity governs the arena, Davis Park and the Coronado. The RAVE authority, governed by a public board of directors, pays private venues management firm SMG $200,000 a year to operate the three facilities. The combined city subsidy to those venues has shrunk and is projected to shrink further. The city last year reworked its contract with the Rockford Area Convention & Visitors Bureau and as part of that deal and is sending less hotel tax revenues to the bureau than it previously did.

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Coronado consolidation helps free up cash for Rockford's growth