Significant changes may be in the offing for the mostly free summer concert series at Canalside, as the nonprofit organization that runs it suffered a major decline in revenues that is threatening to drain its entire reserve fund.

Directors of Buffalo Place, the downtown business improvement district, began questioning the future viability of the popular series Wednesday, after Treasurer Robert Glaser reported that the nonprofit group is facing a $68,000 deficit as of August.

The bulk of the deficit is from a $246,000 shortfall in revenues from the concerts, after bad weather dampened attendance for the start of the series in June, and sales otherwise failed to meet projections.

As a result, Glaser projected that the agency would “probably” eat through its reserves by the end of the year. “We’ll be hand-to-mouth,” he said. “We’ll really have to think through what we want to do with the concert series.”

Buffalo Place directors suggested that options could include charging for the concerts, finding another group to partner with or seeking some funding from Erie Canal Harbor Development Corp., since Canalside derives a big benefit from the crowds drawn to the area by the concerts that Buffalo Place puts on.

Director Steve Fitzmaurice, chief operating officer of Seneca One Realty, noted that the state agency has the capital to invest in a permanent stage and even pavers to replace muddy fields. “The concert series has put us in a precarious position,” Fitzmaurice said.

Developer and board member Rocco Termini also noted that the concert series at the waterfront is a “drag on personnel,” distracting Buffalo Place staff from their focus on the downtown area. He even suggested a threat to move the concert series back to Lafayette Square if the state agency doesn’t help.

“Right now, there’s probably a lot of risk management we have to think through and question how much risk we want to take,” Glaser said.

Chairman Keith Belanger noted that this isn’t the first year of problems with the concert series, despite $400,000 in sponsorhips. The concert series originally was subsidized by Buffalo Place as a means of promoting downtown when it was held at Lafayette Square. But as it grew, it began spinning off more than $100,000 a year in added profits to support Buffalo Place’s other operations.

In recent years, however, it’s been contributing less and less, and now “will lead to another year of red ink,” Belanger said. He noted that people have other entertainment options, less spending money and less desire to purchase alcohol or other food and drink.

“Our business model isn’t viable, and we need to look at it again,” he said.

And if that’s not enough of a threat to the organization, Belanger noted that Seneca One Realty, the biggest property owner in the Buffalo Place district – and the largest payer of the organization’s “special charge” fee that helps fund its operations – will have an “empty building” by year end.

About 95 percent of One HSBC Center will be vacant, as HSBC Bank USA completes its move out of the tower by the end of this month and law firm Phillips Lytle LLP moves to the new One Canalside building by December. That means Seneca One Realty will have little revenue coming in to pay its share of the Buffalo Place charge, although the impact of the sharply reduced payment won’t hit the organization until January 2015 because of the way the city administers the fee.

“Next year will probably be the most challenging year for us in 20 years,” Belanger said.

Meanwhile, Belanger noted that Erie Canal Harbor Development, as a subsidiary of Empire State Development Corp., had decided to put its waterfront contracts out for bid.

It recently issued three separate requests for proposals for operations and maintenance, programming and events, and maintenance of the canals and ice rinks. The ice rink contract calls for capital investments by the winning bidder. The contracts would be for at least two years and up to five years with extensions. Bids are due next week.

Belanger said Buffalo Place plans to respond to all three, but will not agree to spend any money on capital investments because it can’t afford to do so. Still, he said, the organization should have an edge because it’s been doing the work for years, and experience and relationships will play as much of a role in the decision as price.

“We think the work we’ve done for them to date has made financial sense. It’s just the concert series that has been a drag for the last couple of years,” Belanger said.

Buffalo Place still could do the concert series on city property even if it doesn’t win the contracts, since the performances are outside the bounds of the proposals.

“No one’s in a better position than we are,” he said. “We’ll make sure that any response we put in is not going to put this organization at risk. It’s got to make sense financially.”