Sealing the deal on Chevrolet Centre

The city and county will make a 'good-faith effort' to buy GM vehicles.
By DAVID SKOLNICK
CITY HALL REPORTER
YOUNGSTOWN -- City officials said they could have sold the naming rights to its convocation center months ago but got a better deal by waiting.
City, convocation center and General Motors officials announced Thursday the facility's new name is the Chevrolet Centre.
The city's board of control needs to sign a finalized contract with GM, but Finance Director David Bozanich said it is a three-year deal with 17 years of annual options.
GM, which builds Chevrolet Cobalts at the nearby Lordstown complex, will pay $175,000 in cash annually and provide $25,000 worth of vehicle use, he said. The $25,000 is for the lease of four GM vehicles annually by the facility, he said.
The center's management firm had budgeted $1 million to be paid by the sponsor to the center over five years for the facility's naming rights, or $200,000 annually. Also, the center's budget included a $10,000 annual expense for vehicle costs.
Additional revenue expected
Besides the $200,000 in cash and car leases, Mayor George M. McKelvey said he expects the GM partnership to add more than $300,000 to the Chevrolet Centre's profit margin.
Though not completely specific, McKelvey and Bozanich said they anticipate the additional revenue would come from GM's promoting the facility in advertisements, and the company's workers' buying tickets to arena events, enticing them at times with employee discounts. Also, GM could hold events and/or meetings at the center.
The city's board of control will sign a final contract by the end of the year, said Bozanich, a board member. The contract can be renegotiated, and either party can get out of it by giving a year's notice, he said.
Waited for good deal
The city would have had to settle for less if it took a naming rights deal before the facility opened, Bozanich said.
That's "because of the drama" at the beginning of the center project that gave it a "negative perception" with people, he said.
That "drama" included fighting for months between city officials and members of a convocation center board over control of the facility, and a failed attempt to divert the $26.8 million in federal money the city received for the project toward downtown redevelopment.
But that negative perception changed when the downtown arena opened last month and hosted concerts and hockey games, Bozanich said.
"We needed time for people to see the place first and to see what a success it is," he added.
GM was somewhat cool to obtaining the facility's naming rights until recently.
This past summer, city and center officials were in talks about naming rights with DaimlerChrysler and KeyBank; GM was interested, but not as much as the two other companies.
Herb Washington, owner of the Youngstown SteelHounds, a minor-league hockey team that plays its home games at the center, said he and Jeff Kossow, the arena's executive director, urged local GM officials about five weeks ago to get back into the naming rights sweepstakes.
Jim Graham, president of United Auto Workers Local 1112 at the facility's assembly complex, said GM workers "didn't want to see another nameplate on this facility. ... Don't ask about Chrysler or Toyota on this facility."
To have the Youngstown facility named after another company "would be a travesty," he said.
Graham said that there may be some grumblings from a few GM workers about the money spent for the center's naming rights, especially in light of the automaker's significant financial problems, but that their concerns would be misguided.
"GM is in the business to make money and the way you make money is through advertising," he said. "If you don't make money GM fails and this Valley fails."
Having the Chevrolet Centre name on the facility, and the naming of the 1,000-vehicle plaza parking deck, owned by USA Parking located near the post office and the facility, as GM Park Place will be wonderful advertising opportunities for the company, Graham said.
"We'll have Chevrolet and its bow tie [trademark symbol] on the building," said John Donahoe, Lordstown GM complex plant manager. "We'll have ads on sections of the ice and on signs inside the center."
The outdoor Chevrolet Centre sign at the facility and GM Park Place sign at the deck will be installed before the end of the year, Bozanich said.
'Best effort' to buy GM cars
As part of the deal, the city and Mahoning County will "make our best good-faith effort" to buy GM vehicles through state purchasing contracts for their fleets, said McKelvey, who estimated that number could be as high as 1,000 vehicles.
"If there's any time to step up and help GM become a profitable venture, it's now," the mayor said. "We'll make our best effort to purchase GM vehicles. When we go out for vehicles, the first ones we'll look at are Chevrolets."
The city and county have used Ford vehicles for years.
The center's success also is helping persuade corporations to buy luxury suites, said Matt Hufnagel, the facility's director of sales and marketing. Of the 24 suites at the center, 21 have been sold including a few in just the past few weeks, he said.