March totals show a loss

March was expected to be a strong month for the center.
By DAVID SKOLNICK
CITY HALL REPORTER
YOUNGSTOWN -- Through its first six months, the Chevrolet Centre has made about 35 percent of its income goal with the city-owned facility losing $25,353 in March, its third consecutive money-losing month.
Financial projections from Global Entertainment Corp., the Arizona company managing the center, had estimated a $632,608 profit from October 2005 to March. But financial figures released Wednesday show that the center's profit is $220,819 for that period.
Mayor Jay Williams said if this trend continues, the facility could see no profit or even a loss in its first year of operations. Global's 12-month projection between October 2005 and this September, released in January, estimated the center's profit at $645,221 for that time frame.
The city wanted enough money to pay the $767,000 annual debt service it has from borrowing $12 million to help fund the center's construction. With that out of the question, city revenue will be needed to make up the shortfall, Williams said.
Global projects a $12,611 profit for April through September, what Matt Hufnagel, the center's general manager said is a slow period of the year for indoor arenas. If that profit projection is correct, Global won't come close to its 12-month profit goal.
"We're going to do everything we can to reach our profit goal," Hufnagel said. "Time will tell as far as profits are concerned."
Mayor sets deadline
Global has until April 28 to provide the city with solutions to this problem, according to Williams, who said he is very disappointed with the financial results of the center.
"If they don't present realistic answers, we'll offer suggestions," Williams said. "If they don't put ideas on the table, we will."
Williams declined Wednesday to say what the city has in mind.
Global and city officials had said previously that March would be one of the facility's strongest months because events were scheduled there for every weekend in that month. Fifteen events were held in March.
Global estimated March's profit at $79,407. Instead, the month showed a loss of $25,353. The most glaring problem for the month was event operating income, which includes gross ticket revenue, rental income, facility fees and parking income. The figure was estimated at $282,035, and the center collected $73,983.
The failure to access parking fees continues to haunt the facility. The city and Global signed a 10-year contract in October 2005 to pay $210,000 annually to USA Parking Systems to use more than 2,000 spaces at parking decks and lots throughout downtown for those attending center events. At the time, city officials bragged that the center would make that money back and more through a $1.50 fee on each ticket. Global estimated the fee would generate $284,950 in gross revenue.
But the parking fee was assessed on only a handful of events at the center until Kyle L. Miasek, the city's deputy finance director and its point-man on the facility, discovered the problem. The fee was added to all events except Youngstown SteelHounds minor league hockey games beginning in March. The contract between Global and the SteelHounds ownership doesn't include the parking fee on game tickets.
What happened
Through its first six months, the center budgeted $105,350 for parking fees. The center has actually collected $17,247 in parking fees in the first six months with $10,747 of it in March.
The center lost about $40,000 in parking fees for SteelHounds games last month, Miasek said.
Also, Global failed to collect a $1.50 "facility fee" for every SteelHounds ticket not bought at the box office on game day, Miasek said. That resulted in about $20,000 in lost revenue for the center last month, he said.
When preparing its financial outlook, Global also failed to consider the 3 percent to 4 percent fee paid to credit card companies when tickets are bought with those cards, Miasek said.
Global receives $156,000 a year to run the center. This does not include the salaries or benefits paid to Hufnagel and other employees.
On the positive side, the center sold a luxury suite last month for $20,890 when it had budgeted nothing for that. Also, it earned $46,050 in sponsorship rights compared with its budgeted amount of $42,143.
City officials have said for weeks that a final contract with General Motors over the naming rights of the Chevrolet Centre was imminent. To date, the contract hasn't been signed. When it is, the center will receive $150,000 from GM. The company paid $25,000 for the naming rights with the rest coming after a contract is finalized.
The center was able to drop its salaries, operational costs and overhead expenses, most notably utilities, below its budgeted amount in March. The total for those items last month was $112,784 compared to the expected cost of $188,338.
skolnick@vindy.com