Board expected to OK new pact with Global

The board is to also award contracts for the demolition of 50 structures.
By DAVID SKOLNICK
CITY HALL REPORTER
YOUNGSTOWN -- The city's board of control is expected Thursday to approve a restructured financial contract with the company managing the Chevrolet Centre.
The city and Global Entertainment Corp., the Phoenix company managing the center, came to an agreement in principle on a new deal in May.
Global officials signed the deal last week, and the city's board of control is expected to do the same Thursday.
The city sought to renegotiate the management contract for the facility earlier this year when it became apparent that Global had overestimated the center's profit.
A year ago, Global estimated the city-owned facility would have a $1.15 million profit for 2006.
Global updated the center's budget in January, projecting a $645,221 profit between October 2005, when it opened, and this September. The center has a profit of $243,252 through its first eight months.
Global and city officials acknowledge not only will the center not hit its projected profit figure, but the possibility exists it won't make any money in its first 12 months.
Terms of new contract
The key terms of the new contract are:
Global would pay half of the city's debt service for the center this fiscal year. The city's debt service this year is about $767,000. The city borrowed $11.9 million to help fund the center's construction.
Should the center lose money in any fiscal year, Global would pay the shortfall.
Global would guarantee $600,000 annually to the city after the first fiscal year.
Global would receive 40 percent of any profit over $600,000. That replaces the old formula that has the center's first $300,000 in profit go into a reserve fund for future capital needs and expenditures. Then, any money over $300,000 goes toward paying the city's debt service. If any money is left, Global is to receive 20 percent of it.
Global would get a $12,500 monthly management fee instead of receiving 4 percent of operating income.
Global still gets 15 percent commissions on the sale of luxury suites, club seats, sponsorships and other items. The company was expected to receive about $200,000 for this fiscal year. But because it's responsible for half of the city's debt service, it probably won't see that money, city officials say.
Also Thursday, the board of control will vote to officially acknowledge an agreement between Global and Insight Entertainment LLC, the owners of the Mahoning Valley Thunder, an AF2 indoor football team that will play its home games at the center beginning next year.
Other issues on agenda
The board will also consider Thursday:
Awarding two demolition contracts to Siegel Excavating of Edinburg, Pa. Each contract calls for the demolition of 25 houses, one group on the northeast side and the other on the southwest side of the city.
Siegel beat out four other companies on both contracts with bids of $71,000 and $64,000. Siegel also was awarded a demolition contract for 25 houses scattered throughout the city in May.
The Siegel contracts are part of a $1.27 million city program to demolish about 300 blighted structures, mostly residential houses, this year.
Having Ronald Cornell Faniro Architect, a Youngstown company, design and supervise the remodeling of city hall's first-floor lobby area for a cost not to exceed $6,700. The company is developing design plans for Williams' office, on the first floor, for about $11,000.
The mayor's office hasn't been updated in about 40 years.
Approving a 75 percent, 10-year enterprise zone personal property tax abatement for Youngstown Pipe & amp; Supply LLC.
The company wants to relocate some of its operations and nine employees from North Jackson and Boardman locations to the United Foundry property at 219 S. Phelps St. Pipe & amp; Supply is a steel processing and metal distribution business.
The company is investing at least $612,000 in the city location, and plans to add nine full-time workers over the next three years.
The tax abatement would save the company $110,886 over the next 10 years. The company would pay $35,680 in personal property taxes over the next decade, and its employees would pay $141,708 in city income tax, according to its application for the abatement.
skolnick@vindy.com