Chevrolet Centre's losses for May are less than expected, official says

The naming rights contract still hasn't been signed.
By DAVID SKOLNICK
CITY HALL REPORTER
YOUNGSTOWN -- Though the city-owned Chevrolet Centre lost money in May, the month is being hailed as a success because the shortfall was significantly less than anticipated.
The facility lost $5,979 last month. Global Entertainment Corp., the Phoenix company managing the center, had projected a May loss of $34,361.
May to August are slow months for indoor entertainment facilities such as the Chevrolet Centre, said Kyle L. Miasek, the city's deputy finance director and its point man on the facility.
The center's financial figures for June and July will not be good, he said. Global's projections for the month are for a $17,616 profit in June and a $14,235 loss in July.
But no events took place inside the arena this month, and only two -- a concert by hard rock band Shinedown and Kidzfest 2006 -- are currently on the center's July schedule.
In May, the center had four Le Grand Cirque shows, six Disney Magic shows and a mixed martial arts event.
The events generated $16,912 in income for the facility compared with the $37,062 predicted.
Other shortfalls
The center also fell short of the budgeted amounts for parking and facility fees. It estimated $17,000 and $38,500 for parking and facility fees, respectively, and brought in $11,150 and $30,610, respectively, in those categories last month.
It also did poorly when it came to concessions, bringing in $3,197 when plans predicted $15,723 for that category.
But the facility made $15,388 in catering for luxury suites last month. It had figured on just $902 for that category. It is also reduced its operations and overhead expenses for the month.
The $5,979 loss, in its proper perspective, is a great month of May for the facility, Miasek said. May is traditionally among the worst months of the year for indoor facilities, so a small loss is a step in the right direction, he said.
Global's financial estimates had May as the second worst month for the center, with January being the worst, in its budget of the facility from October 2005 to this September. Compared with May, the center lost more money in January, February and March. Global had estimated five-figure profits for the latter two months.
With the new AF2 (Arena Football 2) league team playing at least two home games in May 2007, the center should have a decent May next year, Miasek said.
Made less than predicted
During the first eight months of its existence, beginning in October 2005, the center made $243,252, or 37.3 percent of the $652,264 it had predicted it would make for that time period.
Because of losses estimated for July and August and modest profits predicted for June and September, Global had expected to have a $645,221 profit for the center for the 12-month period ending in September.
The city wanted the center to generate enough money to pay the $767,000 annual debt service it has from borrowing $11.9 million to help fund the center's construction. Global and city officials say that goal isn't going to be reached.
The city renegotiated its contract in May and would have Global paying half of the city's debt service for the center's first year. The tentative deal also calls for Global to guarantee $600,000 annually to the city after the first fiscal year.
The deal is expected to be approved sometime this summer.
In exchange for the financial subsidy it will provide, Global will receive 40 percent of any center income over $600,000. The current deal has Global getting 20 percent of any income over about $1.1 million.
Sale of luxury suites
The center recently sold a 10-seat luxury suite, and a company that had a 12-seat suite is upgrading to a 14-seater, Miasek said. There are four luxury suites still available.
The city is still working toward finalizing a contract with General Motors on the naming rights of the Chevrolet Centre, Miasek said. An announcement on the naming rights was made in November 2005, but a contract still remains unsigned.