January loss is triple the prediction

Business at the center will pick up this month and in April, officials say.
By DAVID SKOLNICK
CITY HALL REPORTER
YOUNGSTOWN -- Chevrolet Centre officials had expected the facility to lose money in January, but the final results show an operating loss of more than three times the projected deficit.
Even so, city and center officials say the facility is heading in the right direction and it's more fair to judge the financial results over a 1-year period rather than month to month.
Center officials had predicted January would be the facility's worst month, with a loss of $56,042.
Financial figures recently provided by Global Entertainment Corp., the Arizona company that manages the city-owned facility, to Youngstown officials show the center lost $183,074 for January.
This happened even though gross ticket revenue for the facility was significantly higher than budgeted. The center had budgeted $263,000 in gross ticket revenue for January. The actual amount was $416,573.
Much of that increase can be attributed to three Disney on Ice shows added in early January because of ticket sale requests.
But in January, the center paid more in tenant charges -- $458,880 -- than its net revenue of $444,287. Tenant charges are the amounts paid by the facility to entertainment acts.
The facility made slightly more money in concessions, catering, parking income and club seat walk-ups. Overall, its event operating income was $106,460; it had budgeted $122,913 for January in that category.
Another category
The facility did poorly in a category named "other income" on its income statement and spent more on "indirect expenses" than budgeted. "Other income" includes sponsorship rights, suite income and club seat income. The Youngstown SteelHounds, the center's primary tenant, gets a majority of the suite and club seat incomes that it sells for hockey games.
With the money given to the SteelHounds and a poor showing on sponsorship rights, the center lost $49,379 in the other-income category. The center had budgeted a $14,960 profit for that category.
Global has been unable to sell four luxury suites since the facility opened in late October. The January statement showed no income for suite or club seat sales.
The center is close to selling one of the four remaining suites, and business should pick up if the facility is able to sign a contract to have AF2 (Arena Football League minor league) team play at the facility next year, said Kyle L. Miasek, the city's deputy finance director. Negotiations to bring AF2 to the center are progressing, he said.
The facility reduced payroll expenses in its executive, marketing and finance departments. But its overhead costs for January were $240,155; the budgeted amount was $193,915.
That increased overhead expense was largely caused by higher-than-anticipated energy costs, Miasek said.
"They didn't do so bad year-to-date, but what's hurting them is utilities," he said. "You can't focus on one month. They're not missing their mark by a mile."
Earlier months
The center's profit for December of $257,853 was $5,819 more than budgeted.
During the first four months of its financial forecast that began in October, the center has earned $362,397 compared with its budgeted amount for that time period of $483,609 -- about 25 percent less than projected.
Global had estimated in January the center would have a $634,221 net operating income between October 2005 and September 2006.
The city wants to make enough money from the center to pay the $767,000 annual debt service it has on the facility.
The facility may not meet its updated profit projection for the 12-month period, but Miasek is encouraged by increased activity at the center.
Center officials had estimated a $69,594 profit for February, but that included two concerts expected to turn solid profits for the center. There were no concerts at the center in February.
February's number is probably not going to be strong, Miasek said. But events scheduled in March and April should make those months more profitable than anticipated, he said.
"There are better things around the corner," Miasek said.
The center makes a larger profit on home and garden or craft shows than it does on rock concerts because there is less overhead, Miasek said.
Matt Hufnagel, the center's general manager, agrees that March and April will be busy. There is an event at the center every weekend this month.
"We can't do anything about what happened in January and February," he said. "We're focusing on looking forward. Some months are slower than others. We're budgeting numbers month to month, but you've got to look at the overall year. This is a marathon, not a sprint."
skolnick@vindy.com