Arena shows profit -- a first -- for April

Global estimates June through September will be a money-losing period.
By DAVID SKOLNICK
CITY HALL REPORTER
YOUNGSTOWN -- The Chevrolet Centre had a profitable April, the first month since December 2005 that didn't show a deficit for the facility.
But April's income is only 52.6 percent of what Global Entertainment Corp., the Phoenix company managing the center, projected for that month.
Global had projected $54,017 in income for the center for April, but instead it ended the month with $28,412.
During its first seven months of operations, beginning October 2005, the center had expected $686,625 in income, but the actual income amount for that time period is $249,231. That is 36.3 percent of Global's estimate.
April events at the center included three concerts -- metal band Korn, rocker John Mellencamp and gospel singer Kirk Franklin -- as well as bull riding and Lipizzaner Stallions shows.
While the events were well attended, the costs for the shows left the city-owned facility with a minimal profit primarily because of fees paid to the entertainers and promoters.
One-quarter of estimate
Direct event income for April was $11,029, about one-quarter of Global's estimate for the month.
Also, the facility collected $18,586 in parking income from a $1.50 surcharge placed on each ticket. The parking income figure is about $20,000 less than budgeted for April. But the April amount makes up more than half of the $35,832 collected for parking for the center through its first seven months.
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 parking spaces. The city expected parking revenue to be $284,950 annually.
But the parking fee wasn't assessed on tickets to most center events during its first six months, and all Youngstown SteelHounds minor league hockey games. The city estimates it lost at least $175,000 in uncollected parking fees.
The center earned $33,646 in concession income last month, more than the $38,963 estimate for that category.
Lowering expenses
The center continues to reduce its expenses.
The April budget for salaries, operations and overhead was $185,549. The actual amount for those items last month was $120,890.
During its first seven months, the center spent $1,059,629 for those expenses, less than Global's estimate of $1,389,954.
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 had projected the center's profit at $645,221 between October 2005 and this September.
It is highly unlikely that the center will meet Global's projection, and it is quite likely it will show no profit or even a loss in its first year, Mayor Jay Williams has said.
Renegotiated contract
Because of that, the city renegotiated its contract earlier this month that would have Global pay half of the city's debt service for the center's first year. The deal, which won't be signed until at least July, also calls for Global to guarantee $600,000 annually to the city after the first fiscal year.
In exchange, Global would receive 40 percent of any center income over $600,000. The current formula has Global getting 20 percent after $300,000 is put into a future center capital needs fund and the debt service is paid.
Global estimates that the center will lose $34,361 this month, and that June through September will be a money-losing period for the facility.
Matt Hufnagel, the center's general manager, said facility officials are working to line up events through this slow time for indoor arenas.