Chevy Centre struggling financially

YOUNGSTOWN -- The Chevrolet Centre's profit during the first three months of the year is less than 6 percent of what the building's management firm had predicted.
It is the latest financial setback for the city-owned facility.
In its August 2006 projection for the center's 2006-07 fiscal year (October 2006 to September 2007), officials with Global Entertainment Corp., which manages the facility, said the first three months of 2007 would net a 458,564 profit for the arena.
But the center's income statement for the year's first quarter, released Tuesday, shows only a 27,440 profit. Global had expected January to March to be its most profitable quarter.
"They have not been able to generate the kind of returns they hoped they'd bring to the building," said Kyle L. Miasek, the city's deputy director of finance and its point man on the center. "Attendance didn't meet their expectations. Some of the shows didn't generate the amount they expected."
Low attendance
While there were a number of events at the center, low attendance at some is largely responsible for the smaller profit, said Thomas Sadler, president of Encore Facilities Management, Global's facility management subsidiary, and Tim McGrath, the arena's executive director.
The two declined to say which events had poor attendance and lost money.
"Attendance drives everything," Sadler said. "The attendance we believed we'd have for events, including those by major tenants, is not where we want it to be."
With less attendance at events, the center made less than projected in concession sales, catering and parking income.
The Youngstown SteelHounds minor league hockey team is the center's main tenant. The team's average attendance for the 2006-07 season was 3,610 a game compared with 4,067 the previous year, according to the Central Hockey League.
An ongoing financial dispute between Global and Blue Line LLC, the parent company of the SteelHounds, isn't helping matters.
The center lost about 175,000 this fiscal year in parking and facility fees because they aren't included in the price of a SteelHounds ticket, Miasek said.
Each fee is 1.50 and is included on other tickets at the center.
The center is refusing to pay money for the sale of club seats to Blue Line for hockey games played there. That amount is more than 150,000 for the team this past season. The matter remains unresolved although the two sides are talking, Sadler said.
Profit shortfall
For the first six months of the 2006-07 fiscal year, from October 2006 to this past March, the center's profit is 171,764. Global had projected a profit for those six months of 815,009.
Global's projection for a 629,953 overall profit for the fiscal year called for a loss of 185,056 between April and September. If those projections are correct, the center would finish its second fiscal year with a 13,292 shortfall.
"It's rather apparent we'll be challenged to get anywhere near that number" of a 629,953 profit, Sadler said.
Global officials had expected to finish the 2005-06 fiscal year with a 652,264 profit, but ended with a 23,653 deficit.
Even though Global had projected deficits for the last half of this fiscal year, Sadler said he expects an overall profit for those six months.
The initial third- and fourth-quarter projections were conservative because the company didn't know how successful it would be in booking acts for the center, he said.
Upcoming summer concerts
Last summer, the center was virtually empty. But that won't be the case this summer, Sadler and McGrath said. Of note are concerts by ZZ Top on Friday, the Doobie Brothers and Peter Frampton on June 17, Tool on July 1, and Stevie Nicks on July 3, they said.
The facility has held or has booked 109 events, including 21 music concerts, for this fiscal year compared with 87 during its inaugural year, Sadler said.
"We've come light years over where we were last year," McGrath said. "... It takes a little bit to convince promoters that Youngstown is a viable market. That takes time to build their confidence about that."
Regardless of a profit or a loss for the center, Global guarantees at least 600,000 to the city. If the center makes less than 600,000, Global will pay the difference out of its pocket to the city.
Global receives 12,500 a month to manage the facility, and received 169,972 in commissions for selling club seats, luxury suites and sponsorships during the fiscal year's first six months, the income statement shows.