Mayor right in not rushing to sign arena-related pact

Drive by the Chevrolet Centre in downtown Youngstown any evening this month and you’ll find the silence deafening. The city-owned, $45 million facility has a dark September.

Why? That’s one of the questions Mayor Jay Williams and other city government officials should be asking executives from Global Entertainment, which has been operating the sports and entertainment complex for the city since it opened two years ago.

Conventional wisdom says no events equal no revenue, and no revenue equals a ledger dripping red ink. But there’s nothing conventional about the Chevrolet Centre. Given the number of events that have been money losers, perhaps having a month that’s dark is a good thing for the bottom line.

We are well aware that arenas, in general, are not profitable, which is why we opposed the project when no private investor stepped forward to match the $26.8 million federal grant that had been secured by then Congressman James A. Traficant Jr.

However, former Mayor George M. McKelvey and members of city council decided that such a facility would ignite a downtown revival.

Two years later, there has been increased activity in the central business district, but the restaurants, bars and other entertainment venues depend on the Chevrolet Centre to bring new visitors to Youngstown.

That’s why a month without events is cause for concern. It’s a timely subject for Mayor Williams, Deputy Finance Director Kyle Miasek and others city officials to discuss with Global Entertainment higher-ups.

Status quo unacceptable

When it was revealed last month that the center had lost $205,215 in the period April to June, Miasek, who is the administration’s point man for the arena, made it clear to Global that the status quo was unacceptable.

The Arizona-based company needs to explain why its revenue projections have been so wrong, why some events have been huge successes while others have flopped, and what its marketing analysis shows with regard to the type of activities residents in the region will support.

And, we renew our call for a study comparing the Chevrolet Centre with similar facilities.

The mayor’s decision not to sign a contract with GetTix.Net to be the center’s exclusive ticket agency shows just how serious he is about getting answers to the myriad questions about the operation and management of the facility, and the company’s strategy for increasing attendance.

GetTix has a contract to be the center’s exclusive ticket agency with International Coliseums Co., another Global subsidiary that manages the downtown building.

While the revenue losses are becoming untenable, city government isn’t ready to pull the plug on Global because the company pays it $600,000 a year, whether the arena turns a profit or not.

But sometime in the not too distant future, Williams and his advisers will have to determine if that’s a good deal considering the city still must come up with more than $150,000 a year to make up the shortfall in the $755,650 annual repayment on the $11.9 million it borrowed to finance its share of the center.