Mayor seeks a new manager for Chevy

‘I don’t think we’ll work with Global again,’ the mayor says.

By DAVID SKOLNICK

CITY HALL REPORTER

YOUNGSTOWN — The relationship the city has with the company managing the Chevrolet Centre is “irreparably harmed” and will be severed, Mayor Jay Williams said.

The city is in talks with other entities about managing the center and is considering running the facility itself on a short-term basis, if needed, Williams said.

“We leave all possibilities on the table,” he said. “We’re examining all options.”

International Coliseums Co., the Global Entertainment Corp. subsidiary managing the center, filed a federal lawsuit Wednesday in U.S. District Court in Youngstown claiming the city breached its contract costing the company money.

ICC is refusing to pay $600,000 it had previously guaranteed the city as part of a contract restructuring deal last year. The money was due to the city Sept. 1.

ICC continues to manage the city-owned center and collect a $12,500 monthly management fee.

But the city has no plans to continue the working relationship much longer, Williams said.

“Never say never, but I don’t think we’ll work with Global again,” he said.

The city wants to negotiate a dissolution of its contract with ICC, the mayor added. “We want to wind this down in an orderly matter,” he said.

In lawsuit

In its federal lawsuit, ICC didn’t make any mention of cutting ties with the city.

“ICC’s goal has always been to reach a fair and equitable resolution with the city,” said Andy Moorer of the Phoenix-based Miller Group that serves as ICC’s media adviser. “To that end, ICC will continue to seek to resolve its issues with the city outside of the litigation.”

Except to acknowledge the ICC lawsuit, Moorer refused to say anything else about the issue Friday.

But Williams had plenty to say at a press conference.

Since the beginning of his mayoral administration in early 2006, Williams said city and Global officials held a series of discussions “about shortcomings in the management and oversight” of the center.

“Throughout that time, the city also repeatedly expressed its dissatisfaction with Global’s failure to even come close to meeting its projections and with Global’s lack of performance in promoting and marketing the facility,” Williams said.

Based on Global’s estimates, the center should have made about $1.38 million in profits during its first 21 months of operation, which began in October 2005.

Instead, the center has lost more than $55,000 during that time.

Also, Global has estimated the facility would lose about $100,000 between July and this month. Pointing to Global’s repeated failures to meet its projections, city officials expect that three-month loss to be greater than estimated.

In the lawsuit, ICC contends the city made decisions that hurt the center’s profit line. But many of those decisions were approved by ICC.

The ICC lawsuit is “totally without merit” and was filed “as another attempt by Global to renege on its representations and obligations to the city,” Williams said.

What city plans

The suit was filed, the mayor said, because the city made it clear it was going to file one of its own against ICC in Mahoning County Common Pleas Court.

The city is undecided about moving ahead with its lawsuit in common pleas court, but will definitely file a counter-claim against ICC in federal court seeking damages, Williams said.

ICC is suing to not pay the $600,000 as well as for compensatory damages, attorney fees and “any other relief the court deems appropriate.”

ICC has not only failed to meet financial projections, but has done a poor job operating and promoting the center, Williams said.

“We brought in a supposed expert company to run the center and we’ve had to deal with many of the problems ourselves,” he said.

“The city’s relationship with Global and its confidence in Global’s ability to manage the facility has been eroded,” he continued.

The city is committed to keeping the center open and active, and ensuring that the events already scheduled there go forward as planned, Williams said.

The city filed a claim on the $600,000 with American Contractors Indemnity Co., the Los Angeles company holding the bond, to receive that money.

The $600,000 was to pay part of the $755,650 the city owed to Sky Bank on Sept. 7 for the interest on the $11.9 million it borrowed two years ago to fund its portion of the center’s $45 million construction cost.

The city used general fund money to make up that $600,000.

skolnick@vindy.com