A balancing act: Chevy Centre aims to stay on profitable track

By David Skolnick

Open for less than three years, the Chevrolet Centre already has quite a history.

YOUNGSTOWN — Entertainment and sporting venues the size of Youngstown’s Chevrolet Centre typically don’t make a profit.

“If you can break even, that’s great. If you can make a profit, that’s outstanding.”

So says Jim Grinstead, editor and publisher of Revenues from Sports Venues, and Conventions and Conference Facilities, two trade publications.

When the books close on the Chevrolet Centre’s third operating year in September, “we’re optimistic the building will have a positive bottom line,” said Kyle Miasek, the city’s deputy finance director.

As of June 30, nine months into the center’s 2007-08 fiscal year, the facility had a $110,669 profit. July to September is typically a slow quarter for indoor facilities, and the Chevrolet Centre has lost money during those three months in its first two years.

Despite the few ups and many downs at the city-owned facility that opened in October 2005, Grinstead said, “I don’t think your building is doing badly. Youngstown is probably on the right track and moving in the right direction.”

Most small to midsize centers in secondary markets “don’t make money,” he said. “It’s tough to keep them busy. You don’t have many acts that want to come to venues that size that people want to see.”

While the center will celebrate its third year of operating in October, it’s already had quite a history.

During its first two years, International Coliseums Co., a subsidiary of Global Entertainment Corp., ran the facility using five different executive directors.

•ICC got off to a bad start when it predicted a $1.1 million profit for the center’s first year a few months before it opened. The figure was later cut by about 50 percent.

The facility ended its first fiscal year, October 2005 to September 2006, with a $23,388 deficit. ICC predicted a profit of $630,000 for the October 2006 to September 2007 fiscal year. The center ended that fiscal year with a $254,388 loss.

•The city used GetTix.Net, an ICC sister company, to handle its ticketing from October 2005 to last April. The city received no money from the company’s sale of tickets, a staple of arena income nationwide.

•City officials expected money from the state to reduce the $11.9 million it borrowed for its portion of constructing the center. The state has refused to provide the money from its 2007 and 2009 capital bills.

The city borrows $600,000 to $675,000 annually to pay the interest on the $11.9 million it borrowed. It’s yet to pay anything to reduce the principal.

•ICC failed to include a $1.50 parking fee on most tickets it sold during the first few months it ran the center. The money was supposed to offset a $200,000-plus annual contract the center has with USA Parking Systems. The center collected about one-third of that amount in its first fiscal year.

•The center lost its major tenant, the Youngstown SteelHounds hockey team, which played 32 games at the center a year. A financial dispute led the Central Hockey League, another Global subsidiary, to kick the team out June 2.

In the days after his team was ousted from the CHL, Herb Washington, owner of the SteelHounds’ parent corporation, Blue Line Hockey LLC, had criticized city officials. He said they refused to help him get out of the CHL deal sooner so he could field a team in a different league this upcoming season. Mayor Jay Williams has disputed that assertion.

In recent weeks, Washington and Williams have met to work out a plan for the future of hockey at the center. But also, the city is asking a federal judge to void its contract with Blue Line.

Hockey is vital to the center’s success, Williams said.

“It’s a versatile facility, but it was designed with hockey as a major aspect,” he said.

Since parting ways with ICC in October 2007, city officials say they’ve taken steps to stabilize the center and help it improve.

•The city hired Eric Ryan of Struthers as the center’s executive director in October 2007. City officials are very pleased with the work done by Ryan, Williams said. Expenses are under control and events that put the center at financial risk no longer exist, Miasek said.

•The city signed a contract in June with SMG, a Philadelphia company, to help Ryan manage and promote the facility. SMG manages more than 200 facilities worldwide.

•The city selected Ticketmaster in April to handle ticketing for events at the center. The deal is expected to generate $942,000 over five years for the city.

•The city is finalizing a deal to have the Mahoning Valley Phantoms junior hockey team play some of its home games at the center this season. The city will assist the owners of the SteelHounds and Phantoms in evaluating options to have a higher-caliber hockey league team play at the center for the 2009-10 season.

Even with all of the changes, Williams said there is no guarantee of success.

“We have to have events that the community wants to attend,” he said. “We’ve learned a lot in these two-plus years. You have to find that balance of sports, concerts and family events. Most of the pieces are in place.”

Miasek added: “It will come down to the ability of Eric [Ryan] and SMG to lure the right acts to the facility. With the right mix, the community will buy tickets. We’re setting it up as best we can to be successful. I feel a lot more confident with the facility than I did a year ago.”

The center is heading in the right direction, Ryan said.

“The correct management deal is in place,” he said. “Ticketing is a big turnaround. What might be the most important change is, we’re making the right decision on shows and the building isn’t taking a risk on bad shows.”

The center is embarking on a new marketing plan, “See You At The Chevy!” that will include billboards and buttons worn by center employees.

“The idea is to make the center more of a destination location,” Ryan said.

While hockey is still uncertain, city officials say they are pleased with the relationship they have with the owners of the Mahoning Valley Thunder, an af2 (arena football) team that has played its eight home games a year at the center for the past two seasons.

The team recently finished its season with a 3-13 record. Despite the record, the team has nothing but praise for the city and the center, said Anthony Farris, the Thunder’s media relations coordinator.

“We’ve had zero problems,” he said. “We enjoy working with them. We don’t anticipate that changing at all. We expect to continue that same strong relationship in the future.”

SMG’s relationship with the city and Ryan is “beginning to blossom,” said Robert L. Cavalieri, the company’s senior vice president of business development.

While the center has struggled financially, Cavalieri said that’s not unusual and with the partnership formed among SMG, Ryan and the city, he envisions a solid future for the facility.

“Trust me, there are lots of arenas that run deficits,” he said. “A majority of arenas in the country are running deficits.”

To be successful, an indoor arena must be a “multipurpose facility,” Cavalieri said. That means sporting events, entertainment shows and other shows that appeal to the community, he said.

“We would not have been as interested in the Chevrolet Centre if it didn’t have good potential,” Cavalieri said.

SMG is working with Ryan to bring more events to the facility using the national company’s buying power, he said.

The company booked the center for a concert by the Steve Miller Band and George Thorogood as one of six stops at SMG facilities.

Also, SMG officials are taking Ryan to New York City on Wednesday to meet with various event promoters and agents to sell them on booking shows at the Youngstown facility.

In February, Ryan went to a concert and convention show in Los Angeles on behalf of the center. He persuaded the promoters of singer Carrie Underwood to book a concert at the center. The June 11 show was the quickest sellout in the center’s history and made a $50,000 profit for the arena.

Also at the show, Ryan made contact with promoters of Cirque du Soleil with a show booked for March 2009.

“Being successful is achievable by bringing in good events that please the community, the performers and the promoters and marketing them well,” Ryan said. “We’re a small entertainment community. It’s better to work triple hard to get good events than to just fill in dates.”

The center is also pivotal to improving the quality of life of those living in the community, Ryan and Williams said.

“We subsidize the center like we do with our pools and parks,” Williams said. “There isn’t something going on all the time at the center. But our pools are empty nine months a year and the parks are empty six months a year.”

But there is only so much money the city is willing to spend to subsidize the center, he said.

“To subsidize it by $200,000 or so when it brings people downtown and helps the city, we’re willing to do it,” Williams said. “But $750,000 to $1 million would be an issue. It would be difficult to swallow. If that happens, we go to the drawing board and make a decision. If we find the facility to have a significant adverse impact, a sale would be a possibility. But you can’t make that decision after just a few years.”

skolnick@vindy.com