Council backs SMG pact with Chevrolet Centre

By David Skolnick

Members unanimously approved a five-year-plus agreement.

YOUNGSTOWN — There’s no guarantee that the hiring of a management company to assist the city-owned Chevrolet Centre is going to guarantee success for the arena, Mayor Jay Williams said.

Having SMG involved with the facility, however, will give the city-owned center its best opportunity to do well, Williams said. SMG manages more than 200 facilities worldwide.

The mayor said he’s sure the center will face additional problems, issues and challenges, “though none in my mind that we can’t overcome.”

The center’s biggest problem since it opened in October 2007 is its failure to stay out of the red. City officials say hiring SMG, a Philadelphia company, can hopefully stop that problem.

City council unanimously approved a five-year-plus contract Wednesday with SMG and JAC Management Co., a Struthers company that has handled the center’s day-to-day operations since October 2007.

The board of control will either approve the contract today or hold a special meeting Friday, said Williams, chairman of that board.

Councilwoman Carol Rimedio-Righetti, D-4th, questioned whether Eric Ryan, who owns JAC, has the experience to manage the center.

Rimedio-Righetti is satisfied with retaining Ryan because of a clause in the contract that allows the city to fire his company for cause. She also said the length of the contract is no longer an issue to her.

SMG will provide support with marketing services, event booking, risk management and insurance, administration and financing.

SMG will waive its monthly fee through Dec. 31 and be paid only for travel expenses pre-approved by the city.

Effective Jan. 1, SMG would receive $80,004 a year. JAC gets $108,000 annually for its services. That would drop to $96,000 a year effective in January.

SMG and JAC would also receive a percentage of net operating income above the $100,000 mark.

Neither company would receive commissions.

Global Entertainment Corp., the Phoenix company that ran the center for two years ending in October 2007, received $150,000 a year from the city in management fees as well as about $200,000 a year in commissions.

Also, the city paid a Global employee between $85,000 and $95,000 a year in salary to be its executive director.

Meanwhile, council approved a retirement/resignation incentive plan Wednesday with the firefighters union to avoid layoffs.

At least 15 firefighters must sign up by Friday’s 4 p.m. deadline for the incentive program to take effect.

The city already has received confirmation from eight and expects four others to sign up today, said Fire Chief John J. O’Neill Jr.

O’Neill and Christopher M. Weaver, vice president and legislative director of the city’s firefighters union, are hopeful at least 15 firefighters will take the offer.

“I’m cautiously optimistic we’ll hit that number,” Weaver said.

The city expects to save between $1.4 million and $1.6 million during the first two years of the program.

Firefighters accepting the buyout would receive their annual base salary, about $58,000 on average, paid to them in even amounts over five years.

The city is projecting a deficit in its general fund of more than $3 million by Dec. 31, and about $6 million by Dec. 31, 2009, if cuts aren’t made.

City administrators have said about 60 jobs need to be eliminated, or the financial equivalent of $3.9 million in salary and benefits, to balance the budget by Aug. 1.

The fire department needed to cut its budget by $750,000 to avoid the loss of about 12 jobs there.