Covelli Centre sees a surplus

By David Skolnick | January 21, 2010 at 12:09a.m.

Covelli Center Executive Director Eric Ryan

The operating budget saw a $541,298 loss in 2006 but a $153,950 profit in 2009.

YOUNGSTOWN — For the first time since the Covelli Centre opened more than four years ago, Youngstown’s indoor sports and entertainment facility did not lose money in its operations budget.

The city-owned center ended 2009 with a $153,950 operating surplus.

“To post a profit in a very difficult time is impressive,” said Kyle Miasek, the city’s deputy finance director. “The building has turned the corner and the city administration is excited. Hopefully the community will continue to support it.”

In comparison, the center lost $541,298 in 2006, its first full operating year. The center opened in October 2005.

City officials said the surplus, plus $300,405 in revenue last year from the 5.5 percent admission tax on tickets sold for events at the center, will go toward the $800,000-plus the city pays each year to cover the interest on $11.9 million it borrowed in 2005 to help fund the center’s construction.

City officials say they hope the center can make enough money in about three to four years to start paying towards the loan’s principal. But that’s not possible now, they said.

The admission tax was put in place in 2008, replacing a $3 to $3.50 fee on each ticket. Even with the $3 to $3.50 fee — which went directly to the center while the admission tax goes to the city — the center lost $541,298 in 2006 and $247,510 in 2007.

While the $153,950 will also go toward paying that debt, it will be given to the city from the center over a period of time to make sure the facility always has money to operate, Miasek said. The rest of the money owed for the loan will come from the city’s general fund, he said.

“I believe we made humongous strides in 2009,” said Eric Ryan, the center’s executive director. “We’re very pleased with what we’ve accomplished in 2009. I think we can get better. We’ll keep working at it.”

The operation profit could have been larger, but Ryan said center officials decided to make $30,000 in improvements during the final few months of 2009.

Those improvements, Ryan said, were:

U $16,000 to replace two hot water tanks — one was beyond repair and the other was “about to go.”

U $8,000 to replace a backstage storage elevator door that’s been bent at the bottom for about two years.

U $6,000 for two new hockey goalie nets that were “in bad shape.”

“We’ve had a great year... The turnaround is monumental,” Ryan said.

In 2009, the center had 102 events, including 12 sold-out shows, with more than 220,000 people in attendance.

The city hired JAC Management of Struthers, Ryan’s company, and SMG, a Philadelphia company, in June 2008 to co-manage the center. The city ended its contract in October 2007 with International Coliseums Co. of Phoenix after a rocky two-plus-year relationship. Ryan’s company served as the center’s interim manager from October 2007 until it was hired on a permanent basis with SMG eight months later.

Center officials are working on the 2010 budget and should have it done by next week.

The 2009 budget called for a $9,299 operation profit. The 2010 projected profit will be about $40,000 to $50,000, Ryan said.

One issue of concern for this year is several of the center’s most successful shows in 2009 were classic rock concerts, a genre that has been a hit here, but is struggling nationwide, Ryan and Miasek said.

“That industry has cut back,” Ryan said.

That makes it a challenge to get those concerts here, he said.

“It’s a larger uphill struggle this year” than in 2009, Miasek said. “It’s the economic uncertainty not just with consumers, but with promoters and bands.”

Even so, Miasek said the city has confidence that Ryan’s company and SMG will keep the center moving in the right direction.

“They know what they need to do,” he said.

skolnick@vindy.com

ARENA FINANCES

Last year was the first year that Youngstown made money on the operation of the Covelli Centre. These figures don’t include the money the city pays annually to cover the interest on $11.9 million it borrowed to help fund the center’s construction. It also doesn’t include money the city makes on a 5.5 percent tax on each ticket for events at the facility.

2006: $541,298 loss

2007: $247,510 loss

2008: $310,435 loss

2009: $153,950 profit

Sources: Youngstown Finance Department, Vindicator files