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Covelli Centre expects its best year yet
YOUNGSTOWN
The Covelli Centre had its first July-to-September quarter operating surplus, and its executive director is expecting 2011 to be the best financial year for the city-owned facility.
The center had a $35,230 operating surplus between July and September. Center officials had budgeted a $161,608 loss for the third quarter.
July to September is usually the worst quarter for indoor facilities, arena experts have said.
But concerts by Barry Manilow with the Youngstown Symphony Orchestra, and Motley Crue with Poison helped generate the center’s first operating surplus for the third quarter, said Eric Ryan, center executive director.
“The numbers are very good; we’re finding ways to compete in summer,” he said. “The entertainment industry for indoor arenas is very challenging throughout the summer months.”
In addition to Manilow and the Crue/Poison shows, the center also had strong crowds for a rap concert featuring Wiz Khalifa, a World Wrestling Entertainment event, and a show with comedian Jeff Dunham, Ryan said.
Ryan expects this year to be the best for the center, which opened in October 2005, in terms of operating surplus. At No. 1 is 2009 with $153,950.
Through the first nine months of this year, the center’s operating surplus is $87,193. The center had projected an operating surplus of $80,405 for the entire year.
The center’s projection for the last three months of this year is a $154,000 operating surplus.
But Ryan said Wednesday that operating surplus for the fourth quarter will be closer to $75,000 to $100,000.
Center officials made the quarterly financial projections at the end of 2010, Ryan said. That’s done well before many shows are booked at the facility, which causes the quarterly projections to sometimes be very inaccurate, he said.
“We budgeted a massive operating profit for the fourth quarter,” not realizing two of the facility’s biggest shows would be in the third quarter, Ryan said.
The city also received $68,481 during the third quarter from a 5.5 percent admission tax on tickets sold for events at the center. For the first nine months, the admission tax has generated $162,934 for the city. The city made $300,405 in revenue from the admission tax for all of 2010.
The tax and the center’s operating surplus helps off-set some of the $925,000 the city owes this year in principal and interest on $11.9 million it borrowed in 2005 to help fund the center’s construction costs.
The city paid $275,000 last month toward that loan principal; the first time it’s paid any of that money borrowed six years ago. It also paid $650,000 in interest in September.
Mayor Charles Sammarone praised Ryan and his staff for the work at the center.
Meanwhile, Sammarone and Ryan are continuing to discuss changing the food-and-beverage vendor at the center from Centerplate to Ryan’s company, JAC Management.
Moving that service in-house would make more money for the center, provide more flexibility — such as $1 beer and $1 hot-dog specials for certain events — and the use of local vendors to sell their food there, Sammarone and Ryan say.
The two sides are negotiating the percentages of profit to be given to JAC for that service, Sammarone said.
“We want it to be fair for both sides. We’re negotiating to make these numbers work,” the mayor said.
JAC could take over operations of food and beverage services in January, Sammarone said.
As part of that deal, the city would have to pay Centerplate the balance of the $1.2 million owed to the company as part of a 10-year contract signed in September 2005 for equipment and materials purchased for food-and-beverage services. About $400,000 is owed. The city is currently paying $9,026 a month to Centerplate for that investment. The city would borrow the money and repay the loan on a monthly basis.