Top-to-bottom evaluation of Covelli Centre is timely

Whatever decision Youngstown Mayor Charles Sammarone’s ultimately arrives at with regard to the future of the Covelli Centre, the operational assessment of the facility that is to be conducted will provide long-term benefits.

Having an outside firm go over just about every aspect of the $45 million sports and entertainment complex is timely and appropriate. It has been seven years since the facility was built and the itch — to sell, lease, or maintain the status quo — needs to be scratched.

Indeed, any company or group of investors interested in buying or leasing the center will want to know that the records have been independently reviewed and that whatever claims the city makes about the Covelli have credibility.

The mayor first broached the possibility of a sale or lease four months ago, and since then the city’s consultant, SMG, has been laying the ground work. Now, Sammarone is ready to take the next step: Hiring PA Sports and Entertainment, with offices in Dowingtown, Pa., and Cranston, R.I., to conduct an assessment of Covelli’s operations.

With the results of the review, PA Sports would prepare a request for proposals from companies or investor groups interested in buying or leasing the complex.

This isn’t about the city attempting to make a financial killing. Sammarone knows that’s unrealistic. What the mayor is looking for is a deal to pay off the debt incurred when the facility was being built.

Although the original plan called for the construction of a convocation center with the $26 million federal grant secured by then Congressman James A. Traficant Jr., city officials at the time decided to go for broke — literally. Then Mayor George M. McKelvey and city council decided to borrow $11.9 million to help pay for the $45 million ice hockey arena and entertainment complex. This, after residents were promised that not one dollar of general fund money would be used to either build or support the center. That promise was broken.

Although the books in recent years have shown an operating surplus, the fact of the matter is that there isn’t enough money being generated, even with a 5.5 percent admission tax on tickets, to pay down the city’s debt. Thus, $970,000 is now being taken from the general fund for the annual principal and interest.

And there is no end in sight — because sports and entertainment arenas owned by governments do not make money.

Sammarone, seeing the financial handwriting on the wall, is willing to let go of the Covelli Centre for the amount the city still owes the bank. He would be elated if he could get a little more than that.

Valuable information

But even if the city does not get the price the mayor believes is fair, the assessment to be conducted by PA Sports will arm him with a great deal of valuable information.

For instance, a review of the books would reveal whether the operating surpluses that the facility’s executive director, Eric Ryan, has been touting are based on industry practices. Ryan also owns a concert promotion company.

The review would also show if provisions have been made to pay for repairs and upgrades of the center.

Sammarone’s desire to sell or lease Covelli is prompted by his belief that in a couple of years, city government’s general fund will not have the $970,000 for the principal and interest on the loan. He is to be commended for thinking ahead, which wasn’t the case when the $45 million project was conceived and executed.