Thursday, July 16, 2015
YOUNGSTOWN
The Covelli Centre lost $85,803 between April and June, but it’s a lower amount than projected, and the city-owned facility posted a $175,544 operating surplus for the first six months of this year.
The center was budgeted for an operating surplus of $93,650 in the first six months.
“The second quarter was subpar, but overall we’re doing good, and we’re on our way to another big year,” said Eric Ryan, the center’s executive director.
There were 19 events in the year’s second quarter, including seven Ringling Bros. and Barnum & Bailey circus performances.
The facility had budgeted a $137,239 operating loss for the quarter.
“Our first quarter was stronger than we anticipated, and we expected a slow second quarter,” Ryan said.
It was the worst second quarter for the center since 2007. The center opened in October 2005.
The center’s operating surplus from Jan. 1 through March was $261,358, and the facility had budgeted $230,889 for the first quarter. The first three months of this year was the center’s second-best quarter ever.
Looking to the third quarter, the center had a 6,000-seat sellout concert Wednesday by Def Leppard, and James Taylor’s Aug. 3 concert already is a 6,000-seat sellout, Ryan said.
Measuring operating surpluses and losses “by the quarter is difficult,” Ryan said. “We could have taken Def Leppard or James Taylor into the second quarter, and it would be strong, but the third quarter would be bad.”
The third quarter – between June and August – is typically the worst three months of the year at the Covelli Centre and other indoor venues because most acts want to be outdoors in the summer, Ryan said.
But with the two sell-out concerts, Ryan expects the third quarter to “be much better” than the projected $6,000 surplus for those three months.
Also, the fourth quarter is projected to make $152,000 in operating surplus.
“We’re looking to beat that,” Ryan said.
The center should turn an operating surplus this year of at least $334,000, and likely finish with more than that, he said.
“We look at the center from a full-year picture,” city Deputy Finance Director Kyle Miasek said. “The goal is to reach or exceed the projections. Our concern is the overall calendar year, and that looks excellent. There are two big shows on the calendar, and the fourth quarter is going to be great. We have high expectations to exceed the budgeted bottom line for 2015.”
Also, a change made in mid-2012 to have Ryan’s company, JAC Management Group, take over the center’s food-and-beverage sales brought in $61,603 in additional revenue to the city’s bottom line for the first six months of the year. The budgeted amount for the first half of the year was $31,274. The city made $96,563 in additional food-and-beverage revenue last year.
The city’s 5.5 percent admission tax on tickets sold for events at the center during the second quarter was $30,331, Miasek said. For the first six months of the year that tax has generated $115,148 for the city, he said.
The extra food-and-beverage money and admission tax go into the city’s general fund. Along with operating surplus, it helps offset the $11.9 million loan Youngstown borrowed in 2005 to pay its portion of constructing the $45 million facility. The city owes $10.66 million of the principal.
The city plans to pay at least $400,000 in principal in mid-September as well as $122,590 in interest, Miasek said.
Between operating surplus, admission tax and the food-and-beverage added revenue, the center has made $352,295 for the first six months of the year. The total cost of principal and interest for the entire year is $522,590.
Because of the amount of admission tax the city will get from the Def Leppard and Taylor concerts, the city could decide to pay up to an additional $100,000 in principal, Miasek said.