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Youngstown’s Covelli Centre celebrates the 10-year anniversary of its first show
YOUNGSTOWN
Youngstown city officials never wanted then-U.S. Rep. James A. Traficant Jr. to get a $26.8 million federal grant in 2000 to build what is now known as the Covelli Centre.
A decade after it opened, however, the facility is firmly entrenched as one of the main catalysts for the ongoing revitalization of the city’s downtown.
“When we found out about the federal award, we were somewhat surprised,” said city Finance Director David Bozanich. “We didn’t ask for it. But we’ve made it work. It has a huge impact on the renaissance of downtown. It’s a stimulus for downtown. We’re proud as a city that it’s turned out as successful as it is.”
But “success” and the center have not always been entwined.
On Thursday, it will be 10 years since the center’s first concert by 3 Doors Down.
IN THE BEGINNING
Before the first note was played, the center’s development featured battles between Traficant and city officials over who would control the project, the failure to get private funding and all the state funding the city was supposedly promised, one bad contract after another and ridiculously inflated promises of annual profits of at least $1.15 million.
International Coliseums Co. and its subsidiaries, including Global Entertainment Group, were chosen to build and manage the center.
“Their profit projections were overly optimistic,” said George M. McKelvey, who served as Youngstown mayor from 1998 to 2005. “History has proven that. We didn’t know how to run such a facility. The challenges of a facility like this are endless. But the challenges have been overcome.”
Attendance for the 3 Doors Down show was 4,042. The center can hold between 5,000 to 7,600 for concerts based on configurations. That show made $3,765 for the center.
The next day was worse. Only 3,230 tickets were sold to see Tony Bennett in concert, and the center made $2,556 on that show.
Instead of making an annual profit of $1.15 million, the center saw an operating loss of more than $1 million over its first three years.
“They said things that were inaccurate — and we bought it,” said Artis Gillam, who served as 1st Ward councilman from 2000 to 2007. “When the mills went down, the city had a lot of people come in to sell us a bill of goods.”
Several attempts by The Vindicator to contact Rick Kozuback, ICC president, were unsuccessful.
FIRSt-CLASS FACILITY
A $26.8 million federal grant paid for most of the center’s construction. Other funds came from the state, an energy efficiency grant, and from the city’s water and wastewater funds.
The city had to borrow $11.9 million in 2005 to finish the $45 million center.
McKelvey had said in April 2001 that the project should be scaled back without money from the private sector.
For $30 million, the city would have built a “glorified pole building,” McKelvey now says. “We had to decide if we were going to build a first-class facility or a pole building.”
Bozanich said the city was left with no choice but to borrow the money “to build a facility appropriate for the market to attract people. That’s why we had to build it as we did.”
But Gillam, a contractor, said a quality building could have been constructed for $30 million.
“The center shouldn’t have cost as much as it did,” he said.
ONE-SIDED DEAL
Because the center was losing money, the city didn’t pay any of the principal toward the $11.9 million it borrowed until 2011. By then, it had paid more than $5 million in interest.
As of today, the city owes $10.26 million in principal.
Not pleased with the control ICC had over the center, the city sent Deputy Finance Director Kyle Miasek to the facility in 2006 to see if he could identify the problems.
“Everything was set up in a way to syphon money from the center and give it to” ICC, he said. “The city was making very little of the money for suite sales, food and beverage and ticketing. The arrangement was one-sided, and we were going to lose more money.”
The city got ICC to pay the deficit during the first 12 months of the year, which was $164,503, and $386,750, half of the annual interest payment on the $11.9 million debt.
In an effort to end its relationship with ICC, the city decided in June 2007 to eliminate a $3.50-per-ticket parking and facility fee it shared with the management group, and replace it with a 9.5-percent admission tax – reduced to 5.5 percent in July 2008 – with all of the money going to the city.
The city and ICC agreed by October 2007 to dissolve their relationship.
MILLION-DOLLAR MAN
City officials and local business leaders credit Eric Ryan, a Struthers concert promoter brought in as interim executive director in 2007, for the center’s turnaround. The city made the hiring permanent a year later, and the huge financial losses it experienced in its first three years turned into operating surpluses since 2009.
“It’s very fortunate for the city we found Eric,” Mayor John A. McNally said. “If it continued to consistently lose money, it would be tough to keep it operating. The center has been key to the momentum of downtown. The Covelli Centre is a vital part. Without it, you wouldn’t have the development downtown.”
Ryan said he met in October 2007 with Bozanich, Miasek and then-Mayor Jay Williams about running the center on a temporary basis.
“We felt we could turn things around,” Ryan said. “In 2009, our first full year, we did that. We needed to change the public’s perception of the facility. To do that we needed to start making good news. We booked shows that people wanted to see and reduced expenses. Turning around the center financially was important. Most arenas don’t make money, but we were able to do it.”
The Vindicator dubbed Ryan “The Million Dollar Man” in February 2010. The center lost $541,298 in 2006. In 2009, its operating surplus was $153,950 with $307,000 in admission tax. The difference? $1,002,948.
“Eric understood what the city needed, and he was able to lure concerts to the facility and build relationships with suite holders,” Miasek said. “He brought in shows that helped the center grow. It’s now one of the major anchors of downtown. Without the center, we wouldn’t be able to do what we’re doing downtown.”
The city named Ryan the center’s executive director in June 2008, and in 2009, the facility stopped losing money, finishing with a $153,950 operating surplus.
Since 2012, the center has made more money in operating surplus and admission tax than is needed to cover the $11.9 million loan’s principal and interest payments. Between the two revenue sources, the center made $706,719 last year. It owed $472,590 last year in principal and interest.
“That positive news changed the public perception of the building,” Ryan said. “That was a major contributing factor to our success. The center has been a humongous catalyst in the revitalization and growth of downtown. When we first took over, people would say they were afraid to come downtown. It’s been years since I’ve heard that. People have supported the arena tremendously.”
SOME HITS
Since the center opened a decade ago, its most successful events have been almost exclusively concerts.
Two performances by the Trans-Siberian Orchestra in November 2005 sold close to 11,000 tickets and made a profit of about $50,000 for the facility. TSO returned several other times to the center, drawing strong numbers each time including 12,000 tickets sold for two shows in November 2009.
Ryan’s first major show was in June 2008 when country singer Carrie Underwood played to a sell-out crowd.
Since he took over management of the center in October 2007, Ryan said the facility has had 84 sell-out shows.
Other sell-out concerts include Tim McGraw, Def Leppard, Eric Church, Kid Rock, Journey, Brad Paisley, Rod Stewart, James Taylor and Barry Manilow with the Youngstown Symphony.
The biggest attraction was Elton John, who performed twice at the facility. His May 2010 show was the fastest sell-out in the center’s history with about 7,000 in attendance.
When he returned in February 2014, John set a Covelli attendance record at 7,611. The facility’s profit for that one night was about $300,000.
The biggest sporting event at the center was in February 2009 for a boxing card headlined by then-middleweight champion Kelly Pavlik of Youngstown. The crowd of 7,334 is the second largest at the arena.
SOME MISSES
Businessman Bruce Zoldan, owner of a junior hockey league team, was one of the first people Traficant approached about relocating to the downtown Youngstown facility. Zoldan agreed, though admits now he “was skeptical” Traficant could get the federal money.
But Zoldan was so critical about the construction and management of the facility that he stayed away.
Instead of Zoldan, businessman Herb Washington fielded a hockey team, the Youngstown SteelHounds, in the ICC-owned Central Hockey League.
“It didn’t go well,” said Washington, who dissolved the team after three seasons, largely because of money issues with the CHL. “The difficulty was getting enough people on a nightly basis and travel as the other teams were far away. Also, the city didn’t fully understand how to make hockey work. I saw it as an opportunity to make the place I live better. Sometimes things don’t work out, but the building is there and is functioning the right way.”
Washington has little regret.
“I was probably five years ahead of schedule in terms of the resurgence of downtown,” he said. “It’s been a tremendous asset for the residents of this community. The concerts they have here would never come to Youngstown without the center.”
Zoldan would eventually move his team, the Mahoning Valley Phantoms, to the center in 2008, fold it a year later and replace it with one in a higher-level junior hockey league. That team, the Youngstown Phantoms, continues to play its home games there.
But hockey still struggles to draw a lot of fans to the arena.
“A lot was learned and corrected,” Zoldan said. “We have a great arena, and we’re pleased to be a part of it.”
There also was the Mahoning Valley Thunder, an af2 arena football team that played its home games at the center from 2007 to 2009.
The first home game in March 2007 had a crowd of about 5,900, and its second home game attracted about 4,800.
But as that season went on and in two subsequent years – the team was a combined 5-27 in 2008 and 2009 – the crowds stayed away and the team folded in 2009.
It wasn’t just the Thunder that had problems. The af2 league went out of business the same time the Thunder stopped playing.
THE CENTER’S FUTURE
K. Anthony Hayek, vice president of architecture for MS Consultants Inc., the project’s architect, said the company is “proud to see what a catalyst the center has been for downtown Youngstown.”
He added: “At the time we built this, there were a lot of boarded-up buildings downtown. It’s the single biggest reason that downtown has come back.”
As for the design of the center, Hayek said he is most proud of how the sight line for each seat is good, something not easy for a facility that has more than 7,000 seats.
His firm and MKSK, a Columbus company, are designing an amphitheater for the rear of the center.
Like most indoor arenas, the Covelli Centre struggles to book shows during the summer. That’s why the city is looking at constructing an amphitheater and a park along the Mahoning River near the arena. The city won’t use money from its general fund to pay for the amphitheater. It is seeking money from companies for sponsorship deals and from foundations, the state and federal governments, McNally said. It will use some water and wastewater money where appropriate, he said.