Arena profits projected Management creates target for events in 2006
The manager is banking on strong crowds for hockey games.
By DAVID SKOLNICK
VINDICATOR POLITICS WRITER
YOUNGSTOWN -- The Youngstown Convocation Center's management team expects to attract about 435,800 people to the arena in 2006 for nearly 100 events.
The events would gross $4,582,205 next year, but with $3,428,403 in expenses, the facility would net $1,153,802 in 2006, according to documents provided to The Vindicator by the city Thursday.
"It's a conservative goal; we expect to do more, but we want to be realistic," said Jeff Kossow, the arena's executive director, who developed the facility spreadsheet. "It's a target of what we want to do for events in the next year."
The figures will be updated on a fairly routine basis once acts are officially booked and the financial picture becomes more clear for the facility, he said.
Among the 97 projected events are:
USix rock concerts attracting 35,400 people in all.
UThree country concerts with 16,900 people expected to attend.
UTwo hip-hop concerts, one attracting 5,800 people and the other 4,000.
UA Christmas concert bringing 7,100 people to the facility, which can hold up to 7,200 people for non-ice shows.
UFive other events, simply listed as "concerts" on the list, attracting 25,100 people.
UThree World Wrestling Entertainment shows expected to attract 17,300 fans in total. The WWE is holding an event Sunday at Youngstown State University's Beeghly Center. This is the wrestling company's first appearance in Youngstown in more than 18 months.
Other projected events include the Harlem Globetrotters, Lipizzaner horse shows, rodeo, monster trucks, motorcycle ice racing, a home and garden show, a rib burn-off, the circus and Disney on Ice.
The convocation center would host 35 Youngstown SteelHounds minor league hockey games in 2006. The team would pay $150,000 in rent for those games.
The SteelHounds are joining the Central Hockey League, a minor league owned by the Phoenix-based Global Entertainment Corp. developing the Youngstown arena. Kossow is employed by a Global subsidiary.
Kossow estimates attendance for SteelHounds' home games between 4,500 and 5,500. The latter number would be a sell-out for ice events. Kossow estimates six games in December 2006 would hit that mark.
The average attendance for CHL games last year was 4,478, said Steve Cherwonak, the league's vice president of communications.
"We are hopeful the good folks in Youngstown will increase that average," he said. "We'd be disappointed with anything under 4,000. I think 4,500 is realistic. Who knows? Maybe we'll do better. Maybe we'll sell out 15 games."
Projections for the arena's revenue for 2005 weren't available Thursday. However, Kossow said the facility is expected to lose between $500,000 and $750,000 this year. That is because the arena, slated to open in late October, will have slightly more than two months of revenue while having 12 months worth of expenses, Kossow said.
Global's 2006 management fee for the Youngstown arena is $183,288. Personal services, including salaries and benefits for arena employees in 2006, is projected at $1,214,295.
After all expenses are paid, the arena's 2006 profit is projected at $1,153,802.
The first item to be paid is the city's debt service, estimated by city and arena officials to be $852,353.29. After that, the city gets 70 percent of the arena's profits and the other 30 percent goes to the arena management.
The arena's cost could be as high as $45.38 million, and the city may have to borrow as much as $12.1 million to make up a funding gap for the facility in a worst-case scenario to be paid back over 20 years, said city Finance Director David Bozanich.
The city received a $26.8 million federal grant for the facility, a $2 million commitment from the state and a $550,000 energy grant from Ohio Edison, and used about $4 million in funds from the water and sewer departments for water and sewer work.
Richard Kozuback, Global's president, is confident the Youngstown facility will turn a profit. Arenas typically don't make profits, he said. However, because most of the Youngstown facility's cost was paid by the federal government, its debt is low and the arena will be profitable, he said.
Youngstown and Global are committed to making the arena a long-term success, and will set aside money to be used for maintenance and improvement work at the facility, Kozuback said.
The Youngstown arena will have a few unique items, he said, including an open, glass-enclosed conference/community room and an inside digital sign system.
Global has worked the past year with officials from Lebanon, Tenn., to build an arena in that city. Lebanon officials will visit the Youngstown convocation center on Thursday.
The company built arenas in Loveland, Colo., and Rio Grande, Texas, in the past two years. It recently broke ground on a facility in Rio Rancho, N.M., and will do the same next week at a site in Prescott Valley, Ariz.
The company doesn't provide funding toward arena projects, Kozuback said.
"We build and manage facilities, and bring hockey franchises and produce a revenue stream," he said.