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Now is not the time to rush decisions on Covelli Centre



Published: Sun, April 10, 2011 @ 12:00 a.m.

Any discussion in Youngstown City Hall about the Covelli Centre that involves finances should occur within the context of this reality: Six years after it borrowed $11.9 million to help pay for the construction of the sports and entertainment facility, the city has not paid one cent of the principal. It has only been covering the interest, between $600,000 and $800,000 a year.

But after September, city government will have to start paying on both the principal and interest. Therefore, before a decision is made about changing the food and beverage vendor and building an amphitheater with a seating capacity of between 2,500 and 3,500, Mayor Jay Williams and his financial team must let the taxpayers know what they intend to do about the $11.9 million loan.

The Covelli Centre has not been the financial boon that city officials said it would be when it was proposed in early 2000 after then Congressman James A. Traficant Jr. had secured a $26.8 million federal grant for a conference facility.

Then Mayor George M. McKelvey and members of council ignored the warnings of this newspaper and a few others in the community about the financial assumptions being made to justify the $45 million, 6,000-seat arena for ice hockey, concerts and other events.

The $11.9 million loan the city secured for its share of the construction cost was not discussed to the extent it should have been. The unanswered question was : What if the revenue assumptions about the arena are wrong?

Thus today, city government is forced to set aside in its tepid general fund $662,830 to pay the interest on the loan. This, at a time of tight budgets on the federal and state levels which mean less money for urgently needed services.

Against this backdrop, city council has slowed down the Williams administration’s push to buy out the current food and beverage vendor, Centerplate, for $467,762, and to proceed with the construction of the amphitheater.

Detailed accounting

The taxpayers of the city need a detailed accounting of Centerplate’s 10-year contract — it was formerly Boston Culinary — and also an explanation for why the administration decided not to seek proposals from national companies that have experience serving arenas.

The plan presented to council calls for JAC Management, which is headed by Eric Ryan, the Covelli Centre’s manager, to take over from Centerplate. What experience does JAC have in providing food service for a 6,000-seat venue?

As for the amphitheater, if the $600,000-to- $1 million price tag comes out of the general fund, what projects will have to be sacrificed?

Is an entertainment facility a higher priority than, say, demolition of dilapidated structures?

We think not.

City council is right in seeking answers to such questions and the administration should be willing to provide them.


Comments

1mrtb74(14 comments)posted 3 years, 5 months ago

Think there is any chance of Traficant or McKelvey apologising for the financial mess they have put the city in? They sold us a money pit.

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2One_Who_Stayed(237 comments)posted 3 years, 5 months ago

OK - so the city was originally sold a bill of goods by an Arizona company that promised huge returns and, in fact, had a track record of doing this sort of thing successfully elsewhere - whats not to believe. The fact is that this facility was so badly run in the past (by said company) that it has lost money over several years.

Enter Eric Ryan and company. All of a sudden he has the place making money and running properly. Bringing in shows and events that people in this area actually want to see. What experience did he have running a facility of this size? None. But he has and is continuing to run it correctly and profitably.

Why this incessant need to go out for bids and investigate other companies that have no vested interest in this area other than profit motive (much like the original developer who hosed us the first time)? What exactly would we gain from this? My answer is nothing other than wasting a bunch of time during which the facility could making money for the community rather than paying interest and a non-local mega-food company.

As far as I'm concerned Eric Ryan and company have proven themselves already in business terms. The kid may have no experience, but he apparently has business savvy and street smarts that the mega-company that screwed this whole project up in the first place doesn't have.

I say lets quit screwing around with unknown quantities (like other mega-companies with slick brochures and a good line of BS) and go with a local that has already proven himself. City council needs to stick to what they know best - screwing up local demolition and road projects and fighting among themselves and with the mayor.

City council needs to stay the hell out of the one thing that is actually being turned into a success. The Vindicator needs to quit trying to make the one guy who has already proven he can do this look like a self serving criminal for offering to help.

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3One_Who_Stayed(237 comments)posted 3 years, 5 months ago

PS - The Titanic was built by professionals with experience - Noah's arc was built by amateurs with no experience.

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