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.
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.