facebooktwitterRSS
- Advertisement -
  • Most Commentedmost commented up
  • Most Emailedmost emailed up
  • Popularmost popular up
- Advertisement -
 

« News Home

Youngstown must deal with Covelli Centre fiscal reality



Published: Sun, May 1, 2011 @ 12:00 a.m.

The city of Youngstown can no longer put off paying the principal on the $11.9 million loan it secured in 2005 toward construction of the $45 million sports and entertainment complex, now called the Covelli Centre. Thus, the administration of Mayor Jay Williams must come up with $300,000 by Sept. 2 — in addition to the $670,000 it was prepared to pay this year in interest.

A million here, a million there and soon the revenue-challenged, shrinking urban city is talking real money — money that must come out of the general fund. That’s because the Covelli Centre, which the city owns, will never generate the revenue needed to make it truly self-supporting. While the facility, which opened for business in 2006, has shown operating surpluses in four of the last six years, the accounting has not taken into consideration the $11.9 million loan.

If Youngstown didn’t have the long-term debt obligation, the $1 million each year could pay for demolition of dilapidated structures, crime-fighting, or even job-creation initiatives. Instead, the 800-pound financial gorilla will be at the table every time there is a discussion about the city’s finances. That reality should force the mayor, his financial team and members of city council to take a long, hard look at government’s revenues and expenditures.

Dealing with debt

Until this year, Youngstown got away with paying the interest only — it ranged from $600,000 to $800,000 a year — and ignored the principal. But state law requires a payment toward the principal by Sept. 2.

The city must now try to sell 20- to 30-year bonds in the open market, or seek to refinance the loan. A lot depends on the interest rate the city would have to pay.

Regardless of the option chosen, Youngstown will have an annual payment on top of fiscal uncertainties brought on by the loss of population, the decline in income tax revenue and the expected reduction in state and federal funding.

We are pleased that the mayor has acceded to council’s demand that the administration seek proposals for the food-and-beverage contract at the Covelli Centre. The current provider, Centerplate, is willing to walk away from its contract for the $467,762 it would be owed.

Council has also adopted the proper stance on the proposed amphitheater that would be built adjacent to the arena. Youngstown cannot afford to take on another financial obligation. If Covelli Centre Director Eric Ryan believes the project would be an economic boon, he should seek financing outside City Hall.


Comments

1ytown1(392 comments)posted 3 years, 4 months ago

Whoa there on the concession provider.

Was it not stated to only bring in a profit of around $100K a year if Eric Ryan's Company took over from Centerplate?

There is only 5 years left on the contract?

More of that Valley accounting going on here huh? Or is the reward Eric was wanting due to the fact he has been working for peanuts? More nepotism at it's finest.

Suggest removal:

2richardpark123(1 comment)posted 3 years, 4 months ago

Before you refinance, check your credit report for anything that could foul up a refinance. You don't want to lay out the money if a credit problem is going to keep you from refinancing, search online for "Mortgage Refinance 123" I just used them and they are the best, they got me 3.113% rate

Suggest removal:

3Springman(235 comments)posted 3 years, 4 months ago

A few months ago, I had to go to Baltimore on business. The entire downtown was in griodlock. All the hotels were full. The restaurants had long waiting lines. The reason was that there was a "fantasy" convention in town. It looked like haloween, with people in costume everwhere. The local businesses played along as some of the waitresses were dressed for the occasion.

Convention properties have been built in many other cities, so there is a lot of competition. To remake itself into a convention destination takes imagination and insight.

What if Youngstown were the national headquarters for every minor sport or hobby that does not already have one?

How about the national badmitton tournament city? Tiddlywinks? Quoits? Canasta? One a month might put a lot of people to work and might pay off the debt.

Two a month might make a lot of people rich.
The list could be endless.

Suggest removal:

4truth101(20 comments)posted 3 years, 4 months ago

It's doubtful that the Vindy will ever look deeper into connecting the dots or who the players really are. It might find itself on the list!

The entire Valley suffers from a long list of poorly thought-out, poorly researched and planned projects that will never pay out. In addition to the Covelli Center, add the airport and current downtown redevelopment to the list. We have let a powerful group of cloaked and hidden players use small-minded thinking and a "me too" mentality rape the people and the reputation of the Valley for their own greedy potential gain. It won't stop until the public knows who they are and where the dots are really connected!

What is certain is that we can never recover and move forward with progressive, sustained growth until we spend the money on meaningful, corrective projects that build uniqueness and quality into who and what we are. And it won't be Tiddlywinks tournaments! We have the face the financial reality of past bad mistakes and cut our losses by pulling the plug on facilities and projects that never will succeed. How many times and how many years will we continue to do the same thing time after time or year after year before we realize that the next time or next year is not going to magically and miraculously work?

Suggest removal:

5TAXEDOFF(118 comments)posted 3 years, 4 months ago

Excellent posts by THETHINKER and TRUTH101

Nothing else need be said.

Suggest removal:

6apollo(1227 comments)posted 3 years, 4 months ago

Yup, THETHINKER and TRUTH101 have their facts in order. Wasting money on sports venues when you got a shrinking population base is just not very smart. McKelvey originally said the same thing. I'll bet some who profited from the waste, convinced him otherwise.

Suggest removal:

7Jake(112 comments)posted 3 years, 4 months ago

Another government "investment" loser, not unlike our "investment" in General Motors that is - shockingly - losing billion$.

The government does not "invest" in anything. It throws our money at political friends. There's a HUGE difference.

Suggest removal:


News
Opinion
Entertainment
Sports
Marketplace
Classifieds
Records
Discussions
Community
Help
Forms
Neighbors

HomeTerms of UsePrivacy StatementAdvertiseStaff DirectoryHelp
© 2014 Vindy.com. All rights reserved. A service of The Vindicator.
107 Vindicator Square. Youngstown, OH 44503

Phone Main: 330.747.1471 • Interactive Advertising: 330.740.2955 • Classified Advertising: 330.746.6565
Sponsored Links: Vindy Wheels | Vindy Jobs | Vindy Homes | Pittsburgh International Airport