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Sammarone should explore all options for Covelli Centre



Published: Sun, April 29, 2012 @ 12:00 a.m.

There’s no point in revisiting the troubled history of the Covelli Centre other than to note that the warnings about Youngstown city government taking a huge risk in building a $45 million facility have come true. Seven years after the sports and entertainment complex in downtown Youngstown opened its doors, the financial picture is anything but bright. Despite announcements of operating surpluses, the reality is one that has preoccupied Mayor Charles Sammarone since he took office in August.

In 2005, the city borrowed $11.9 million to make the $45 million facility a reality. The largest infusion of funds was $26 million from the federal government in a grant secured by then- Congressman James A. Traficant Jr. For the first five years of the loan, only the interest was paid. Last year, a state law kicked in that required a payment toward the principal by Sept. 2. The total amount was $970,000.

This year, the city will pay $920,000 in principal and interest, which the mayor contends is much more than what the Covelli Centre is generating in operating surpluses and revenue from a 5.5 percent admission tax on tickets.

Faced with a future that’s bleak at best, Sammarone announced last week that he is exploring various options, foremost of which is the sale of the arena to a private firm. What forced the mayor’s hand was a notice from the Ohio Department of Taxation that the city’s long-standing request for tax-exempt status for the center had been denied. As a result, the department is seeking $4.7 million in delinquent taxes and penalties. The city would be in dire straits if it were forced to pay the bill.

Area state legislators are attempting to secure the exemption through legislation. A mid-budget review bill passed by the House contains a provision that forgives the $4.7 million debt and makes the Covelli Centre tax-exempt. The bill now goes to the Senate. But even if it passes, Gov. John Kasich may veto the bill because of some other provisions he finds objectionable.

LONG-TERM FINANCIAL PESSIMISM

Sammarone is looking down the road, and city government’s long-term financial condition does not inspire confidence. He correctly notes that while the almost $1 billion V&M Star projects are generating a sizable amount of money through income taxes paid by construction workers, once the plants are operating, employment numbers and tax revenue will drop.

There also is the very real possibility that the U.S. Postal Service’s collection and distribution center in Youngstown will close, costing the city $500,000 in income-tax revenue.

In explaining his decision to meet with SMG, the Covelli Centre’s national consultant, to discuss a possible sale, the mayor put the cards on the table:

“We still haven’t made enough money to make up the debt. We’re lucky that the debt hasn’t cost us police and other basic services.”

What if a private entity agreed to buy the center for the amount the city borrowed? The administration would have to review the federal government’s grant agreement to determine if such a transaction is permitted.

The reality of Youngstown, like many urban communities, is that the population is declining, the tax base is stagnant and the demand for basic services, especially police and fire, is growing.

Sammarone threw out the idea of using Covelli as a casino if the state constitution can be amended to add Youngstown to the list of cities that allow Las Vegas-style casinos. It’s a long shot.

The bottom line is that Youngstown city government, with all its problems of crime, deteriorating neighborhoods and population loss, is on the hook for millions of dollars.


Comments

1chuck_carney(499 comments)posted 2 years, 4 months ago

There is a reason for revisiting the troubling history of the Covelli Center. The former mayors and city council failed its citizens by refusing to share the pie (and the underlying risk at the time). Let's re-examine the profit and loss projection provided to the city officials who made the decision to hoard the potential rewards without evaluating the huge nascent risks in such a project.

Listening to Dan Rivers on WKBN radio, he is proposing that the county residents now bailout the avaricious city officials. Remember when Mayor Jay Williams wanted to ram the JEDDs down the county water user throats. Now may be the time to time to regionalize our assets, such as water, parks, public buildings, etc. and to reduce expenses by eliminating boards/commissions and duplicitous expenses.

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2author50(1121 comments)posted 2 years, 4 months ago

The Youngstown Schools are broke, yet oodles of money is owed to it by the government owned and controlled buildings - ie The Covelli Center, 20 Federal Plaza, Oak Hill. How about all the buildings and businesses downtown that have received taxpayer monies and owe - Anthonys on the River, the B&O and Rosetta Stone?

How about being a real newspaper and dig ininto the dealings of the millions of dollars that the city has given to these structures without any accountability?

When it comes to certain people and certain locations the city has more secrets about who, what where and when than The FED does with its money.

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3UticaShale(854 comments)posted 2 years, 4 months ago

There is a saying down South: " What is worse than being broke is when others know you are broke!"
The once great City of Youngstown is broke and many of us spectators from even far away, could see the uneducated and unexperienced council and leaders of Youngstown continue down the road of insolvency. But, what do you expect from a microcosym society wherein the majority of the inhabitants are entitled and takers. They elect and support entitled unqualified leaders to continue the cycle of demanding handouts from Uncle Sam. And, Uncle Sam is broke too.
You see Folks, down South and in your own rural areas here, us makers are silent, but we have known where you DEPENDENTS have been heading towards. Now the only answer to the CC and the City of Youngstown is BANKRUPTCY REORGANIZATION. And, no,no,no, there is no stimulus money coming your way anymore, the Chinese will not hear it, and they are getting enough Cruise's anyway to payoff our GM debt to them.
So you see Youngstown, you are your worse enemy and it is time to pay the piper.
Here is one solution, the City can distort the Land Reutilization Program and lease the hundreds of acres paying NO property taxes to the school board , which land is sitting dormant in the CITY LANDBANK , to the GIANT OIL companies who are willing to infuse millions for the acres. But then, the City of Youngstown can be in the OIL buisiness. The City can then have another enterprise "Youngstown Oil Company" and squander the money.

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4ytown1(392 comments)posted 2 years, 4 months ago

@ UticaShale, do you know the definition of a MORON, if not just go look in the mirror.

Oh, Texas is calling, you left your respect of anything but yourself there and need to come home to retrieve it.

Humility is something you probably have never known either. Maybe you should go elsewhere and find some before allowed to return here.

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5UticaShale(854 comments)posted 2 years, 4 months ago

"I love it, I love it, I love it! when they come out from under the rock. Look at Ytown None here, a perfect example of I bet a taker who got his feelings hurt by this maker. Typical entitled, when they have no intelligent response, they resort to stone throwing. His only attempt at rationale, humility?, that ain't even the subject, Moron?, out of context. Yes, one of the thouands of living problems of Youngstown in writing.

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6ytown1(392 comments)posted 2 years, 4 months ago

See UticaShale, your last comment shows what a MORON you are. It does not make any sense. And coming from some one who is "FROM THE SOUTH" that you make sure we are all aware of, shows us that you consider yourself smarter than anyone else.

No stone throwing, just calling it like it is, whats the matter, cannot take the truth? Or you just did not like what you saw in the mirror? Pretty ugly when you see the real truth isn't it.

I just reread your last comment over and over, and it still does not make any sense, typical MORON. GO back where you came from already, you apparently do not respect anyone her anyway.

By the way I am not one of the entitled you speak so lowly of. I can buy and sell people like you. See I am one of the ones who tells people like you what to do when you show up for work every morning, without people like me, you would be one of those entitled you speak of.

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7UticaShale(854 comments)posted 2 years, 4 months ago

Yes, you need to keep reading it over and over TAKER!
Yea I bet you are a leader, yeah right.
So if you can buy and sell people like me, what is your vocation?

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8ytown1(392 comments)posted 2 years, 4 months ago

I have watched you on here for some time just running your loudmouth bully attitude, what exactly is your definition of a TAKER?

As far as my vocation that is really none of your business. Just take my word for it that I am in a superior position over the like of you.

You just sound like a loud mouth bully, go away already. The south is lost without you.

By the way you are the one who appears to be the TAKER. Just hope you leave the drilling sites as clean as you found them or your windfalls will dry up as fast as you got them.

See for every action there is a reaction, What goes around comes around, do unto others as you would have them do unto you. These are wise words if you can comprehend them. Have a nice Day.

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9UticaShale(854 comments)posted 2 years, 4 months ago

Now YtownNone is giving us a lecture in basic physics, you go YTownOne!

Let the experiment continue, don't go away mad YTownOne, the experiment of "Taker" intellect is just beginning.

Notice how YTown cannot focus on the topic here and digresses into name calling. This is probably the result of inhaling glue as a kid, or it can even be the lead paint in most of the houses in Youngstown. He probably ate too much of it. Then he conttinues into "I'm a leader duh, you probably work for me duh....This is an example of very low dopamine and he probably continues his substition of the inbalance by drinking heavily and beating his dog.

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