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Mayor: City seeks Covelli sale, lease



Published: Tue, July 10, 2012 @ 12:05 a.m.

photo

Sammarone

By David Skolnick

skolnick@vindy.com

YOUNGSTOWN

The city expects to hire a consulting firm next week to do an operational assessment of the Covelli Centre, preparing the facility for a potential sale or lease, Mayor Charles Sammarone said.

“We’ll see the market” for selling the city-owned arena, he said.

“I don’t know anything about running these things. I feel comfortable we could lease it.”

The center has never made enough money to cover the debt owed by the city since it was built in 2005.

The center has produced operating surpluses the past few years, including $126,314 last year, and the city makes money from a 5.5 percent admission tax on tickets sold at the facility, including $215,578 last year.

But the city is paying about $920,000 this year for the center: $335,000 toward the principal of an $11.9 million loan the city borrowed to pay its portion of the $45 million project, and about $585,000 in interest.

Covelli, like most government-owned sports and entertainment centers, doesn’t turn a profit, Sammarone said. The mayor added that the city has the money to subsidize the center’s shortfalls for the next two years, but not likely past that.

“We don’t have the finances to pay for this in the future,” Sammarone said. “We’ve got a situation, let’s try to solve it now.”

The city expects to finalize a contract at the July 19 board of control meeting with PA Sports and Entertainment — with offices in Downingtown, Pa., and Cranston, R.I. — to conduct an assessment of the center’s operations and to write a request for proposals from those interested in buying or leasing the facility, Sammarone said.

The company specializes in operational consulting and assessments, pre-opening design and construction review, and financial services, according to its website.

The study would recommend ways to maximize profit and reduce costs of the center including advertising sales, naming rights and food services, said Anthony Donofrio, the city’s deputy law director who is the city’s point-man on this project.

“They’ll look at A to Z to running the center,” Sammarone said of PA Sports and Entertainment. “We’re moving forward.”

Sammarone first said on April 26 that the city should consider finding a buyer for the center, but that he isn’t sure the city can find a buyer.

On Monday, the mayor said, “I have a gut feeling there are people interested. If not, I’m 99 percent sure people are interested in leasing it.”

The lease, he said, would require a company to take over the debt payments.

The center could be a good investment for a company that could make money on parking, food and drinks and events, Sammarone said.

Once a contract with PA Sports is signed, the company would take about four to six months to do the operational assessment and prepare the request for proposals, Donofrio said.

“We’re not going to put it up for sale until we have the assessment done,” Sammarone said. “We’ll determine what we’ll do after the assessment.”


Comments

1georgejeanie(792 comments)posted 2 years, 1 month ago

Pay the right people off and turn it into a casino. Or just open as a casino without the states ok. The mafia did it for years, this would just be a more open venue than a bookie running numbers.

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2glbtactivist(245 comments)posted 2 years, 1 month ago

It's about time city officials faced up to the fact that the center was a very poor financial undertaking. It has cost us taxpayers millions of dollars we had no interest in spending. Now it is time to investigate why it was undertaken and who made money on the project.

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3Woody(451 comments)posted 2 years, 1 month ago

Send the bill to Traficant. He is ultimately responsible for this mess.

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4peggygurney(392 comments)posted 2 years, 1 month ago

I thought the past taxes had been forgiven, clearing the way to operate the centre with a clean slate??

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5hurrdurr(98 comments)posted 2 years, 1 month ago

It's a great public asset and should be treated as such. Privatization would be the ruin of it. I don't think the idea of shifting the financial burden to the county in this case is that out of line. It's heavily used and viewed as a positive aspect of Youngstown by those in the suburbs. $12 million spread out over the county is not a lofty burden if done the right way.

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6DwightK(1250 comments)posted 2 years, 1 month ago

Peggy, the state will not be collecting property taxes but the city still has to pay off the financing.

Does anyone know if Mahoning County's share of casino revenue could be used to pay off this debt? That seems like a perfect solution.

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7valleypolitics(88 comments)posted 2 years, 1 month ago

Raise the county bed tax 2% and let people from out of the area pay for the debt, that's how they do it in all the big city's around the country.

A sale or lease is a bad idea and has backroom deal written all over it. It's a public arena and lets keep it that way.

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8Tigerlily(488 comments)posted 2 years, 1 month ago

If the city can't make money off of it, why would a private investor be able to?

This stinks of back-room deal. Sammarone, people are watching you!

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9Jerry(495 comments)posted 2 years, 1 month ago

If anyone tries to transfer responsibility of this albatross to the county, I will be the first one lining up to block the streets of Youngstown in protest.

Why should those of us in the county have to pay for a stupid mistake made by the City of Youngstown (more than the incredible mindless waste of our federal tax dollars that are already gone)? You built it. You pay for it.

Thank you Jimbo. What a fantastic legacy!

Since big government is so wise at spending our money, why don't we give them control of our healthcare too...................Oh, wait, we just did.

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10lookingglass(7 comments)posted 2 years, 1 month ago

So it seems to me that even if the center is not creating a hugeprofit-it is doing better than 90% of all similar arenas around the country. Personally I think 2 things are going on here. One is a backroom deal with one of our wealthier citizans. (Maybe one that owns a certain fireworks company). And two I think Sammrone just likes being in the headlines. Seems to me he got his 15 minutes of fame and is taking full advantage. The Covelli Centre is an asset to this community. Eric Ryan and his staff are doing a great job.

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