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Covelli Centre surplus surges



Published: Fri, July 27, 2012 @ 12:01 a.m.

By DAVID SKOLNICK

skolnick@vindy.com

YOUNGSTOWN

Two sell-out concerts and several other well-attended events led the Covelli Centre to its best second quarter in the arena’s history.

Also, the $229,740 operating surplus for April through June 2012 is the second highest of all quarters at the facility, which opened in October 2005.

The only stronger quarter was January through March 2009, which was highlighted by a boxing card headlined by then-middleweight champion Kelly Pavlik. The center’s operating surplus that quarter was $242,340.

The center had 22 events between April and June 2012, including sell-out concerts by Sugarland and Eric Church, and the arena had a total attendance of 45,445, said Eric Ryan, the facility’s executive director.

Also, concerts by Earth, Wind and Fire and the Trans Siberian Orchestra were well attended.

Though the third quarter is likely to lose money — July to September is typically the slowest period for the center and other indoor arenas — Ryan expects a strong fourth quarter.

The center’s operating surplus for the first six months of this year is $288,075.

The center should end the year with an operating surplus of between $250,000 and $300,000, Ryan said. Its best year was 2009 with a $153,950 surplus.

“This past quarter is indicative of the way we’re going,” he said. “We had a ton of great shows. Our numbers will continue to improve [over the years]. We believe that operationally, we’ll get better. This isn’t a fluke.”

The center has seen a 30-percent increase in its luxury suite and advertising revenue over the past four years.

Youngstown State University, Sweeney Chevrolet, Rollin’ Smokes, First Place Bank, PNC Bank and Farmers Insurance have either signed on as new sponsors or increased their level of sponsorship in recent months, Ryan said.

Also, the center is negotiating with Covelli Enterprises on keeping the facility’s naming rights, Ryan said.

“We had a good quarter,” said Mayor Charles Sammarone. “When you have good shows, you have good attendance. For a quarter report, it looks good. If we could do that all year, that would be great.”

But even with a strong quarter, “it’s still tough to make a go of” operating the center and make enough money to pay its debts, Sammarone said.

The city plans to finalize a deal shortly with a consultant to do an assessment of the efficiency of the center as well as prepare proposals seeking to sell or lease the facility, Sammarone said.

Selling the center will be a challenge because an owner would have to pay property taxes, Sammarone said.

The state passed a bill in May to forgive the city for $4.75 million in delinquent taxes and penalties, and agreed to give the arena tax-exempt status as long as it’s owned by the city.

Leasing the center is a better option than buying it because the facility would remain tax-exempt, Sammarone said.

“I think there’s value in leasing and believe there will be a number of companies interested in it,” he said.

In addition to the $229,740 surplus in the year’s second quarter, the city also made $69,797 from a 5.5 percent admission tax on tickets sold at the arena.

The operating surplus and admission tax, however, don’t make enough to offset the principal and interest owed on the $11.9 million the city borrowed in 2005 to help fund its share of the center’s $45 million construction cost.

The city will pay about $920,000 this year for the center, $335,000 toward the loan principal and about $585,000 in interest. The city paid principal for the first time last year, $275,000.

But Ryan expects the admission tax — $106,815 for the first six months of the year — to make about $250,000 to $300,000 in 2012 for the city.

Between the $250,000 to $300,000 expected in operating surplus for the year and similar amounts for the admission tax, the center would give $500,000 to $600,000 to the city to help offset that $920,000 expense, Ryan said.


Comments

1oldskool(97 comments)posted 2 years, 2 months ago

This is great news for the city! keep bringing good shows to Youngstown like the upcoming Manson/Zombie tour! I have commented in previous posts of the ideal space to be offered to bring in big talents who are tired of performing in the mega arena's. There is not a bad seat in the facility for viewing the stage. It's a great small arena feel.

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2ROBERT(138 comments)posted 2 years, 2 months ago

Lets build another one! This financial picture is so good that Ytown will again be the shining city on the river instead of a money hole for all of the citizens in the area.

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3bmanresident(597 comments)posted 2 years, 2 months ago

Its nice to see that Youngstown State raised the tuition rates an obscene amount and added many frivolous fees that pilage the student's pocket books, and then they waste that money on silly sponsorships of a little room in the Covelli Centre. What a joke that university is!

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4NoBS(1959 comments)posted 2 years, 2 months ago

bmanres - get a grip. You hate YSU. We get that. Now unclench your tiny little fists and move on. This story isn't even about YSU.

I'm not the biggest fan of the Covelli Center, but it's nice to see it making money.

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5NoBS(1959 comments)posted 2 years, 2 months ago

Revolta, it's because that would be a huge waste of taxpayer money. Do you really expect YSU to pay money to the Covelli Center to use their space, when YSU (the taxpayers) already own a perfectly fine space? Their "dumpy little gym" holds the same number as the Covelli Center, BTW. Maybe more, depending on the configuration of the Covelli.

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6sue(172 comments)posted 2 years, 2 months ago

Maybe Tim Ryan could call his old boss Jim Traficant and ask him how to get federal dollars to pay off the balance of the mortgage.

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7Silence_Dogood(1356 comments)posted 2 years, 2 months ago

Sue
He would have better luck calling his NEW Boss Nancy Pelosi for money.

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8ysuwin(58 comments)posted 2 years, 2 months ago

YSU does not play the Arens for a variety of reasons. One, they don't have to pay to use Beeghly Center which is on their own campus and needs to have a set number of events per year. Second, Beeghly holds more than the Covelli Center. Third, YSU keeps all sponsorship monies at Beeghly. It would be hard/impossible to come up with a fair split at the Covelli Center. Lastly, YSU would have to pay for increased police and ushering. At the end of the day, why would YSU want to pay to use a facility smaller than theirs, losing out of advertising and pay more in operating costs?

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9Owlguin(49 comments)posted 2 years, 2 months ago

I think it's a great facility for the community, but let's be realistic. If the city built a building for me and allowed me to operate a business out of it tax-free, I could be "profitable" too. Also, if you take out the two sold events, the average attendance on the 20 remaining events is less than 1,700. They should try to bring in more events for the summer...people would probably be glad to get out of the heat!

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10Jerry(500 comments)posted 2 years, 2 months ago

"SURPLUS" "PROFIT"

You're all kidding.......right????

The operating "surplus" does not even cover the interest payment for this year.

What about the $45 million that was "invested"? $25 million of this was my federal tax money and I will never forgive or forget the grotesque irresponsible waste.

What about the $10-11 million that is still owed?

What about the $4 million or so that has already been paid in interest?

What about the $4.75 million in taxes that any normal business would have had to pay, that was magically waived by the State so we don't have to admit what a colossal blunder this was.

The silly notion that there is a "surplus" or a "profit" is absurd.

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11southsidedave(4784 comments)posted 2 years, 2 months ago

Some good news coming out of Youngstown for a change.

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12TylerDurden(367 comments)posted 2 years, 2 months ago

It is not a profit. Unless the place starts having a bottom line greater than the interest and principal it owes, it's not a profit.

Youngstown math and business accounting.

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