Covelli’s 3Q loss is smaller than expected
By David Skolnick
While the city-owned Covelli Centre had an operating deficit for the July-to-September quarter, it was a lot less than expected.
The center’s operating deficit for those three months was $36,814. It was budgeted to lose $121,089 for the time period.
The third quarter is “the most challenging” for indoor arenas, such as Covelli, because most shows are held outdoors during that time, said Eric Ryan, the center’s executive director.
There were only a handful of events at the center during those three months, most notably a Bob Dylan concert with a crowd of about 5,000, and an outdoor blues festival featuring George Thorogood.
Last year was the only time the center had an operating surplus during the third quarter, largely because of a Barry Manilow concert.
The facility has an operational profit for the year of $251,267 as of Sept. 30, according to data provided Monday by the city.
The last quarter of the year is expected to have an operating profit of $52,851, Ryan said. He added that “based on our projections, we will in fact hit those figures.”
That means this will be the best year for the center in terms of an operating surplus.
Its best year is 2009 with a $153,950 surplus.
Ryan expects an operating surplus of $300,000 for this year.
Also, this year could be the first time since the center opened in October 2005 that the city could see a profit from the facility.
The city has paid between $579,925 and $773,500 a year in interest payments on the $11.9 million loan it borrowed in 2005 as its share of the $45 million center.
But the city only will pay $113,250 this year in interest as well as $300,000 toward the principal.
Ryan also said he expects about $175,000 this year in admission tax revenue.
The city made $13,643.34 for the third quarter from a 5.5 percent admission tax on tickets sold at the arena. As of Sept. 30, that tax has brought in $120,458.26.
Just last week, the city signed a one-year contract with Covelli Enterprises to retain the facility’s naming rights.
Covelli paid $175,000 for the rights, up from $120,000, which it paid annually for the past three years.
The city is having an operational assessment done on the center to help it determine if it wants to look at leasing or selling the facility.
The report should be done in another month, the mayor said last week.
Leasing is a strong possibility, but selling “could be a problem,” Mayor Charles Sammarone said last week, because the center could lose its tax-exempt status if purchased by a for-profit company.