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Future of the Covelli Centre will not have city’s safety net

Published: Tue, October 30, 2012 @ 12:00 a.m.

Unless Youngstown Mayor Charles Sammarone and other advocates of separating the Covelli Centre from city government’s treasury are wrong, an independent study will find that there is no way the sports and entertainment complex will ever be self-sustaining — so long as City Hall is ultimately responsible for its operation.

The study by PA Sports and Entertainment of Dowingtown, Pa., and Cranston, R.I., was launched in September and should be presented to the city in a month. The company was charged with reviewing the operation of the $45 million center and evaluating the facilities.

We are confident a recommendation will be made for the city to either lease or sell the complex. Why? Because it is costing the public treasury $900,000 a year for the principle and interest on the $11.9 million the city borrowed to help pay for the construction.

The structure is now seven years old, and there isn’t a capital fund fed by revenue from semi-professional hockey, concerts and other events to pay for repairs and upgrades. Indeed, the last time a major repair job had to be done, the money came from the city.

So, while the center under the management of Eric Ryan, who is a concert promoter and former restaurant owner, has boasted revenue surpluses since 2009, the city’s safety net (read that general fund) provides room for failure.

But, with Youngstown’s future uncertain at best, and with city government anticipating a reduction in income tax revenue, it’s time to cut the Covelli Centre loose.

It is encouraging that an individual who is familiar with the operation of the Covelli and is a major reason the facility has been able to keep its financial head above water, is putting together a group to submit a lease bid.

Bruce Zoldan, owner of Youngstown Phantoms junior hockey team that calls the Covelli home and head of B.J. Alan Co. fireworks, has said that he and a group of investors are interested in talking to city officials about leasing the complex.

The obvious advantage for leasing is that the tax-exempt status would be maintained because the city would still own it. If it were sold, property taxes would be applied.

Mayor Sammarone, who has moved forward boldly to change the way city government operates, is committed to either leasing or selling the facility. He isn’t interested in making a profit, but does want any deal to provide the city with enough money to pay off its loan and also to get a little extra to help pay for an aggressive demolition program that he has launched.

There is a reason for getting this deal done as soon as possible. Sammarone has said that he does not intend to run for a full four-year term — he became mayor in August 2011 after then Mayor Jay Williams resigned to join the administration of President Barack Obama — and his departure could well result in a return to the old inefficient, wasteful ways of city government.

Federal grant

The Covelli Centre, which came about after then Congressman James A. Traficant Jr. secured a $26 million federal grant for what was called a convocation center, has been a financial burden for city government.

We are confident that national entertainment companies will be interested in taking over from the city, especially since there won’t be any property taxes if it is leased.

That puts the Sammarone administration in a strong position to negotiate the best deal for Youngstown.

For those who insist that the city should continue to operate the Covelli, we would offer this suggestion: Launch a campaign for a county-wide tax dedicated to the center and see the reaction you get for the suburbanites who are the most vocal advocates of the status quo.

It’s a matter of putting your money where your mouth is — and the city of Youngstown doesn’t have the money.

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