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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.


Comments

1LLSmith713(1 comment)posted 1 year, 8 months ago

This is the most un-researched heaping pile of terd I have ever wasted my time reading…

This article proves why there needs to be stricter parameters put in place by the FCC…like, you should have to take an IQ test before you are allowed to become a reporter and spew crap all over the airwaves

Futhermore, WHY is this still NEWS?!? We had the Vice Presdient of the United States of America and Former President Bill Clinton at this very facility yesterday, and all you can conjure up is yet ANOTHER story about the Covelli Centre and its potential sale or lease?! I, for one, am tired of hearing about it. Get a fresh angle on the story...it's your job to do so.

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2valleypolitics(88 comments)posted 1 year, 8 months ago

Instead of Mahoning County raising the bed tax for the benefit of Trumbull County, they should have sent 1% to the city to help with the P&I on the loan.

Mahoning County should disolve the useless port authority and put the remaining bed tax money to better use, use here in Mahoning County.

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3lookingglass(7 comments)posted 1 year, 8 months ago

So what is it Vindy? On the front page of your paper you say the city refinanced the debt this year and the payment including interest and principle at 450k.....OK then, if that is the case, and the operations are projected to make 300k this year, and admission tax is projected to be 175k, does that not add up to 475k? Therefore that is a profit. Simple revenue minus expenses. Or is just me? And has anyone on this editorial board been to a Phantom's game? Are you suggesting that the 750 people at a game is the real and only reason why the centre is making money opertationally?. PLEASE are you kidding me??? It's because of all the awesome events that they host and sell out time after time after time. Don,t get me wrong the Phantoms are a great asset to this city. But it is a major over-staement to say they are the MAJOR reason why the centre has kept its head above water.Opinions are grand but give credit where credit is do.

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4bsafeandproud(45 comments)posted 1 year, 8 months ago

Our national election debate between the two parties is a microcosm of the debate at hand locally with the keep-it-or-sell-it question of the Covelli Center.

A big government run enterprise, pork barrel spending and deep deficits is written all over this noose-of-a-center hanging around Youngstown taxpayers' neck. The Democrat platform of taxing a city's, state's and an entire nation's way back into prosperity is on display at 229 E. Front St. What may look to be a beautiful facility on the outside, the sounds of Marilyn Manson and Motley Crue streaming from the inside can't distract the voters from the bottomless pit that eats away at the city's operating budget year after year. The black hole that has been created is the crown jewel of the Democrat party that has been in charge of the Mahoning Valley for the past 40 years.

Mayor Sammarone needs to be honored and supported for his independent stance in bucking against his liberal peers in his proposition of cutting the losses and running, especially with no hope of the Center ever being self-sustaining in sight. This failed experiment proves once again that free enterprise in the private sector is KING, and on a national & state of OH level in 7 days we have a choice between 4 more years of barren Covelli Center results in Washington DC or redirecting our $$ away from the public feeding troughs and back into the pocketbooks of job-creating businesses and middle-class households.

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5lookingglass(7 comments)posted 1 year, 8 months ago

RK330-Just what is wrong with the local management company running the centre? As I recall when the city hired a larger company from the coast, they never made a dime.. Give these folks some credit. And your right he has had some failures, but he has had more successes! I'm sure an opinionated fool like yourself could do a better job.Give me a break.

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