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Consultants to analyze operations at Covelli



Published: Sat, September 8, 2012 @ 12:05 a.m.

By David Skolnick

skolnick@vindy.com

YOUNGSTOWN

A consulting firm will start an assessment of operations at the Covelli Centre as early as next week as the mayor considers leasing or selling the arena.

The city’s board of control voted Friday to hire PA Sports & Entertainment — with offices in Downingtown, Pa., and Cranston, R.I. — to conduct the assessment over a four- to five-month period. The city is paying the company $10,000 a month up to $50,000 for the study.

“I’ve talked for several months about bringing in a consultant to assess the efficiency of the Covelli Centre,” said Mayor Charles Sammarone, chairman of the board of control. After the study, the city will “see if we move forward to sell or lease it.”

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

The center has had annual operating surpluses since 2009, and makes money from a 5.5 percent admission tax on tickets sold at the facility.

But the operating surplus and admission tax, $341,892 last year, don’t cover the debt.

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 in 2005 for its portion of the $45 million project, and about $585,000 in interest.

Eric Ryan, the center’s executive director, recently said he expects the arena to earn $500,000 to $600,000 this year in operating surplus and admission- tax revenue.

Sammarone said he’s concerned the city won’t have the money to continue subsidizing the center in about two years.

“This is not an uncommon tale, but it’s fixable,” said Steve F. Costa, a PA principal. “The center drives economic development and jobs, and brings people” downtown.

PA will look at leases, contracts, expenses and the cost of operating the center; compare them to similar-sized facilities, and then draft recommendations to make the center more efficient, he said.

“It’s a great market,” Costa said. “It’s a good building, great location. We’ll look at the financials and determine how it can run better.”

Selling a city-owned facility such as the Covelli Centre is rare, but leasing is certainly an option, Costa said.

“We’ll look for the right solution,” he said.


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