By David Skolnick
Led by a sold-out Carrie Underwood concert, the city-owned Covelli Centre’s second quarter, April to June, resulted in a $205,857 operating surplus.
Except for last year, with a $229,740 operating surplus, this is the strongest second quarter for the downtown sports-and-entertainment facility since it opened in October 2005.
“We’re very pleased with our results for the second quarter and the year so far,” said Eric Ryan, the center’s executive director.
The center hosted 29 events with about 64,000 people in attendance from April to June, he said.
The biggest event was the April 11 sold-out Underwood concert with 6,100 in attendance, Ryan said.
Other big events in the quarter included a concert by Shinedown, WWE wrestling, “The Price is Right” show, and eight Ringling Bros. and Barnum & Bailey circus performances.
The center had projected a $106,466 operating surplus for April through June, and almost exceeded that amount by $100,000.
But those quarterly projections are just projections made the previous year, Ryan said. The yearly projection of a $300,000 operating surplus is more accurate, he said.
Center officials projected an operating surplus of $98,979 for the first three months of the year, but finished with $60,248.
Through the first six months of the year, the center has an operating surplus of $266,093 and had projected a surplus of $205,445.
The center had projected a loss of about $13,000 for the third quarter, July to September, the slowest time of the year for indoor arenas, Ryan said.
“We should be around the budgeted amount,” he said.
The center had a $320,787 operating surplus in 2012, the most it ever made. Before last year, the largest operating surplus was $153,950 in 2009.
Also, the city’s 5.5 percent admission tax on tickets sold for events at the center generated $61,873 during the second quarter. Including the first three months, $106,937.30 has gone into the city’s general fund from the admission tax.
The center expects to finish the year with about $175,000 to $200,000 in admission tax.
The center also had projected $53,584 in profit in the first six months of the year from the sale of food and beverages. That service was brought in-house last year.
The figure for food-and-beverage sales during the first six months won’t be available until next week, but Ryan said it has “far surpassed our budgeted expectations.”
Even without food-and-beverage revenue, the center has generated $363,030.30 as of June 30.
As it did last year, the center is likely to turn a profit this year.
The city paid $325,000 last year toward the principal of an $11.9 million loan it received in 2005 as its portion of constructing the $45 million facility. It also borrowed $113,250 last year to pay the interest on the principal.
The center turned a profit of $67,261.09 last year when comparing revenue — the operating surplus, admission tax and food-and-beverage sales — to expenses — principal and interest payments.
The city still owes $11,325,000 in principal.
Finance Director David Bozanich said the city hasn’t determined yet how much principal will be paid, but documents show the city expects to pay $315,000 early next month. The city borrows money for interest payments in early September each year.
Last year’s interest rate was a record low 1 percent. The interest rate this year is expected to be about 1.5 percent, Bozanich said.
If the city pays $315,000 toward the principal, it would owe $11,010,000. Interest on that amount at 1.5 percent is $165,150.
That means the city would pay $480,150 in interest and principal this year.
If the center reaches its goals of $300,000 in operating surplus, and at least $175,000 in admission tax, it will need only about $5,000 in sales of food and beverages to make a profit this year — and it has already greatly exceeded that amount.