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Covelli Centre lost $1,221 between July and September



Published: Tue, October 29, 2013 @ 12:00 a.m.

By David Skolnick

skolnick@vindy.com

YOUNGSTOWN

The Covelli Centre had an operating loss for the July-to-September quarter, but it was one-tenth the amount that was projected.

The city-owned facility’s operating deficit for the year’s third quarter was $1,221. It was budgeted to lose $12,414 for those three months.

“We’ve learned to reduce our costs during that quarter,” said Eric Ryan, the center’s executive director. “Until we build an amphitheater to have events outside, it’s always going to be difficult to compete during that quarter. People want to be outside that time of year.”

During the third quarter, the center had five concerts and a Cirque Musica circus performance. An Aug. 16 Pat Benatar concert had the best crowd among the events.

“It looks good,” Mayor Charles Sammarone said about the center’s financial figures. “As far as I’m concerned, [Ryan’s] doing a good job. We’re pleased with his work.”

This is the smallest operating loss for the third quarter in the center’s history. The center, which opened in October 2005, has had only one operating surplus in the third quarter. That was in 2011 with a $35,230 surplus, almost entirely because of a Barry Manilow concert.

As of Sept. 30, the center had a $264,872 operating profit this year. Center officials had projected a $193,031 profit through the first nine months of this year. The operating profit is 37.2 percent more than the projection.

The projected operating surplus for the last three months of the year is $106,969.

“We probably won’t get to that number, but we should get reasonably close,” Ryan said.

The facility has two country music concerts booked for the year’s last quarter — Justin Moore on Nov. 16 and Trace Adkins on Dec. 4. There also will be seven Disney on Ice shows between Dec. 12 and 15. Ticket sales for all the events are doing well, Ryan said.

Already, the center had a concert with rock bands Styx and Kansas on Oct. 17 with about 3,000 in attendance, and two Disney Junior Live on Tour stage shows this past Saturday that attracted 2,200 to each.

The center had projected a $300,000 operating surplus, which Ryan said Monday he expects to exceed this year.

The center had a $320,787 operating surplus in 2012, the most it ever made in a single year.

Also, the city’s 5.5 percent admission tax on tickets sold for events at the facility generated $22,819 in the third quarter. As of Sept. 30, the tax has brought $167,351 into the city’s general fund.

By changing the food-and-beverage vendor last year, the center made an additional $89,301 through the first six months of the year. The center’s contract with the city requires it to report those amounts twice a year compared to quarterly for operating surplus and admission tax.

The center had estimated $60,000 to the city for food and beverages this year, and already has exceeded that.

As it did for the first time in 2012, the center will turn a profit this year.

The city paid $315,000 this year toward the principal of an $11.9 million loan it borrowed in 2005 as its portion of constructing the $45 million center. With this payment, the city still owes $11,010,000 on that loan.

In addition to the principal payment, the city is paying $154,140 in interest. The interest rate is 1.4 percent.

Between principal and interest, Youngstown will pay $469,140 this year.

Through the end of September, the center has made $432,223 in operating surplus and admission tax. Add in the $89,301 for food and beverages through the first six months and that amount grows to $521,524.

Also, the center has leases for all 20 luxury suites it rents.

“This is the first time we have sold out all of our luxury boxes,” Ryan said.

There are six other suites that it rents event by event rather than through lease contracts, he said.

Meanwhile, Ryan is negotiating a reduced contract with SMG, Covelli’s national consulting firm. The existing deal expires at the end of the year.

SMG would continue to help Ryan book events at the center under a new deal. But Ryan said it would be for less money.

SMG is making $86,000 annually for its consulting fee with bonuses when the center reaches certain operating surpluses. SMG made close to $40,000 last year in bonuses, and will make about the same this year.


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