Covelli Centre, amp post big loss
YOUNGSTOWN — The city-owned Covelli Centre and Youngstown Foundation Amphitheatre had its second-worst third quarter in more than a decade.
The two facilities, operated by JAC Management Group, lost $115,558 in operational costs between July and September. That’s better than the $135,802 it lost in 2018’s third quarter. But you have to go back to 2008, when the center lost $141,775, to find a worse third quarter. Actually, the 2018 and 2019 third quarters are the worst of any quarters since 2008.
July to September “is never a good quarter,” said Eric Ryan, JAC’s president. “That combined with continued start-up costs in this quarter for the amphitheater” caused the loss. “We won’t have those start-up costs next year and we believe that will make a difference.”
The amphitheater had about $70,000 in start-up costs, he said, for food and beverage expenses and additional payroll as the new facility opened June 14 and had most of its shows in the third quarter. There also was landscaping work and a point-of-sales system had to be implemented. It spent about $100,000 in start-up costs during the second quarter, he said.
“We also had a slow quarter inside the arena,” Ryan said. “Also, the hockey season started earlier and we had to build the ice and make repairs to the ice plant.”
Historically, the center’s worst quarter is between July and September. Of the 14 third quarters since it opened, it has had an operating surplus only three times and two were modest — $3,658 in 2015 and $4.040 in 2016.
Indoor arenas do poorly during the summer months as most musical acts prefer to play outdoors during that time, Ryan said.
That was one of the reasons for building the amphitheater, but because the opening date of the facility was uncertain earlier this year, fewer shows were booked there this year.
During the first nine months of this year, the facilities have a $139,853 operating surplus — largely because of a $229,386 operating surplus in the first three months of the year. The budgeted surplus for the first nine months was $118,629.
The facilities are budgeted to make a $75,000 operating surplus during the final three months of the year.
Ryan expects to exceed that and finish the year with an operating surplus of more than $200,000.
Shows booked for the rest of the year include two concerts by the Trans-Siberian Orchestra, a concert headlined by Five Finger Death Punch, an Old Dominion concert and seven Disney on Ice performances.
While the two facilities lost money on the operational side, a 5.5 percent admission tax on tickets sold for events at the facilities generated $67,624 for the city during the third quarter, said Kyle Miasek, Youngstown’s interim finance director. For the first nine months of the year, the admission tax has made $174,078 for the city.
Among the major shows at the amphitheater during the third quarter were concerts by Michael Stanley and Donnie Iris with about 4,500 in attendance; Chicago with about 4,000; Earth, Wind and Fire with 3,000-plus; and Brett Eldredge with 3,000-plus. The best attended event at the center was a Hall and Oates concert with about 4,500.
A Steely Dan show that had to be moved from the amphitheater to the center because of weather did poorly. Ryan declined to give the attendance number, but those who went to the show said there were no more than 2,500 in attendance.
If the two facilities make $450,000 in operating surplus and admission tax combined this year, that would only be half of the principal payment made by the city this year on the center.
The city borrowed $11.9 million in 2005 to pay its portion of building the $45 million Covelli Centre.
The city still owes $7.46 million in principal after making a $900,000 payment toward principal this year.
It paid nothing in principal until 2011 and has increased its annual payment.
The city also borrowed $4 million from the U.S. Department of Housing and Urban Development to pay for the $8 million amphitheater. The rest of the money came from naming-rights deals.
The city will repay the HUD loan over 20 years starting in 2020. With interest, those annual payments are $205,180.