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City plans biggest Covelli principal payment

YOUNGSTOWN — The city plans to pay $1.46 million in principal this year toward the loan it took out in 2005 to fund its portion of the Covelli Centre.

It would be the largest amount ever paid by the city toward the facility’s principal. The previous largest amount was $900,000 in both 2019 and 2020.

City council will consider legislation Wednesday to approve a principal payment toward the center.

The city borrowed $11.9 million in 2005 to pay its portion of building the $45 million center.

It still owes $6.56 million in principal. That would drop to $5.1 million after the payment is made in July.

The center has been virtually shut down for the past 14 months because of the COVID-19 pandemic. The only events at the center since mid-March 2020 have been Youngstown Phantoms hockey games, the Men’s Rally in the Valley on Oct. 10, ice hockey and figure skating rentals and a few city-sponsored and charity events. It’s also been used as a COVID-19 vaccination clinic by the city health district.

But the center and the Youngstown Foundation Amphitheatre, which are both operated by JAC Management Group, still managed to finish 2020 with a $10,915 operating surplus. That’s because JAC received $353,310.59 from the federal Paycheck Protection Program to cover payroll and benefits, as well as utility costs.

“The PPP funding allows for the city to operate,” Finance Director Kyle Miasek said.

Also, $115,815 was made last year from a 5.5 percent admission tax on tickets for events at the facilities with virtually all of it from prepandemic events from January to mid-March.

Asked why the city is planning such a large principal payment, Miasek said: “We didn’t have any expenditures at all for improvements. We got admission tax. There were no expenditures and with the admission tax, so we have all this cash. I want to buy down as much as we can.”

The $1.46 million payment, he said, is contingent on the city getting a low interest rate, which he doesn’t anticipate being an issue.

The city’s interest rate on the $6.56 million last year was 1 percent, or $65,600, Miasek said.

In 2011, the first year the city paid money toward the principal, the interest rate was 5.34 percent. Since then, it was 1 percent in 2012, 1.5 percent in 2013, 1.65 percent in 2014, 1.9 percent in 2015, 1.75 percent in 2016, 2.44 percent in 2017, 3.24 percent in 2018, and 3.1 percent in 2019, he said.

The city paid nothing in principal until 2011, paying only interest during those early years.

The interest rate was much higher during that time. For example, it was 6.88 percent in 2007 on $11.9 million so the city paid $818,720 in just interest that year.

“I’m hoping for 1 percent again this year,” Miasek said. “You have to go to the open market to see if people will buy our (loan). I’m optimistic because of our track record. We’ve shown our ability to pay.”

At that rate, the city will have paid the rest of the money owed on the center in three or four years.

Eric Ryan, JAC president, said: “It’s fantastic to pay off the Covelli Centre because before you know it, it will be 20 years old since it was built. The facility will need to be repaired, freshened up and remodeled.”

JAC is still finalizing its first quarter financial numbers though Ryan described them as “ugly.”

But JAC should find out shortly how much it’s getting from the $17 billion in funding for entertainment venues though the Shuttered Venue Operators Grant, originally called the Save Our Stages Act. It was included as part of the last $1.9 trillion federal COVID-19 stimulus package.

With Gov. Mike DeWine’s recent announcement that all COVID-19 pandemic restrictions will be lifted June 2, including how many people can attend entertainment events, Ryan said he’s been very busy booking events for the center and amphitheater.

In just the past few days, Ryan said he’s scheduling six shows for the amphitheater.

“We couldn’t do the shows without 100 percent capacity,” he said. “We’re going to have a great summer.”

City plans biggest Covelli principal payment

YOUNGSTOWN — The city plans to pay $1.46 million in principal this year toward the loan it took out in 2005 to fund its portion of the Covelli Centre.

It would be the largest amount ever paid by the city toward the facility’s principal. The previous largest amount was $900,000 in both 2019 and 2020.

City council will consider legislation Wednesday to approve a principal payment toward the center.

The city borrowed $11.9 million in 2005 to pay its portion of building the $45 million center.

It still owes $6.56 million in principal. That would drop to $5.1 million after the payment is made in July.

Read more in Monday’s Vindicator.

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