YOUNGSTOWN — The city will make its final payment Tuesday on an $11.9 million loan it took out in 2005 for its portion of the Covelli Centre construction with plans to use future money generated by the facility for improvements and upgrades.

“It’s extremely important that it’s being paid off,” said Eric Ryan, president of JAC Management Group, which operates the center as well as the Youngstown Foundation Amphitheatre and Wean Park downtown for the city.

He added: “We’re in a building that’s (nearly) 20 years old and there are some renovations and upgrades we’d like to start considering. It’s been tough to do that when your charge is to pay for the building. We’ll now have funds to put back into the building.”

The city has been aggressive since June 2022 in paying off the loan. Of the $11.9 million owed in principal, it will have paid $5.1 million in about 20 months.

It made $1.7 million payments in June 2022, January 2023 and the final one will be made Tuesday.

The money to repay the loan comes from operating profits, a 5.5% admission tax on tickets sold at the center and amphitheater and property taxes the city receives that are specifically meant for its debt service payments, said Kyle Miasek, the city’s finance director.

The $1.7 million amounts are the largest principal payments the city has made for the facility.

Before that, the city paid $1.46 million in 2021 and $900,000 in both 2019 and 2020.

The city borrowed $11.9 million in 2005 to pay its portion of the center’s $45 million overall cost. Most of the construction expenses were covered by $26.8 million in federal grants obtained in 2000 by then-U.S. Rep. James A. Traficant Jr.

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

Interest payments on the $11.9 million cost the city about $6.6 million.

The interest rate in 2007 was 6.88% so the city paid $818,720 in interest alone that year.

The interest rate in 2011, the first year the city paid toward the principal, was 5.34%.

It has decreased since then. It was 1% in 2012, 1.5% in 2013, 1.65% in 2014, 1.9% in 2015, 1.75% in 2016, 2.44% in 2017, 3.24% in 2018, 3.1% in 2019 and 1% in 2020, 2021 and 2022, before going up to 4.13% in 2023.

The admission tax, first imposed in 2011, has generated almost $3 million.

The operating profits since 2009 are about $3.5 million.

“Over time, JAC and Eric Ryan turned this particular venue into a destination and one of the tour stops for entertainers, especially country” music acts, Miasek said.

The operating profits and admission tax will go toward improvements at the center, Miasek said.

Not having to pay debt service on the facility will “free up funds for new projects. One could be a combined police and fire safety campus,” Miasek said.

The city administration on Dec. 18 proposed a $45 million safety-service building. The administration wants to use $10 million to $15 million in American Rescue Plan funds for the project and seek state and federal grants. Any additional needed money for the project would be borrowed, Miasek said. Council hasn’t committed to the project.

COVELLI WORK

The downtown entertainment center, which opened in October 2005, cannot wait any longer for improvement work, Miasek said.

City council on Nov. 1 authorized the board of control to spend up to $2 million to hire a contractor to repair the center’s roof. That project should start in the spring.

Water is leaking into the center’s kitchen and into some of the loges, Miasek said.

“It’s a big project, but it is needed,” he said.

Ryan added: “The roof is an issue. We’ve been patching. We have to do it right.”

As part of a five-year contract extension signed in June 2022 with two five-year options to continue playing its home games at the center, the Youngstown Phantoms hockey team agreed to pay the $1 million cost of a new ice plant, which makes and freezes the ice at the rink.

The center in recent years also made renovations to its Jumbotron video display system and to its VIP area, Ryan said.

Future replacements and upgrades are expected to the center’s audio-visual equipment, the hockey rink dashboards, new digital signs, replacing the 1,800 chairs on the floor, and building a storage facility for those chairs and other equipment, Ryan said.

“We have a covering for our chairs, but they’re weathered as we leave them on the side of the building,” he said. “Replacing 1,800 chairs on the floor is not an inexpensive project, but it has to be done. Also, our storage facility is so inadequate. We have to store stuff outside and rent trailers. We need to put an actual storage facility on the back of the building. I hope to tackle that in the next year.”

Miasek said: “We have to put money back into the aging infrastructure. It’s over 18 years old.”

Ryan said: “Seven years ago, if I went to the city and said, ‘We need new digital signs,’ they would have said, ‘No way.’ It will be nice to do those upgrades. We’ll get together a master plan for the next five to 10 years and work to improve the facility.”

Ryan also said he wants a back exit for vehicles to leave the parking lot in order to avoid congestion.

“There were a lot of naysayers and we were able to get it paid off in less than 20 years,” he said. “I’m grateful to be part of it. Moving forward we’re only going to get better.”