Story

Published: Sunday, December 17, 2006

First year proved to be a challenge

Print Story

Email to Friend

Discuss this story

Youngstown and center officials say they've learned from the mistakes made.

By DAVID SKOLNICK

CITY HALL REPORTER

YOUNGSTOWN — While the Chevrolet Centre experienced numerous problems in its first year of operations, Mayor Jay Williams said the facility did provide some major pluses for the city.

"It helped people rediscover downtown and it stimulated the growth of downtown," he said.

The center also helped the financial bottom line of a number of downtown restaurants and bars, the mayor added.

Since it opened in late October 2005, the center has faced many challenges — some expected and others that came as surprises. "It was an eventful year," Williams said.

The expectation that the center would generate a seven-figure financial profit was overstated.

Global Entertainment Corp., the company managing the center, originally estimated a $1.15 million profit during its first year. That figure was drastically reduced in January to $652,264 for the center's first 12 months of operations — October 2005 to this past September.

After a delay of about two months, Global closed the fiscal books on the center last week. The center reported a loss of $23,653 for its first 12 months.

Disputed payment

But that figure doesn't include $140,850 Global says was mistakenly given to Blue Line LLC, the parent company of the Youngstown SteelHounds minor league hockey team, for the sale of club seats. The team plays its home games at the center.

Global officials say that money was incorrectly given to Blue Line, and they sent an invoice to the company last week to get back the $140,850.

Herb Washington, Blue Line's president, said he is entitled to that money, and the only reason Global and the city are seeking it is because he is refusing to include a $1.50 parking fee and a $1.50 facility fee on his tickets.

Washington said that it's not his fault the center's revenue stream is weak and that to shrink its deficit by asking him for $140,850 is wrong.

Global and the city tried to renegotiate Blue Line's contract to include those fees on tickets, but Washington refused. It was the latest in a list of financial issues at the Chevrolet Centre.

In just the past few weeks, Matthew Hufnagel resigned as the center's general manager after Global discovered $700 missing in on-site parking receipts. Also, the city failed to get $2 million it expected to receive from the state's capital budget fund.

Learned from mistakes

Global and the city learned from this fiscal year, Williams said, and will be able to use those experiences to have a stronger second year. An arenafootball2 league team, Mahoning Valley Thunder, will play its eight home games in the center beginning in the spring.

"We had some tremendous challenges the first year, and I'm proud of the staff for meeting those challenges," said Thomas Sadler, president of Encore Facilities Management, Global's facility subsidiary.

Global estimates the center's profit for the 2006-07 fiscal year, that started in October, at $629,953.

The center had 87 events in its first fiscal year. The facility is aggressively booking events for the center, and should have twice as many events this fiscal year compared with the last one, he said.

"We're not just sitting back," Sadler said. "Promoters are taking notice of the center. There is no question that Youngstown and the surrounding area is a viable market."

Popular shows

One of those promoters is Feld Entertainment of Vienna, Va. The company promotes Disney Live!, Disney on Ice, and Ringling Bros. & Barnum & Bailey circus, and booked those acts at the center this past fiscal year.

"Our shows are very well received in the Youngstown area," said Donna Larkin, a Feld spokeswoman.

Attendance was strong at the Chevrolet Centre for those three acts, she said. The second tour of Disney on Ice at the center began Wednesday and ends today.

"People in the Youngstown area were traveling to Pittsburgh and Cleveland" to see these shows, Larkin said. With the Chevrolet Centre, Feld can "make that entertainment available to people in Youngstown."

Also, Dominic Baragona, owner and president of Mid America Events, said the shows he's promoted at the center have been successful.

Mid America promoted a home and garden show, monster truck shows, and helped coordinate a charity poker tournament at the center. Monster trucks return to the center Jan. 12-13, and Baragona expects another home and garden show in March.

"The shows went over well. My experience there has been pretty positive," Baragona said.

Renegotiated contract

The financial picture at the center was so poor at one point that the city insisted on renegotiating its contract with Global. An updated contract was finalized in July that calls for Global to guarantee $600,000 to the city beginning in the second fiscal year and agreeing to cover any financial deficit at the center starting with the first fiscal year.

Harry Meshel, a former Ohio Senate president and vocal critic of how the city oversees the center, said the new contract was a step in the right direction. But much more needs to be done to make the center a success, he added.

"There's been a concerted effort to make the arena look like a success despite the problems," Meshel said.

The center's operations aren't formally structured, leading to numerous financial problems there, he continued.

"We all want it to succeed," Meshel said. "... They finally woke up and started doing something, but there's so little oversight by the city."

Williams disagrees, however, saying city officials are closely monitoring what is happening at the center.

Ex-Youngstown Mayor George M. McKelvey, who was in office during the construction phase and the grand opening of the center, declined to comment on the facility.

skolnick@vindy.com

Sunday, December 17, 2006