- change ups
Arena Enjoys Strong Surplus
GRAND RAPIDS — Although the figures are preliminary and unaudited, the numbers show a good fiscal year for the Grand Center and a prosperous one for Van Andel Arena.
Even though the Grand Center lost money for the year, the city's meeting place lost a lot less over those dozen months than what was predicted at the start of the year. Net income for the Grand Center was $153,000 higher than anticipated.
The building, which will be known this fiscal year as DeVos Place, had an unofficial loss of $213,000 after $4,500 worth of capital expenditures — $170,000 of that red ink flowed in June alone. The Grand Center was expected to lose $366,000 for the fiscal year, according to the forecast issued by SMG in July 2002.
SMG Director of Finance Chris Machuta said much of the increase was due to a better than expected turnout at the consumer shows produced by Showspan Inc. and to a lengthy airport security training session that took place last summer. The training session wasn't on the building's initial schedule, but it contributed $115,000 in unexpected revenue. Machuta also said that the building fell short of holding as many conventions as was expected.
Overall, the Grand Center held 354 events, 51 more than projected, and drew 477,975 through its doors in FY03. The building hosted 384 events with 490,444 attending in the previous fiscal year when the Grand Center lost $60,000.
As for the arena, net revenue exceeded expenses by $1.61 million. After allocating capital replacement costs of $211,872, net revenue stood at $1.4 million for the fiscal year. That figure is more than $530,000 above the forecast SMG made going into the fiscal year.
The arena held 150 events during the year and drew 774,789 paying customers, 24 more events and 2,739 more arena-goers than the previous fiscal year. Net income for the arena was slightly higher the previous year, by about $45,000. But more money went into capital replacement last summer, so the final net income figure in FY02 was lower at $1.25 million.
Total arena income before expenses reached $4.93 million this year, while total event income topped $2 million. Fifty-eight percent of that event revenue, or $1.16 million, came from the 23 concerts held at the arena, which were only 15 percent of all events held there. Each concert was worth an average of $50,000 to the building.
"The economic force of the arena is concerts," said Machuta.
The fiscal year for both buildings ended on June 30 and the audited figures should be ready sometime next week. SMG earned $674,000 in base pay and incentives for operating both buildings the past fiscal year.
The arena began its eighth fiscal year last month with a single event, the second farewell concert from Cher. The sold-out show was worth $64,668 in event income and $31,752 in ancillary income. After expenses, revenue for the arena from the show was nearly $28,000.
Three events took place at DeVos Place in July and expenses exceeded revenue for the month by $146,500. New exhibit space in the building opens on Dec. 3 and the convention center has been projected to lose $1.78 million by next June 30.