DeVos Place Fiscal Outlook Revised
Instead of showing a deficit of $1.57 million for FY05, which begins July 1, DeVos Place has been projected to have a shortfall of $1.38 million for the next fiscal year.
The first forecast for the building was put together in February. Since then, though, those revenue sources have produced more income than was first expected. The increase was noticed once DeVos Place made its way through its first quarter.
“It wasn’t until March or April that we began to see these positive variances,” said Rich MacKeigan, general manager for SMG, the firm responsible for the daily operations in the building.
“We’re very comfortable with the numbers you have now,” he told staff members of the Convention and Arena Authority Finance Committee last week.
SMG Finance Director Chris Machuta said the revenue increase for the building, which opened in December, also means that the FY04 deficit will be less than initially projected. Rather than losing $1.6 million for the current fiscal year, Machuta said that loss would be closer to $1.4 million — a swing of roughly $200,000.
Machuta also said that the electric bills to cool the building haven’t been that costly so far.
“Initially it doesn’t seem to be a cause for alarm,” he said.
As for Van Andel Arena, which SMG also operates and the CAA also owns, its estimate hasn’t changed. The arena is still expected to have a surplus of $1.51 million for FY05.
In May, the arena had net income of nearly $180,000 from just eight events, pushing the building toward an expected surplus of $1.44 million for FY04.
DeVos Place showed a loss of $196,423 for May.