Now The Hard Part For DeVos Place
GRAND RAPIDS — When the Convention and Arena Authority meets later this month there will be a new board member, as Mayor George Heartwell will move into the seat held for four years by former three-term mayor John Logie.
The board will also put the finishing touches on the construction of
But once the pleasantries are over, members will take a hard look at two issues that are clouding the financial future they’re facing.
The first is to balance the operating budget of
November brought the board a bit of encouraging financial news, as
“You really won’t see business picking up until 2006, 2007, 2008,” said Robert White, Kent County Fiscal Services director, CAA staff member, and part of the board’s Finance Committee.
White said that as long as the arena can host 22 to 24 concerts each fiscal year, revenue from that building should cover operational losses at
The Convention and Visitors Bureau said that 109 conventions were held in the county last year and that 136 were booked for
Just 10 highlighted conventions in 2005 offer the city an economic boost of $4.8 million, with an August meeting of the Ancient Accepted Scottish Rite worth $1.3 million by itself.
“Yet, we’re operating in a buyer’s market with many cities competing for the same business,” he cautioned. “To be successful, we must increase marketing and effectively deploy our staff.”
If history does repeat itself,
In between those two, Showspan will present the Boat Show, the Golf Show and the Home and Garden Show. Other producers will bring in RVs, classic and souped-up cars, and wedding planners to the building during the busy winter months.
As for the capital replacement account, board members will learn at their next meeting that their projected $3.2 million operating reserve could grow to $8.1 million by the end of the fiscal year, if projections hold true and if members approve a fund transfer.
But they will also learn that in five years that account will have to reach nearly $16.2 million, at least that is the projected balance the fund needs by the end of FY10. Their mission is to grow that reserve account. It will be a tough assignment to fulfill if
The arena is projected to have a $1.51 million surplus for FY05 and in November, five months into the fiscal year, the building was $377,000 to the good. But that figure was nearly $248,000 short of the five-month forecast. Net income to the arena in November was only $13,372, or $135,000 below the month’s forecast.
In his monthly report, SMG Director of Finance Chris Machuta said event income was lower than expected in November because the building held only one concert for the month, instead of the three that were anticipated.