Color DeVos Place Black

March 18, 2005
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GRAND RAPIDS — Consumer shows pushed

DeVos Place
into the black for February, the second consecutive February that the convention center has had a surplus.

The building had a surplus of $30,174 for the month on total income of $479,455 from 53 events over the 28 days. In February 2004, the building's surplus was $164,838. The difference was that the Michigan International Auto Show was held in January this year. Last year most of that annual event fell in February. The Golf Show, produced by Showspan Inc., put the building into the black for the month.

Although the net from each event was lower than projected, ancillary income has been higher than what was forecast. Most of that increase has come from higher decorating and audio-visual rental receipts.

The new Steelcase Ballroom was open for its first full month in February and the room hosted 10 events, three more than projected.

"We need more of those events," said Chris Machuta, SMG director of finance.

"We're on a learning curve as to what kind of events we'll have there," added Rich MacKeigan, SMG general manager. "The users of the building are very pleased with the ballroom."

So far,

DeVos Place
has had five profitable months since it opened in December 2003.

Van Andel Arena turned a tidy surplus in February. The building netted $238,345 from 18 events held there last month. Total income for the month was $522,946.

Although the arena is likely to meet its goal of 23 concerts for the fiscal year, the average take from each event is dropping, because some shows draw ticket buyers that don't spend much on concessions. Lower concession sales result in less ancillary income for the building. For one well-attended concert last month, the average food and beverage sale was 98 cents per person.

MacKeigan said the same situation is occurring at other SMG-run venues in the Midwest

Machuta said the arena needs one more concert and the Griffins to make the playoffs for the building to reach its fiscal-year projection of a $1.51 million surplus.

The two Kenny Chesney concerts set for the arena next week sold out in 45 minutes and sold $1.1 million worth of tickets during that time period, meaning each minute was worth $24,444 in ticket sales.

The Convention and Arena Authority Finance Committee learned last week that revenue from the 700 spaces in

DeVos Place
's parking ramp would be $200,000 less than projected. Instead of the $389,000 forecasted for the fiscal year, the final take is likely to be closer to $189,000. Only 111 monthly parking spaces have been leased, but event-parking receipts are on the upswing.

CAA representative Dale Sommers said the

DeVos Place
construction accounts would be closed by June 30 and the board should get $1.5 million back from the funds. Four people are left working on the site but are likely to be gone by the end of next month.

"We have to finish up some irrigation and some plantings. We have to paint the loading dock garage doors," said Sommers, who added the Ford Field project in Detroit still hasn't closed. "It's winding down very well and the books should be closed by April 30th."

Eight months through the fiscal year

DeVos Place
is $736,236 in the red and is on track to lose $1.27 million for the year. Van Andel Arena is $663,318 in the black and is expected to have a surplus of $1.32 million for the year. The arena surplus will cover the convention center deficit.          

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