DeVos Place Loss Less

June 27, 2005
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GRAND RAPIDS — With the fiscal year ending this week, it looks like DeVos Place will lose $1.09 million and Van Andel Arena will close the year with a surplus of $1.43 million.

At least that is where both buildings stand financially after 11 months of the current fiscal year. In May,

DeVos Place
lost $156,388. But revenue to the arena topped expenses by $65,485 for the month.

The good news is the fiscal-year red ink spilling from

DeVos Place
is about $300,000 less than what was expected at the start of the year. For the arena, the building’s surplus is within $80,000 of the $1.51 million projection made a year ago by SMG.

The Convention and Arena Authority approved the FY06 budgets for the convention center and the arena last week.

DeVos Place
has been projected to lose $1.15 million next year, while the arena should post a surplus of $1.46 million. The new fiscal year begins Friday.

On the revenue side, both buildings are expecting more event income for the upcoming fiscal year. The forecast has that revenue source rising by over $50,000 at

DeVos Place
and by just under $30,000 at the arena. But some source changes may be in the works for both buildings during the coming year, as far as event income is concerned.

The

DeVos Place
projection contains $130,000 less in event income coming from the consumer, or public, shows and $176,000 more coming from conventions.

Convention and Visitors Bureau President Steve Wilson said revenue to the county’s lodging excise tax has risen for each of the first four months of this year over last year’s figures, a sign that more visitors are coming here.

Amway Grand Plaza Hotel President Joseph Tomaselli added that occupancy at the downtown Courtyard by Marriott and the GrandPlaza were up by 3 percent and 4 percent, respectively, in May over last year.

The arena forecast has an increase of $115,000 in event income coming from family shows, such as the skating tours, and roughly $100,000 less from sporting events. Not having a college hockey tournament in the building next March will account for much of that reduced income to the arena from sports.

As for expenses, operational costs for

DeVos Place
have been projected to rise by $336,000 to $4.83 million, but should stay stable for the arena at $3.37 million.

SMG Director of Finance Chris Machuta said the new fiscal year should be the last year the convention center has an increase in projected expenses, with new staff members aboard and maintenance costs rising as warranties expire.

SMG General Manager Rich MacKeigan said this summer should be the most active the buildings have had in years. DeVos Performance Hall will be open for the first summer in three years and arena bookings are up for July and August over the past few years.

Most notably, Bruce Springsteen will play the arena on Aug. 3 — but only to 8,500 paying customers, which is about 3,500 less than the building’s concert capacity.

Green Day drew the arena’s second-largest concert crowd in May, as part of its American Idiot tour, and fell just short of selling 13,000 tickets. The band, however, did sell $135,000 worth of merchandise at the show — the most of any artist that has played the building.

CAA members also approved a new wheelchair policy for

DeVos Place
. Todd Johnson of SMG said the convention center has four chairs available and would lease more to meet any demand above that number. Johnson also said SMG was looking into whether motorized chairs should be added to the inventory.

“It’s really a nice service to offer and in my experience people really appreciate it,” said Lew Chamberlin, CAA board member.

CVB Vice President of Sales George Helmstead said 159 conventions and tradeshows have been booked at

DeVos Place
from now through 2010. He said those events are worth 205,000 room nights for area hotels and $57.9 million as an estimated economic boost for the area.

The final bill for the construction of

DeVos Place
, outside of the bond payments, will be paid on July 8. The $212 million convention center was completed ahead of schedule and the project came in under budget.

“We’re done,” said Dale Sommers, who represented the CAA on the four-year project. “It was a good ride.”     

    

Arena, Convention Center Event Revenue

DeVos Place
Revenue Source
    # of Events in FY06   FY06 Event Income   FY05 Event Income   Change From  FY05-FY06
Conventions/
Tradeshows
121 $1,312,636 $1,136,559 $176,079
Public Shows 40 $779,271 $911,452 ($132,161)
Other Events 98 $432,410 $425,939 $6,471
Total 259 $2,524,319 $2,473,950 $50,369
Van Andel Arena # of Events in FY06 FY06 Event Income FY05 Event Income Change From FY05-FY06
Concerts 22 $1,423,306 $1,442,852 ($19,546)
Family Shows 38 $617,259 $502,248 $115,011
Sporting Events 57 $560,115 $662,494 ($102,379)
Other Events $74,207 $37,315 $36,892
Totoal 123 $2,674,887 $2,644,909 $29,976

Source: SMG FY06 Operating Budgets, June 2005.

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