Why Isnt DeVos Place Revenue Higher
The woodworkers' two-day convention held last December brought in $133,000 to the building during FY06. But the bi-annual show won't be here in FY07, and the loss of that revenue source largely accounts for the income disparity between the two fiscal years.
When SMG presented its first draft of the FY07 budget for
But SMG Director of Finance Chris Machuta told the Business Journal that the $159,000 variance between the two annual budgets would be reduced to less than $50,000 by the time the CAA meets later this month to adopt the spending plans for
Machuta said he expects that additional income from the consumer shows, which play in the center from January through March, is a prime candidate to close that discrepancy.
The biggest challenge Machuta faces in putting together the annual budget is that he does so without knowing exactly how much event organizers will spend on decorating, equipment rentals and concessions for their meetings, or if they will want to hold last-minute smaller gatherings in one of the center's many meeting rooms.
The latter increases event income, while the first group raises ancillary revenue. Both sources have played big roles in reducing this fiscal year's deficit from a $700,000 shortage that was projected last June, to $95,000 at the end of April.
"This is the most aggressive budget that we've put together for
MacKeigan said making accurate financial projections for the building is difficult, because
"There isn't a lot of downside," said Machuta of the draft budget.
He added that the biggest revenue-generating events were locked in for the year, and that the sales team was looking for smaller meetings to add to the schedule.
But CAA Chairman Steven Heacock wanted to know why the building's revenue wasn't higher in light of the positive booking reports the board has received from the Convention and Visitors Bureau.
"I'm surprised that we're not seeing growth," said Heacock.
Kent County Fiscal Services Director Robert White made a similar comment at the CAA Finance Committee meeting a week earlier. After looking at the draft budget, he said he didn't see any real growth in event income but he "thought it would grow."
Total event income to the building was projected to be $37,000 more, and adjusted gross income was forecast to be $76,000 higher in the coming year than in the current year. Those figures, though, have a good chance of being changed by the time the board sees the final budget in a few weeks.
Machuta said revenue has grown. But he also said that expenditures for maintenance, security, cleaning, and extermination services are expected to go up, and total expenses are projected to rise by $235,000 this year from last year.
"Steam continues to be a rising cost," he said.
Still, Heacock told SMG to file a report this month that compares the building's bookings to the convention center's revenue projections. MacKeigan said he would get that report to him well before the board's next meeting.