CAA Now Exceeding Expections
GRAND RAPIDS — Becoming complacent was the biggest concern he voiced last week in his annual evaluation of the Convention and Arena Authority, as board Chairman Steven Heacock said the CAA has exceeded all expectations.
Heacock said a $3 million reserve account was created when the CAA took control of Van Andel Arena from the Downtown Development Authority. The account was to serve as a “rainy day” fund in case the board couldn’t make ends meet with a brand new convention center about to come on line.
But he noted that the CAA has never had to tap into the reserve, even with the losses DeVos Place has incurred, and he said the fund tops $20 million today.
“I think it’s fair to say this has been a great success,” said Heacock. “We’re in pretty good financial shape, particularly for a government in Michigan.”
The reserve account grew because the arena has posted more than a $1 million surplus every year, the convention center construction project came in at $12 million below budget, and parking revenue from the DeVos Place ramp and a lot near the arena has been higher than what was expected.
Heacock pointed out that the size of the board’s reserve means the CAA doesn’t have to rely on the city or the county for a financial bailout. But despite being in such healthy fiscal shape, Heacock felt now was a good time to think about changing the status quo.
“Maybe we can look at things a little differently,” he said.
To get that idea rolling, Heacock said he was asking board member Gary McInerney to serve with him on a sub-committee that will look into ways to snuff out complacency before it can get a grip on the board. One thing they will examine is the CAA’s current structure, which has two committees that track finances and operations at the arena and DeVos Place. Another idea they’re expected to toss around is whether to increase the board’s membership past the current seven seats.
As for upcoming projects, the biggest one the CAA has on its list is to get a new outdoor music amphitheater built on a northeast section of Kent County’s Millennium Park. Heacock hopes to keep the cost of the project around $30 million, and he said Grand Action and Kent County have agreed to help find funding for the construction work.
“Grand Action has embraced this project,” said Heacock of the committee that also helped to fund the arena and DeVos Place.
Kent County is practically donating the park’s property for the amphitheater, which will seat about 14,000. County Chairman Roger Morgan told the Business Journal that Kent will enter into a long-term lease with the CAA for the site and will only charge the board about $1 a year for the property.
Morgan said having the music venue in the park is a good fit, and would enhance the offerings the park currently has and ultimately will have once the 1,500 acres are fully developed.
“The county has been a wonderful partner in this project. It’s really a CAA and county project,” said Heacock.
Mayor George Heartwell, also on the CAA, said raising funds for the venue might go more smoothly if the board commits to how much it is willing to spend on construction before Grand Action starts its private-sector fundraising drive.
Much of the reserve account, though, has been targeted by the CAA to make capital improvements in the coming years to the arena, which is almost 12 years old, and the convention center.
So Heacock said he would return to the board with details on how the amphitheater will get built, a plan that will likely include a close estimate of how much it will cost.
“If the board doesn’t feel that this is something we should go forward with, then we’ll stop,” he said after members hear the plan. “But people seem to be enthused about this project.”