All The Makings Of Perfect Storm
GRAND RAPIDS — The first peek at the upcoming fiscal year forecasts for Van Andel Arena and DeVos Place predict another surplus of more than $1 million for the arena and a record- setting revenue mark for the convention center.
SMG Director of Finance Chris Machuta told the Convention and Arena Authority’s Finance Committee recently that adjusted gross income to DeVos Place should reach $5.23 million during the next fiscal year, up by $460,000 from the $4.77 million expected this year.
Machuta said a main reason driving the revenue increase is the building will be holding larger events, which raises event and ancillary income levels. But while revenue should rise, expenses are also expected to increase to $5.61 million, or $260,000 higher than this year’s expenditures.
Machuta said the building’s bottom line shows a loss of $378,977 for 2009, but nearly $200,000 less than DeVos Place is expected to drop this year. The projected shortfall for next year would be the building’s smallest since it opened in December 2003.
“We’re comfortable with the numbers. We could see an uptick. We could see a downtick, but I don’t think that will happen,” said Rich MacKeigan, SMG regional general manager.
Committee member Robert Herr asked what impact the state’s economy might have on bookings. MacKeigan said it could negatively affect turnout for the shows held in DeVos Performance Hall and the consumer events in the center’s exhibit space. But he felt the meetings booked by state groups might be impacted the most by the lackluster economic conditions, rather than the national and regional business the building is getting.
“We continue to be extremely well positioned regionally and nationally when it comes to value,” said MacKeigan.
MacKeigan said sales for DeVos Place can be increased if the sales team is expanded. The SMG sales staff only totals three, including Assistant General Manager Eddie Tadlock, and MacKeigan said a few more personnel need to be added to generate more business.
“This fiscal year appears to be a perfect storm in a very positive way,” said MacKeigan of the center’s outlook for the coming year. “I don’t know if we’re going to see this transform from a revenue standpoint, but we’re going to try to make that happen.”
The forecast has the arena earning a surplus of $1.41 million for the upcoming year, about the same figure the building is expected to reach at the end of this year. If the arena does top $1 million next year, it will be the 13th consecutive year Van Andel has surpassed that figure.
The fiscal year for both buildings begins on July 1. The budgets for both will get another review by the Finance Committee next month before the forecasts go to the full CAA at the end of June.