Arena Had Another Good Year
GRAND RAPIDS — Even though the figures are unaudited and unpublished, the year-end preliminary numbers make the most recently finished fiscal year for Van Andel Arena another financial success.
In fact, once the financial statements are audited next month, FY08 could turn out to be one of the best operating years in the building’s 12-year history — despite the bad economy and the arena not recording income of any sort in August because the building didn’t host an event that month.
SMG Director of Finance Chris Machuta told the Business Journal that the arena posted a preliminary surplus of $1.657 million for the year.
“It’s certainly not our worst fiscal year,” said Machuta.
If that figure survives the auditing process, it could qualify FY08 as the arena’s third-best year, only trailing the previous year’s surplus of $1.73 million and the all-time record margin of $2.28 million set nine years ago in FY99.
The budget forecast issued last summer for the arena projected a surplus of $1.37 million, while Machuta predicted a margin of $1.59 million as the year unfolded.
“We had a good, healthy concert business, especially during May. We had the two Kenny Chesney’s and the Tom Petty. Not only were they successful in selling (tickets), but the food and beverage was more than what we were expecting. So it was a good close to the year,” he said.
While August was a blank slate for the arena, May ended up being the arena’s fifth-best fiscal month ever with net income topping $483,000 from just 11 events that drew more than 75,600 paying customers through the turnstiles. The Petty show sold out and the two Chesney concerts came close to selling out. Other strong-selling shows in May were concerts by the Police and Bill Gaither, a wrestling event and Backyardigans performances.
The Grand Rapids Griffins and Rampage, the arena’s professional sports tenants, both had attendance increases for the year that contributed to the building’s margin.
“I hate to sound like a broken record, but it’s concerts,” said Machuta of the key to a successful fiscal year for the arena.
The preliminary number for DeVos Place has the convention center losing $518,655 for the fiscal year. That figure is up from the $467,534 operational loss the building had last year, which was the smallest loss for DeVos Place since it opened in 2005.
“It ended up being very consistent with what the budget was at $522,000. We ended up a little bit ahead of what my forecast was,” said Machuta.
The current fiscal-year budget for the convention center forecasts an operational shortfall of $378,977. The year ends on June 30.
The FY09 budget for the arena, which took effect on July 1, has an operational surplus of $1.41 million, a margin slightly higher than the FY08 budget had at the same time last year.
So can the two-year track record of exceeding projections turn into a three-year trend?
“We will see what’s going to happen this fiscal year with the price of gas, and try to hold that trend. Concerts still seem to be selling fairly well. We’ll see,” said Machuta. “We don’t really have much going on right now, but that could change over the next three months.”