CAA operating take is down after six months

March 14, 2010
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For the first half of the current fiscal year, the Convention and Arena Authority had an operating loss that was 37 percent higher than for the same timeframe a year earlier.

The CAA lost $574,030 from July through December 2009. Over the same six months in 2008, that operational loss was $418,312. What accounted for the higher loss was operating revenue was down by 9.9 percent in 2009 from 2008, while utility costs were up by 7.8 percent and spending for supplies and other expenses was up by 13.3 percent.

The net income figures from Van Andel Arena and DeVos Place through January, though, take a bit of the edge off that six-month operational loss for the CAA.

Through seven months, the arena had a net-income surplus of just under $706,000, while the deficit for the convention center was about $577,000, making the CAA’s net income from operations at both buildings for those months $129,000; in 2008, that figure was $67,566.

The arena had a strong showing in January, when net income fell just short of $300,000.

“Things are selling well. It’s just that we don’t have enough things to sell,” said Chris Machuta, SMG director of finance.

DeVos Place even recorded an unusual surplus, albeit a small one at $29,821 — largely due to a good start to the consumer-show season in January. SMG Regional General Manager Rich MacKeigan said attendance at those shows continued to be “very good” during February, and sales activity at the events has also been good. “We’re hoping it’s a good sign for the economy,” he said.

But the CAA’s non-operating revenue for the first six months likely won’t get better over the year’s second half, regardless of how well the buildings perform. That figure, about $265,000, was down by 55 percent at the end of December from the previous year. Almost all that revenue comes via investment income from fixed-rate securities. The Federal Reserve, which is holding down interest rates to spark lending, isn’t expected to raise those rates until fall, at the earliest, and the board’s fiscal year ends June 30.

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