Concerts top arena revenue
Unaudited figures show DeVos Place lost $662,209 for the fiscal year that ended June 30, while Van Andel Arena recorded a surplus of $1.33 million. Both results were better than the fiscal-year forecast.
The convention center was projected to lose nearly $840,000 for the year; the preliminary loss figure is $177,000 lower. The arena’s surplus was forecast at $1.16 million; the unaudited number is almost $175,000 above that figure.
The year’s surplus from both buildings totals about $675,000.
SMG Regional General Manager Rich MacKeigan said he was “very pleased” with the way the arena performed during the fourth quarter, when three concerts — including one by Elton John — pushed the building’s event income over the top. MacKeigan pointed out that concert revenue accounted for 55 percent of the arena’s total event income of $3.5 million — and from only 18 concerts, five fewer than what was projected.
“I don’t anticipate the importance of concert revenue diminishing as we move forward,” he said. “We’re going to have a tough time making budget (for next year) with the way things are. But that’s the same thing I said six months ago about this year.”
MacKeigan, also executive director of the Convention and Arena Authority, said fewer artists are touring, and those that are touring aren’t playing venues in mid-sized markets like Grand Rapids.
CAA Chairman Steven Heacock said it might be time to step up efforts to retain artists that have played here and find new ones to come to the arena. He suggested that a task force be put together to look into that. “I know that you are aggressive (in booking shows),” he said to MacKeigan, “but maybe we should take more risks.”
MacKeigan felt members of the CAA Finance Committee could make up the task force. “We need to be cautious of the fact that the last deal you cut is the next deal you cut,” he said of offering incentives to concert promoters.
As for DeVos Place, MacKeigan said revenue to the building was fairly consistent with previous years. He said event income was strong, but ancillary revenue was off because fewer delegates attended the same number of meetings that were held in past years.
BDO USA will audit the financial statements for both buildings. The figures will be converted from a cash basis to an accrual basis for the audited report.
SMG Assistant General Manager Jim Watt said work on expanding the arena’s northwest concourse is well under way. The project, being directed by Rockford Construction Co., has a “substantial completion date” of Oct. 1, a week before the Grand Rapids Griffins open the home portion of its schedule.
The work, including the soft costs, has been estimated at costing $1 million. The expansion is expected to lead to more concession revenue for the building. “This is a hurry up and get it done project,” he said.
Watt also said the arena’s new ribbon board, which will go across the façade that separates the lower and upper bowls, should be installed by Sept. 26. The installation will require the arena to be shut down for two weeks. The board costs $1 million and is expected to increase the building’s ad revenue.
Watt said DeVos Place is getting a new sound system; the existing one is outdated and is no longer being supported by its vendor. He said the new system comes from a vendor that supplies traditional convention center systems and that it will cost about $1.5 million. “We can’t go much past September to do this,” he said.
SMG Assistant Manager of DeVos Place Eddie Tadlock said the convention center will showcase pieces from 53 artists during ArtPrize, which begins Sept. 22. Tadlock said DeVos Place will also host a new event called Art Fair, in which artists registered with ArtPrize will sell their works to the general public. Art Fair is schedule to run Sept. 24-26.