DeVos Place is on turnaround trail
Arena also scores well in first half of fiscal year.
The city’s convention center, which has never had a profitable year since it held its first convention in December 2003, ended the year’s halfway mark with a surplus of $11,433.
Granted it’s a small surplus, but the figure marked nearly a $438,000 turnaround from the previous December when the building was $426,500 in the red.
DeVos Place closed December with a surplus of $79,287, as total income topped $478,000 from 39 events. The month’s profit was almost 12 times the $6,700 surplus the center had a year earlier, even with seven fewer events than it hosted in December 2011.
SMG Director of Finance Chris Machuta credited the financial success to strong performances by holiday shows and large-scale holiday parties, which also boosted sales for the building’s catering service as ancillary income reached $185,000 for the month. At the same time, expenses came in lower than expected by roughly $50,000.
“The first half of the fiscal year has proven to be a very successful one for DeVos Place with consistent activity throughout. The balance of the fiscal year looks to be very good, (but) giving back some of the gains achieved during the first half,” said Machuta.
Machuta also said the first quarter of the calendar year, from January through March, holds fiscal promise as the building features a flurry of consumer shows throughout that period, like last week’s Michigan International Auto Show and the West Michigan Golf Show this weekend.
Both of those events, along with others held in the building, are produced by Showspan Inc.
DeVos Place wasn’t alone in having a financially solid first half. Van Andel Arena also hit the mark on an upbeat note. The arena closed the first half with a surplus of $488,725, or $130,000 above the same six-month period last year.
Net income in December was just short of $310,000. A year earlier it was $188,000. Machuta said event income was strong because the two Trans-Siberian Orchestra Christmas shows performed better than the previous year. Event income topped $218,000 for the month on just 13 shows.
“The first half of the fiscal year was a successful one for the arena as concert activity and sales appear to be heading back in the right direction overall,” said Machuta. “The strong second quarter of the fiscal year, along with an anticipated strong third quarter, should help the arena finish the year in excess of $150,000 ahead of budget.”
In June, SMG projected the arena would finish the fiscal year with a $1 million surplus, while DeVos place would lose $600,000 for the year that ends June 30. Both buildings are operated by the Convention and Arena Authority.
The stellar first-half showings mean revenue to the CAA is up by 1.6 percent, to $4.1 million, for the year thus far. But at the same time, operating expenditures rose by 5.3 percent to nearly $3.4 million. So the CAA is left with a deficit of $1.2 million halfway through the year.