DeVos Place Is Less Red

February 27, 2004
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GRAND RAPIDS — DeVos Place, the city’s new convention center, didn’t spill as much red ink in January as was expected.

The building, in its second full month of operation, lost $163,254 last month, or roughly $50,000 less than was projected.

SMG Director of Finance Chris Machuta reported that event and ancillary income were higher than anticipated. But indirect expenses were also higher than expected, mainly due to utility charges.

The total utility expense for the month was a little over $208,000, while SMG estimated that charge would be closer to $185,000. Last January, the utility bill for the Grand Center was $66,207.

“We are trying to keep utilities in check as much as we can. It is a major expense and we knew that it would be,” said Rich MacKeigan, SMG general manager.

MacKeigan explained that it was difficult to forecast what the utility bill would be, as it’s nearly impossible to make a comparison to other convention centers because climates and buildings differ. Convention and Arena Authority board member David Frey suggested that it might be a good idea if SMG tried to negotiate long-term, lower rates with the utilities.

Machuta said that revenue from the Michigan International Auto Show wasn’t included in the January report. Although the public portion of the show opened on Jan. 29, it closed on Feb. 1 and the revenue generated by the event will be part of the February figures.

Machuta said attendance for the auto show, held for the first time in DeVos Place, was up by about 25 percent from previous years, and food and beverage sales at the show were up by nearly 50 percent. He said attendance at this year’s golf show, also held in February, rose by 15 percent. Attendance for the boat show was up by 50 percent, while concession revenue doubled this year.

DeVos Place lost $80,000 in December, its first full month of operation. SMG, which manages the daily operations at the convention center, projects the building will lose $1.61 million for the fiscal year that ends on June 30.      

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