New Ballroom on the Block

July 1, 2007
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GRAND RAPIDS — When Alticor opens the new JW Marriott in September, Convention and Arena Authority Executive Director Rich MacKeigan thinks the hotel’s ballroom will take some business away from the Steelcase Ballroom in DeVos Place.

But MacKeigan added that much of the business the convention center’s ballroom gets comes from groups that meet in DeVos Place, and he believes most will want to stay in the building for the smaller events they hold there rather than move a few blocks south.

Plus, he said, the center’s ballroom is bigger than the Marriott’s. So larger meetings, such as the annual get-together held last month by the Economic Club of Grand Rapids that drew 2,100 to hear former President Bill Clinton, will continue to book the ballroom.

“We’ll see. We do have confidence in the numbers that we have,” said MacKeigan, who is the SMG general manager who oversees daily operations at DeVos Place and Van Andel Arena for the CAA.

The latest number coming from SMG has the ballroom producing more than $400,000 of event income during the new fiscal year, which began Sunday — about $120,000 above the FY07 figure.

Overall, DeVos Place is expected to have $4.8 million in adjusted gross income this fiscal year, up from $4.68 million last year. But expenses are likely to be $5.35 million this year and leave the center with a loss of $523,000. SMG Director of Finance Chris Machuta said that shortfall is $90,000 less than the deficit expected for FY07 and the lowest since the building opened.

Another surplus has been projected for the arena, which would be the building’s 12th consecutive year in the black. Adjusted gross income is expected to be $5.1 million this year, while expenses should total $3.8 million, giving the arena a $1.3 million surplus in FY08.

The arena is on track to end FY07 with a surplus of $1.6 million, one of the building’s better fiscal years despite hosting fewer concerts than projected. Nineteen were held this past fiscal year, three fewer than the usual number. But Machuta said attendance at each show was up, averaging almost 10,000 for every concert. MacKeigan said the series of 10th anniversary shows last fall drew more attention to the building and helped boost the bottom line.

The unaudited FY07 year-end numbers for both buildings will be released next month.

Part of this year’s expenditures is a $50,000 increase in advertising. MacKeigan said SMG is talking with The Rapid about buying two bus wraps, one for each building, to promote events at the arena and DeVos Performance Hall. Each wrap costs $25,000. The bus wraps would provide each building with a rolling billboard to advertise upcoming shows.

“So far, the promoters we’ve spoken with have said it’s worthwhile,” said MacKeigan.

The first CAA-promoted show that wasn’t a charity event, “Thomas the Tank Engine,” did better than expected. Machuta said the two DeVos Performance Hall shows, both held on a Wednesday, sold more than 3,400 tickets, and the plan is to bring the children’s show back.

“We will be in the black. We’ll probably make more money than we thought,” said Machuta.

CAA members adopted the FY08 operating budgets for both buildings last week, along with the board’s budget. Net revenue to the CAA should top expenses by $930,000. The board is expected to end FY07 with a loss of $775,000.

The difference between the two years is money set aside for capital improvements. The board spent about $2.7 million on upgrades in FY07. But for FY08, that figure is expected to drop to $690,000.

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