CAA May Double Improvement Budget

May 23, 2008
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GRAND RAPIDS — The Convention and Arena Authority may spend $1.54 million on capital improvement items for Van Andel Arena and DeVos Place over the upcoming fiscal year, nearly double the $880,000 the board allocated for building upgrades this year.

The potential CIP spending is evenly split between the buildings. The arena’s to-do list has five items for a total projected cost of $763,000. The comparable list for DeVos Place has seven items for a total of $775,000.

The biggest item on the arena’s list is a 2,000-square-foot expansion of the concourse in the northwest corner, an area that easily becomes congested when attendance reaches 8,000 and becomes nearly impassable when an event draws 10,000. The estimated cost to expand that corner is $450,000, and work would likely have to been done this summer when activity in the building is at its slowest.

The next biggest arena item is adding a curtain system to the upper bowl, which would cost about $225,000. SMG Regional General Manager Rich MacKeigan said a curtain would make the venue look smaller for events that don’t sell out, such as concerts that are set up to only draw from 6,000 to 8,000 ticket buyers, and create a more appropriate atmosphere for those shows.

“It makes the building a little more flexible,” said Birgit Klohs, CAA board member and chairwoman of the Finance Committee.

Adding a fire curtain to DeVos Place Performance Hall tops the convention center’s list at $250,000. Right behind that expenditure is $240,000 to add a snowmelt system from the performance hall’s entrance south to Lyon Street. Another option is to add the system south from the hall’s entrance to the end of the building for $170,000.

If the CAA includes all 12 items for the full $1.54 million, those expenditures will help drop the board’s projected net income for next year to $76,562 — a freefall of almost $900,000 from the net-income figure the CAA expects to get this year.

Kent County Fiscal Services Director Robert White, also a CAA staff member, said a new expense the board is expected to take on in the coming year will also contribute to the loss of net income. The CAA’s budget has $120,000 set aside to make landscaping improvements around the convention center: along Monroe Avenue, on the bank of the Grand River and down Lyon Street.

White said the board’s investment interest is likely to drop this year, possibly by as much as $225,000 to $742,000. But, overall, White said 2009 should be a good year.

The capital improvements list will be reviewed by the CAA’s Operations Committee next month before it goes to the full board for approval June 25. The CAA will adopt its new fiscal year budget on that date, too. The 2009 year begins July 1.

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