CAA rebounds from down fiscal year


After a down year in 2014, the Kent County Convention and Arena Authority should be back on track for 2015.

Despite the lackluster numbers in 2014 — including a $1.6 million operating deficit — the CAA made a presentation at Thursday’s Kent County Commission meeting describing the positive impact the organization’s venues have had on the city in its 15 years.

The CAA expects a surplus when the final 2015 reports are audited and released.

The presentation was an annual report given by the governing body, which was created in 2000 to encourage economic development by owning and operating convention, entertainment and sports facilities.

The authority oversees Van Andel Arena, DeVos Place and DeVos Performance Hall, which are managed by nationwide entertainment company SMG, locally led by Rich MacKeigan.

“There was a time when Flint and Grand Rapids looked similar,” CAA Chairman Steve Heacock told the county commission Thursday. “We went in different directions, and this is a driving force as to why.”

Along with the presentation, an audited copy of the fiscal year 2014 annual report was provided to the Business Journal. The report was audited by BDO.

The CAA had operating revenues of $11,780,265 and operating expenses of $13,463,279 for an operating deficit of $1,683,014, for the fiscal year ending June 30, 2014.

In 2013, the CAA showed a profit of $537,625.

Revenues were lower in 2014 due to a decrease in events. The audit cites the timing of events as a reason revenues were lower.

MacKeigan told the Business Journal in July that event bookings often are reliant on schedules of entertainers, and sometimes there just aren’t any acts touring at a given time. The same goes for convention timing and open weekends at DeVos Place.

High winter utility costs because of harsh weather and aggressive facility improvement projects were cited as the reason for high expenses.

A strong first half from July-December 2014 helped boost the initial reports of fiscal year 2015, which shows operating revenue of $896,374.

The CAA and the county’s investment into the venues is a large reason Grand Rapids is competitive with markets such as Cincinnati, Columbus, Louisville, Kansas City, Memphis and Pittsburgh, said Richard Winn, the CAA’s secretary and treasurer.

Winn said Grand Rapids attracts similar-sized entertainment and conventions as those markets and often shows better hotel occupancy rates.

Local hotel occupancy has increased from 48 percent to about 69 percent in the last decade, and now rests above the national average of 67 percent.

Much of that increase has come from an increase in leisure travelers, said Doug Small, president and CEO of Experience Grand Rapids. Small said more efforts will be made to attract leisure travelers in the future.

The hotel occupancy rates are representative of the efforts put forth by the CAA, Experience Grand Rapids and the area’s hotels, said Winn, who also is president of Amway Hotel Corp.

“We’re now reaping the benefits of the investments and our efforts,” said Winn, a county appointee.

The CAA has two county appointments, two city of Grand Rapids appointments, one appointment from the governor of Michigan and two members appointed by the five other appointees.

During the presentation to the county, 2011 economic impact numbers showed the CAA venues contributed $58.4 million to the area, including 700 jobs and $16.6 million in new earnings.

DeVos Place generated $26.1 million in output, $6.8 million in earnings and 314 jobs. Van Andel Arena showed a $22.2 million output, $6 million in earnings and 252 jobs.

The arena brings in more than 600,000 people annually for concerts and for sporting events such as the Grand Rapids Griffins, now in its 20th season.

“We fight well above our weight class,” MacKeigan said of the arena.

He also said the Griffins have established a great relationship with the Detroit Red Wings, and now a Red Wings game on national television has at least three mentions of Grand Rapids.

DeVos Performance Hall listed $9.9 million in output, $2.6 million in earnings and 132 jobs.

The performance hall hosts four arts organizations — Grand Rapids Symphony, Opera Grand Rapids, Grand Rapids Ballet and Broadway Grand Rapids — an oddity for a city of Grand Rapids’ size, MacKeigan said.

“It is unprecedented,” he said. “Communities are losing their arts.”

Commissioner Jim Talen lauded the CAA’s commitment to downtown inclusion, which he said is noticeable when attending the diverse array of concerts and arts events such as ArtPrize. DeVos Place hosted more than 120 pieces during ArtPrize, featuring artists from diverse backgrounds.

“Why would we exclude part of our market?” MacKeigan responded. “We’ve made a concerted effort.”

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