In a few weeks, the Convention and Arena Authority will adopt the new fiscal-year budgets for DeVos Place and Van Andel Arena. SMG Director of Finance Chris Machuta said the 2011 versions look a lot like the 2010 editions.
“(There is) nothing really out of the ordinary,” said Machuta.
The preliminary operating budgets for both buildings next year mirror this year’s spending plans.
The projection for DeVos Place next year has the building losing about $710,000, while the arena has been pegged for a surplus of $1.2 million. The convention center’s forecast for this year is a loss of $600,000, while the arena’s margin is $1.2 million. The new fiscal year begins July 1.
“We’re looking to hold constant,” said SMG Regional General Manager Rich MacKeigan of the preliminary numbers for both buildings.
“I think the event load will be pretty consistent, and I think the event income will be pretty consistent,” said MacKeigan of DeVos Place.
The operating budgets for both buildings leave the CAA with a net of $488,000 for 2011. In comparison, net revenue from operations to the board from the 2010 budget is expected to be $615,000.
The CAA also receives parking revenue from a lot near the arena and the ramp beneath DeVos Place. When that revenue source is allocated on an expense basis to the buildings, both bottom lines change. With its share of parking revenue, the arena’s surplus this year and next year rises to $1.3 million; the convention center registers a surplus of $57,000 in 2010 and $27,000 in 2011.
When CAA Chairman Steven Heacock asked MacKeigan how many convention centers actually turn a profit nationwide, he said “not many.” But parking revenue isn’t part of the operational budgets for the buildings, as it is officially recorded as one of the board’s revenue sources.
The CAA budget allocates parking revenue of $822,808 to DeVos Place this year and $857,613 next year, and $123,112 to the arena this year and $125,003 next year. All four of the figures are the total revenue numbers the board expects to receive from its parking facilities for both fiscal years.
But not every dollar received from parking can be attributed to events held in the buildings. Some of that money comes from monthly parkers and some comes from people attending other downtown events, such as ArtPrize, Celebration on the Grand and the July 4th celebration.
The board’s preliminary capital improvements budget for both buildings is $3.8 million in 2011, with roughly $1.3 million of that a carryover from 2010. The two biggest projects, at $1 million each, will be done in the arena, with the expansion of the northwest concourse and the installation of an LED ribbon board along the façade of the upper bowl. The CAA has about $21 million in its capital reserve.
Board members are scheduled to adopt the operating and capital improvements budgets June 4.