|5/6/2013 8:06:00 AM|
Prescott Valley's Tim's Toyota Center seeks formula to boost profits
|The Home and Heart Marketplace fills the Prescott Valley convention and event center Oct. 25, 2008. More current revenue-generators of a similar nature include the Biggest Yard Sale in Town, which took place April 26 and 27.|
Photo courtesy Les Stukenberg
|The Prescott Pops Symphony Orchestra performs at the Prescott Valley Convention and Events Center for 3,500 local schoolchildren.|
File photo courtesy The Daily Courier
This is the second installment in a series of articles on the financial status of the Prescott Valley Convention and Events Center.
Scattered tables bearing lamps, kitchen utensils, and knick-knacks occupied the floor of the Tim's Toyota Center this past week.
Walking through the darkened arena, center manager Gary Spiker explained that local residents were in various stages of setting up their stands for the weekend's featured event: The Biggest Yard Sale in Town.
On April 26 and 27, the sale took the place of the hockey players and cheering fans who had been there just weeks before.
Surveying the display tables, Spiker acknowledged that the programming focus has changed a bit since the center's early days in 2006 and 2007.
Indeed, a quick look at the planned events through the end of 2013 indicates that the center's schedule is heavy on carnivals, yard sales, weddings, graduations, and trade shows, and light on big-name concerts.
This year's musical entertainment includes an "Elevate" Christian festival on June 28-30, a Classic 60s with The Kingsman and The Safaris on July 27, and the Mannheim Steamroller Christmas Show on Dec. 7.
That compares with earlier shows that featured stars such as Stevie Nicks, Willie Nelson, Miranda Lambert, and Clint Black.
Depending on the concert and whether it sold out, however, Spiker says the big-name concerts "were losing $20,000 to $40,000 in an event."
That has led to a focus on smaller, less expensive events.
"On the yard sale, we will make maybe two grand," Spiker said. Even so, he added, "We're making a little bit instead of making nothing."
Rick Kozuback, president and CEO of Global Entertainment, which operates the center, agreed that the emphasis has changed somewhat since the beginning.
"We've had to scale back on concerts in the past year," Kozuback said this past week in a telephone interview. "We're now getting to a better mix."
He and Spiker emphasized the success of recent Tim's events, such as AIA (Arizona Interscholastic Association) athletic tournaments, the Yavapai County Contractors Association Home and Garden Show, and the Yavapai County Fair.
Spiker says such events bring tens of thousands of people to Prescott Valley.
For much of the past three or four years, the Tim's Toyota Center has failed to make a profit, and therefore has been unable to pay anything toward the $84 million in bond debt.
Kozuback and Spiker both attributed the problem to the economic downturn that began in about 2008/2009.
"The economy didn't go well a few years ago," Spiker said. "It is not that we're doing anything bad."
Added Kozuback: "We've experienced an economic crunch, and it's affected those kind of events. The difficulty we have is getting people to buy tickets. If we could fill the building to capacity, it would be a lot more viable."
The move away from big-name concerts is not unique to Prescott Valley, Kozuback said. He maintains that the large sports arenas in the Phoenix area also are booking fewer concerts.
Over the past several years, music has not been the only category to suffer at Tim's Toyota Center.
Numbers from Prescott Valley Economic Development Manager Greg Fister's office show that attendance at Arizona Sundogs hockey games dropped by nearly half over the past several years.
In 2007/2008, the games averaged attendance of 4,311 per game - close to capacity for the arena's 4,810 seats.
This past year, the Sundogs games averaged 2,617 people, Fister said - for 86,307 in total attendance.
Revenue from sponsorships, advertising, and luxury suites also has gone down as a product of the recession, say Spiker and Kozuback.
Road to recovery?
Despite the outlook of the past several years, Spiker and Kozuback both expressed some optimism for the future.
"When I came here in October 2010, they (Global) had lost $750,000," Spiker said. "They owed about $325,000 to vendors."
His goal for the first year: Cut the deficit in half.
During his second year, Spiker said the deficit was down to about $100,000. And he attributes that loss, in part, to the fact that the center spent about $90,000 to re-equip the concessions kitchen after the previous restaurant concessionaire left the center and removed its equipment.
Now going on his third year, Spiker is hopeful that the center could make money for the first time since the start of the recession.
"Next year, without having to buy equipment, we should be a couple hundred thousand dollars to the good," Spiker said. "We've about done a $1 million turnaround in two and a half years."
Kozuback said one of the keys to success would be addition of a new sports tenant (in addition to the center's main tenant, the Arizona Sundogs). He acknowledges, however, that accomplishing that has not been an easy proposition.
"In the past, we've had three different versions of arena football, and none were successful," Kozuback said. "It's been a difficult struggle to find."
And through it all, the center must deal with its overhead.
"To run this place every month costs about $100,000," Spiker said, noting that the expenses include everything from staff to electricity, insurance, trash collection, and telephones.
That is not even factoring in the incidentals that come up regularly, such as the overhaul of the engine for the ice plant motor, which could run as high as $10,000, or the replacement of the engine for the carpet cleaner.
Just keeping the ice at the proper temperature adds $750 per day to electricity costs, Spiker said.
Prior to the development of the center in the mid-2000s, the town and Global paid a consultant to conduct a feasibility study that projected event and attendance numbers.
That led to a projection in the bond issue's "official statements" that the center would attract 133 events per year, and attendance of 480,000 people.
Spiker reported that the actual average number of events has been in the 90 range, with 96 in the past year.
While he did not provide an exact attendance number, Spiker said the main events - including 33 Sundogs games, the county fair, the home and garden show, gun shows, and sports tournaments - bring in about 250,000 people.
Global, which has developed sports arenas in small markets around the country, faced similar problems in Rio Rancho, N.M., a suburb of Albuquerque.
A 2008 operations analysis of the Santa Ana Star Center in Rio for the City of Rio Rancho stated: "Although the management structure at the Santa Ana Center is not unique among similar public assembly facilities, the original premise of the project was that it would be completely private-sector driven with the stated expectation that the facility would be financially self-sustaining."
Despite commitments made in the management and operations agreement, however, "Global has not met its projected financial results," the Rio Rancho report stated. That left the City of Rio Rancho, which owns the center, to pay for the facility's operating deficit and debt service.
Posted: Wednesday, May 8, 2013
Article comment by:
The Truth of the Financial situation has been hidden
The arena is a TOTAL disaster, how can they be doing better---Alec, Do you pay taxes? If yes, How can you not be offended. This will cause a property tax!
Posted: Wednesday, May 8, 2013
Article comment by:
Dear Alec, Fraud of $70 million is news
Quit drinking the Koolaide
Posted: Tuesday, May 7, 2013
Article comment by:
WHY IN THE WORLD IS THIS PAPER PRINTING SUCH A NEGETIVE ARTICAL ABOUT ONE OF THE BEST ASSETTS IN THE TRI CITY AREA....THE EVENT CENTER HAS BEEN MAKING GREAT PROGRESS AND DOING GREAT THINGS AND THE COMMUNITY HAS BAGAN TO REALIZE WHAT A GOOD ASSET IT IS....
THIS ARTICAL WILL ONLY SET THEM BACK WITH ALL ITS NEGETIVITY.....WHY...????? DOES THE COURIER NOT WANT THEM TO BE SUCCESSFUL,,,DOES THE COURIER NOT WANT TO HELP THEM THROUGH THESE TOUGH ECONOMIC TIMES....PLEASE SOMEONE HELP ME HERE AS I CANNOT FOR THE LIFE OF ME FIGURE OUT WHY THE COURIER HAS CHOSEN TO TRY AND DESTROY A REALLY GREAT PLACE WITH ALL THE NEGETIVE CRAP.....
Article Comment Submission Form