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Kent's ShoWare Center lowers losses in 2013
The ShoWare Center's bottom line took its smallest hit last year since the arena opened in 2009.
Kent's city-owned arena still lost $370,874 in 2013. But that compared to a deficit of $707,541 in 2012 and losses of more than $400,000 in each of the first three years.
"That's our best year in five," said Tim Higgins, ShoWare general manager, at a Jan. 30 meeting of the Public Facilities District board that helps oversee operations of the $84.5 million arena.
The arena had expenses of $2.57 million and income of $2.20 million in 2013, according to the ShoWare Center income statement.
SMG, the company hired by the city to operate the facility, estimated losses of $495,000 for last year.
"We budget for what we know and what historically has happened," Higgins said about the higher loss projection. "As the year progresses through what we call hustling we're able to find shows and make things happen."
The arena drew a record crowd of 7,129 for a Dec. 14 concert by the popular country duo Florida Georgia Line. It's those type of concerts that pump up the bottom line.
Despite the stronger year in 2013, SMG projects a loss of $484,000 in 2014.
"What we know going in is what we budget," Higgins said. "We feel good about bringing this number down but from a budget perspective when we put this together historically this is what we know."
Board member Lew Sellers asked Higgins what it would take for the arena to break even this year.
"Probably four or five shows similar to Florida Georgia Line with capacity sold-out shows," Higgins said about bringing in crowds of 7,000.
Ben Wolters, city economic and community development director who helps oversee ShoWare Center operations, said even with larger crowds arenas no longer make as much money from concerts.
"What's working against us on that is post-recession and what I'm learning from SMG and other sources is show revenue is down one-third from what it was before in terms of net revenue after expenses," Wolters said.
The ShoWare Center has had to cut its rent in order to attract some concerts and shows, Higgins said.
A long Western Hockey League playoff run by the Seattle Thunderbirds this season also would boost revenue. SMG budgets for only the regular season T-Birds games, so any playoff home games mean more revenue. The T-Birds have sold out (6,200 fans) two games so far this season.
The city sets aside money each year to cover the anticipated losses at the arena, including $500,000 in the 2014 budget. If not needed for the arena, that money could be used to help pay for improvements to city streets, facilities and other capital projects.
The arena also hosts a variety of community events, including 17 college and high school graduations scheduled for 2014. Higgins said the arena doesn't make or lose money when it hosts a graduation.
"There's no question about the value of the facility to the community is far greater than the $370,000 loss," Sellers said. "But when you look at the negative number you wonder when it's going to be zero."
Higgins said the sellout of the Florida Georgia Line concert has led to more promoters looking at bringing shows to Kent.
"We're getting calls we didn't receive before," Higgins said. "I've always said success breeds success and we've seen that every year. We get calls for holds, holds for dates. That doesn't mean we get the show but we're getting recognized in the industry to hold dates for a tour. We haven't seen that before. It's a matter of time of getting recognized in this competitive market."
ShoWare Center revenue losses
Total: $2.47 million