COURTESY PHOTO, accesso ShoWare Center

COURTESY PHOTO, accesso ShoWare Center

Federal relief grant helps cover losses at Kent’s ShoWare Center

City-owned arena makes profit of $436,456 in 2021

A federal relief grant given to the city of Kent-owned accesso ShoWare Center due to losses suffered during COVID-19 has boosted the arena to its first annual profit since opening in 2009.

The arena in 2021 had operating income of $2.97 million and expenses of $2.54 million for a profit of $436,456, according to the income statement released May 12 by ShoWare Center operator SMG. SMG used $1.63 million of its federal Shuttered Venue Operating Grant to help cover losses from canceled events.

The city received grants of $3.1 million and $1.5 million from the U.S. Small Business Administration for the Shuttered Venue Operators Grant for emergency assistance for venues impacted between March 1, 2020 and Dec. 31, 2021. The funds are part of the American Rescue Plan Act approved by Congress.

The 6,200-seat arena lost $1.14 million in 2020 when it was closed for all but the first two months of the year. No federal grants were received in 2020 by the city to help with the 2020 budget.

Eligible applicants could qualify for grants equal to 45% of their gross earned revenue, according to the U.S. Small Business Administration. Funds must be used on eligible expenses such as payroll costs, contractual agreements, utility payments, ordinary and necessary business expenses and administrative costs.

“The highlight for 2021 for us was the Shuttered Venue Operators Grant money,” said Tim Higgins, ShoWare Center general manager, during a May 12 report to the city’s Public Facilities District Board that helps oversee arena operations. “A total of $1.6 million was put into our 2021 budget.”

Higgins said the grant money also will be used for some capital projects and to offset significant losses due to shutdowns in 2022.

Several of the projects include rebranding of the concession stands; installing grab and go concession areas where people pick up food or drink items themselves and pay with a card or phone; new kitchen equipment that needs replacing after 13 years; and LED sign boards for advertisers.

SMG used funds that were going to rebrand the concession stands prior to the pandemic to help cover operating losses.

SMG had to submit losses and expenses to the federal government in order to receive $4.6 million in relief funds.

Revenue from rental income was $282,959 below budget in 2021, food and beverage revenue was $276,023 under budget and advertising income was $178,108 under budget

So far, Higgins said the first and second quarters of 2022 were not good financially with mask mandates and vaccination requirements in place for event entry through March.

“That affected our attendance across the board by about 50%,” Higgins said. “Now that’s been lifted, we are seeing a nice comeback.”

Attendance started to increase at Seattle Thunderbirds hockey games later in the season, including 4,001 fans at a Western Hockey League playoff game May 13 against the Portland Winterhawks.

Since the arena opened in 2009, it had lost money each year, prior to 2021. The facility had its best year in 2018 when it lost $197,052. The arena lost $641,834 in 2019.

SMG staff project a loss of about $751,711 in 2022. That figure does not include the use of federal grant money to help cover the losses.

The city helps cover the losses with its annual contribution of $500,000 from the general fund to arena operating costs. The city also kicks in $300,000 a year for capital costs where needed to help keep the facility upgraded.

The arena took in $145,528 admission tax revenue in 2021. The city charges 5% on each ticket sold. That money goes into the city’s general fund but is transferred into a ShoWare operating fund to help pay for capital projects.

The city collected $638,090 from the admissions tax in 2019, $488,638 in 2018 but just $138,501 in 2020 due to closure of the facility because of COVID-19.

Busy June schedule

There are 20 events over 30 days in June at the arena, Higgins said. Most of those are high school and college graduations, including four Kent high schools, four Federal Way high schools and three Renton high schools.

Other high schools with graduation at the ShoWare Center include Mount Si, Mercer Island, Kennedy Catholic, Tahoma, Mount Rainier and Bonney Lake.

Green River College and Renton Technical College also will have graduation at the arena.

Other events include the Kent International Festival June 18 and a X League women’s football game June 25 between the Seattle Thunder and Denver Rush.

New scoreboard

A new scoreboard is scheduled to be installed June 30 after delays due to the pandemic and finding a time period to install it.

The Kent City Council approved in 2020 a new scoreboard for the arena at an estimated cost of $500,000. The new board will have larger video screens and display areas for advertisers.

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