Slow ticket sales caused the city-owned ShoWare Center in Kent to lose money in May, the fourth out of five months the arena has operated at a loss since opening in January.
ShoWare marketing officials reported an operating loss of $43,793 for May and $213,716 for the year during at a Public Facilities District board meeting Thursday. The board oversees operations of the $84.5 million events center.
“We’re having events, but ticket sales are lower than expected,” said Tim Higgins, ShoWare general manager, at the board meeting.
The ShoWare Center had expenses of $1.13 million and receipts of $923,952 from Jan. 2 through May 31 for a loss of $213,716.
Ticket sales were slow for the Styx, REO Speedwagon and .38 Special concert on May 27. A crowd of 3,715 attended the concert.
“Ticket sales were not where we thought they’d be,” said Higgins, who had anticipated a crowd of about 5,700 at the rock concert. “We still made a few thousand (dollars), but it would’ve been more.”
SMG, the operator of the arena, co-promoted the concert to bring the bands to Kent. SMG’s contract with the city allows the operator to spend its own money to help bring shows to the arena.
“If not for that fund, there would have been no (Styx) show to begin with,” said Ben Wolters, city economic development director. “It’s a calculated risk. But the community wanted a show and it’s incredibly intense competition for shows across the nation.”
People seem to be cutting back what they spend on concerts because of the recession.
“It’s very light and it’s not getting any better,” Higgins said. “And at other venues, ticket sales are not that great.”
Operating losses were lower in May ($43,793) than in April, when the arena lost $96,669.
“Even though it was a loss, it was quite an improvement from the previous month,” said Patrick McCluskey, ShoWare finance director, to the board.
Other major events at the arena in May included the World Famous Lipizzaner Stallions, the Uprising Mixed Martial Arts pro event, and Wine, Women and Wow.
The arena made money ($51,234) in March when the Seattle Thunderbirds junior hockey team played nine home games, including a total of three games against rivals Everett and Portland. The T-Birds are the anchor tenant of the ShoWare. Their home opener for the 2009-2010 season is Sept. 18 against Everett.
Once the Western Hockey League releases the full T-Birds schedule in late July, ShoWare officials hope to fill in open dates around the hockey schedule with more concerts and other events in an effort to turn a profit.
“Once we know what dates we can book, we’ll have a better estimate at what the rest of the year will look like,” said Bob Nachlinger, city finance director.
The Ringling Bros. Barnum & Bailey Circus Sept. 1-6 and Disney on Ice Nov. 10-15 are among the major events scheduled for the rest of the year.
If the events center loses money this year, it could impact the city’s capital improvements budget, although city officials already set aside $600,000 within that capital budget to help cover a potential lack of revenue at the arena. City officials use the capital budget to help pay for improvements to city streets, facilities and other projects.
Most of the project funds to build the arena will come from the city issuing bonds to be paid back over the next 30 years from fees collected from events and activities at the facility. If those fees to pay the debt service fall short, city officials would use funds from the capital budget.
In addition to city bonds, the state will pay nearly $21 million toward the arena through a Public Facilities District that allows Kent to keep 0.033 percent of the state’s share of the sales tax, or 3.3 cents on every $100 purchase, collected in the city.
Even though sales-tax revenues to the Public Facilities District are lower than expected so far this year, the fund has a positive balance of $408,724.