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5/5/2013 10:14:00 PM
Prescott Valley Events Center seeks formula to increase profits
Les Stukenberg/The Daily CourierThe 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.
Les Stukenberg/The Daily Courier

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.
The Daily Courier, file
The Prescott Pops Symphony Orchestra performs at the Prescott Valley Convention and Events Center for 3,500 local schoolchildren.
The Daily Courier, file
The Prescott Pops Symphony Orchestra performs at the Prescott Valley Convention and Events Center for 3,500 local schoolchildren.

Cindy Barks
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.

PRESCOTT VALLEY - 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.

Deficit situation

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.

High expectations

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.

Related Stories:
• PV Event Center: Lawsuit pits investors against town, developers
• CENTER OF ATTENTION: CFD is official owner of PV Events Center
• Unpaid debt adds up for Prescott Valley Event Center

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Reader Comments

Posted: Tuesday, May 07, 2013
Article comment by: Hooty Hoo

At least a prison would guarantee a full house lol. What I don't get is if they are relying on a bad minor league hockey team as a tenant, and concerts lose money (why is that?), what are they going to do in the building the rest of the time? Don't tell me that swap meets and bake sales and "weddings" make money. I don't get the plan.

Posted: Monday, May 06, 2013
Article comment by: Gracie Luv Look for the Sunrise !

My submission of turning the arena that no one goes to into a prison is serious. In some progessive Scandanavian countries prisons are place of correction and perhaps saving people is important to the society. ... I feel it would be a real boost to the local economy to have a boom in residents ... After all Judge yee not, lest ye be judged. ... I will pray for all. Thank You and God Bless

Posted: Monday, May 06, 2013
Article comment by: You people are just plain weird!! !!

So you want the building to close and go into foreclosure because of ??????
You are jealous that someone made some money off of real estate? Really!
I do not get it. Many of you are having heart attacks over nothing. You control nothing with this endeavor and you wishing ill of others has no positive consequences. Most of you do not even go there. You don't know what flags are up on the inside. You went to a concert last decade.

The caustic diseases in these communities are just plain strange. I never seen anything like it.

It's like the casinos that they were building in Nevada that they ran out of money. Huge blight!!!

Posted: Monday, May 06, 2013
Article comment by: where is

Has anyone else noticed there are no posts from Tom Steele. Dose anyone think they are being blocked?

Oh the freedom of the press, please.

Posted: Monday, May 06, 2013
Article comment by: Tom Steele

Gary Spiker did what could be done to make the fairgrounds clean and profitable in a poor economy. He also came to the PV Event Center, LLC, at a time of the lowest ebb in our economy, So get off his back. The problems of both the fairgrounds and the event center lay with the self appointed good ole boys (and girls) who are also supported by the taxpayers of Prescott Valley. These people were the cheer leaders for both public - private measures that in their poor management only benefited the private parties. Today, thanks to Mayor Skoog and the 2006 council the town is now liable to pay off the 35 Million in bonds. Today, the PV taxpayers are also paying out of our general fund for this error of judgement. Also, the town does not require the PV Event Center, LLC to provide financial statements to them for review. The reason could be that this would allow "We the People" to ask for copies. Then, we could see who is getting thousands of dollars every month from a loosing proposition. We know the Fain Signature Group by contract, is getting monthly payments for the parking lots, lighting and landscaping. What other expenses are being paid and to whom?

Posted: Monday, May 06, 2013
Article comment by: Fed Up

Two white elephants in one town. How lucky can we be. It appears that the powers to be weren't happy with one miscalculation of the population or income to feed both. It seems that the creator of this nightmare won't share equally the outcome.

Posted: Monday, May 06, 2013
Article comment by: Global and Fains are still Skimming-- that why its open

Collect the money and don't pay the bills. The Carnivals are in the parking lot--owned by Fain. Why did the Town back $35 million and not own the parking lot. Fain gets $1 or $2 for every person attending the arena even if they don't park in the lot. What a skim?

Posted: Monday, May 06, 2013
Article comment by: Larry t

People speak that they are outraged that the tax payer is footing the bill for politicians making bad decisions. But people continue to put these people back in office. It should be illegal for government to use tax payer funds for these ventures. If the private investors are not willing to put there funds into it then why are politicians risking using our money?

Posted: Monday, May 06, 2013
Article comment by: Good Luck P.V.

Another article worse that the first where does it all end up. Make a Prison out of that coffin, and I know exactly who to put in it first.

Posted: Monday, May 06, 2013
Article comment by: I voted for Skoog

I thought I was smarter than that. I went to the Library candidate forum. I thought Mr. Lizza was a dark,kind of down guy,I thought he just had a chip on his shoulder, Harvey was positive and told us we were doing great. Here we are two months after the election, The Town says it is broke, we do have amazing bond debt, photo radar is corrupt,and Tim's Toyota Center is going bankrupt and will cost us millions. This has all been confirmed in the last few months by the Prescott Courier. I bet on the wrong horse. I am sorry I doubted you Mr. Lizza, but I could not believe things were that bad.

Posted: Monday, May 06, 2013
Article comment by: Gnarly Harley

Flagstaff gets Jimmy Eat World and PV gets Pat Benetar, The Doobie Bros. and The Moody Blues. What does that tell you about our clientele? What's next, Wayne Newton?

Posted: Monday, May 06, 2013
Article comment by: Gracie Luv Think outside the Box !

I think the best solution would be to re do the interior into jail cells and make it a prison, privately run of course. That should get the dollars rolling in. The prisoners families could relocate to the Glassford hill apartments and be close to their loved ones. Instead of shrinking in horror at the idea of a prison, we should embrace the idea of helping those who went wrong.

Posted: Monday, May 06, 2013
Article comment by: suzi bell higgins

Get rid of your photo radar for one thing, Duh!

Posted: Monday, May 06, 2013
Article comment by: Hooty Hoo

So Global hires a consultant to estimate the economics and the estimate was was off? Imagine that! You mean you can't make it when your main tenant is a LOW LEVEL HOCKEY TEAM.....really? You lose 20 grand on a sold out Miranda Lambert concert (the only time I've been there in years)? Now that's a model for success. The Donald should take some pointers here. Maybe the folks in Jackass Acres should do what they do best: GROW SOME WEEDS.

Posted: Monday, May 06, 2013
Article comment by: HISTORY REPEATS ITSELF

Gary Spiker was involved in the demise of the fairgrounds as well. Duh!

Posted: Monday, May 06, 2013
Article comment by: Grow your own Hockey Fans

I attempted to pursue this line of thought for a number of years to no avail.
It all starts with PV actually developing a real Open Skate / Open Hockey program.
PV has the ultimate sweet-heart deal with Global to use the rink virtually free of charge and collect ALL the proceeds. As a small business owner, boy would I like to get my hands on that one....and make it rock.

I emailed Brian Whitty of Parks and Rec a few years back with simple zero cost ideas, and like a good government employee he never even had the courtesy to reply.
Global would be wise to have a hand in growing this opportunity but yet again, totally missing the opportunity.

I believe it was 2 or 3 years ago Global allowed a second party to install Sport Court on the floor for a shot at summer Inline and Quad skating, excellent idea, bad execution.
There was NO promotion and worst yet NO skate rental (like a parent is going to buy a pair of hundred dollar skates for their child to TRY skating) DUH.

The most simple equation is missed by all parties. The more you have the community involved in skating, any kind of skating the more you will literally grow your own clientele.

Unlike the mid-west were I grew up skating form the time I could crawl, this IS the desert and if you’re not willing to develop people's interest in Hockey and Skating in general, then you have NO business being IN the HOCKEY BUSINESS.

I remember back in the day, when the old Roller Rave would be packed to the rafters. And what did it produce? Some of the best Inline Hockey Players in the NATION.

How simple is that!

Posted: Monday, May 06, 2013
Article comment by: Chuck Marx

The leadership of the Tim's Toyota Center must do better. You're not going to pay off $30 million in debt holding garage sales and weddings. This is a 4,800 seat event center. There are HUNDREDS of bands that are near retirement that would love to play in front of 3,000 to 4,000 fans. You need to find them. I don't think the upcoming casino style knockoff bands will do the trick. What's the cost of running IMAX films in the center? It's sure big enough. Why aren't we holding outdoor concerts at the other white elephant, our racetrack?

Posted: Monday, May 06, 2013
Article comment by: Nothing New

So the $100 million dollar stadium has resorted to becoming a garage and yard sale center with the occasional carnival. They might as well convert it to a flea market center and be done with it. This is a disgrace but the city of Prescott Valley deserves it. Fain has carte blanche with the mayor and whatever they want, they get. Unfortunately the people of PV are the ones who voted these people in and will eventually flip the bill when things go south. When profits are made, private people line their pockets with money, with profits are lost, the town and its tax payers get the bill. That is one sweet deal. Welcome to the good old boys club of Prescott Valley.

A 5,000 seat stadium in a small town will not bring in big name artists and will not turn a profit for them unless the sell tickets for $250 a pop. Anyone with two brain cells would have known this from day one. The day the stadium was announced I predicted its failure, as did many other people. I could have given them factual projections and not some fabricated pie in the sky projections. This town and its politics are rotten to the core and I hope Allstate sues them all and wins.

Posted: Monday, May 06, 2013
Article comment by: Duped Bigtime

PV taxpayers/bondholders were duped on this Convention Center. The Convention Center was not built to be a hockey arena, it was to be a convention/event center.

Numbers were manipulated in order to get public bonds issued. Those bonds were as a result issued as highly A rated safe bond rating.

Millions of dollars lost, while the likes of Fain and others run to the bank. And to pour salt in the wounds, the building is still being used while the bondholders receive nothing.

It is doubtful that Allstate, the major bondholder will let anyone get away with this sham. A class action lawsuit is still pending and hopefully, the bondholders will recoup their losses from this sham..

So happy to hear my investment is being used for a "large yard sale". I could do that for free in my driveway and not have invested a dime in the community..

Posted: Monday, May 06, 2013
Article comment by: Let's get real

How many $2000 profit events do you have to have to make up $84 million in bond debt. How did we allow someone to sell us this bill of goods. Harvey you've been here for over 17 years this rests firmly on you shoulders, no two ways about this. You were an accountant, how do you account for this?

Posted: Monday, May 06, 2013
Article comment by: These people should not

These people should not manage an outhouse!!

"They owed about $325,000 to vendors." That says it all. Do these people think vendors and entertains don't spread the word.

You can't cheat people that work for you. The town should just give the whole thing lock, stock, and bond debt back to the fains.

Louie Lizza said this thing was on the verger of going dark but skoog said, "It's coming back they have 4 events next month."

Any fool should have know that 4 events would not save anything. But the people of Prescott Valley deserve this, they let skoog get voted back in.

As long as 2% of our tax dollars go to special interest I will not go there or shop in that area. There are many more like me, "We call ourselves hit 69 and shop west."

Posted: Monday, May 06, 2013
Article comment by: J N

Try bringing in shows and updated concerts (Rock, Country Shows, ETC...) that people actually want to see. Learn how to book events and they might not be in so much debt. This place is such a waste of money. Its sad because it has so much potential. Good Luck with not going into bankruptcy. Sorry but yard sales and cheap fairs in the parking lot are not paying the bills. And to book a christian concert for 3 days is the biggest joke of them all. Really how many people are gonna go to that one besides all the free tix that were given out to fill the seats. Get with the program and book shows that people want to see.

Posted: Monday, May 06, 2013
Article comment by: Prescott Valley The Definition of Insanity

And yet we keep electing the folks who make these poorly vetted, preposterous decisions! We deserve the debt, the interest

Posted: Monday, May 06, 2013
Article comment by:

"It's not that we're doing anything bad".- Except that you're not making any money, and making up an excuse to subsidize your job with taxpayer money for another day. But what else is new.

Posted: Monday, May 06, 2013
Article comment by: Steven Ayres

Good work, Cindy.

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