Kent's ShoWare Center loses money for third consecutive year

Fans packed the ShoWare Center for a recent Seattle Thunderbirds game against the Portland Winterhawks but the arena has lost money three straight years since opening in 2009.   - Kent Reporter, file photo
Fans packed the ShoWare Center for a recent Seattle Thunderbirds game against the Portland Winterhawks but the arena has lost money three straight years since opening in 2009.
— image credit: Kent Reporter, file photo

Kent's ShoWare Center suffered financial losses for the third straight year in 2011.

The 3-year-old arena lost $457,480 last year after losses of $398,013 in 2010 and $451,723 in 2009, according to the ShoWare Center income statement released by SMG, the operator of the events center.

"Our adjusted gross income was down $55,000 and our indirect expenses were up $112,000 for a $167,000 variance," said Patrick McClusky, ShoWare finance director, as he explained the income statement at the Feb. 23 meeting of the Public Facilities District board, which oversees operations of the city-owned arena. "We had a higher event load versus our budget and lower than expected ticket sales and that lowers the profits."

The center had expenses of $2.53 million and revenue of $2.07 in 2011. SMG officials had projected a loss of $290,000 in 2011.

"The majority of the $112,000 for expenses was for utilities," McCluskey said. "With a higher event load we had electricity and gas on more and rates were up slightly."

McCluskey said SMG failed to budget for the higher electricity costs for running the new ShoWare marquee installed in early January 2011. The marquee along West James Street runs 24 hours a day, seven days a week.

"The video board increases electricity and we didn't anticipate that (cost)," McCluskey said.

ShoWare General Manager Tim Higgins told the board utilities costs will be watched closely in 2012. The utilities costs in 2011 were $478,617 compared to a budget of $399,400.

"We're going to have an energy audit to help us find how we can be more energy efficient to control utilities better," Higgins said.

The main challenge for the $84.5 million arena remained selling enough tickets. SMG budgeted 272,530 paid tickets for last year. The arena sold 249,933 tickets.

"It's all about selling tickets," Higgins said. "About 60 percent of our 182 events were ticketed events. If we sold about 700 more tickets at each event we'd be where we want to be."

City officials need the ShoWare Center to at least break even financially. The city continues to set aside money in its annual capital budget fund to cover the losses. That money could be used to help pay for improvements to city streets, facilities and other capital projects.

The Seattle Thunderbirds junior hockey team is the anchor tenant of the facility. The T-Birds signed a 30-year lease with the city after moving from Seattle's KeyArena in 2009. The T-Birds hope to earn a playoff berth this season, which would mean extra home games, after missing the playoffs two consecutive years.

"We're looking forward to another successful year as far as number of events," Higgins said. "But we need more butts in the seats at hockey games and all shows."

Mike Miller, chairman of the Public Facilities District, told the board that without the increase in the cost of utilities, the loss in 2011 would have been similar to 2010. Miller anticipates a turnaround in the economy would be a big help in 2012.

"The bottom line when one looks at the numbers is not a lack of events," Miller said. "It's the economy a little bit and maybe we'll see a little pickup in the overall economy and get what we need to get the attendance numbers up."

But a big turnaround isn't anticipated this year.

SMG projects a loss of $379,479 in 2012, slightly cutting the losses compared to last year.

"We kept the revenue in line with 2011 activity," McCluskey said of the 2012 projected income statement. "On the expense side, we cut the (SMG) management fee in half (to $130,000) and we plan to run the utilities more efficient."

ShoWare Center revenue losses

2011    $457,480

2010    $398,013

2009    $451,723

We encourage an open exchange of ideas on this story's topic, but we ask you to follow our guidelines for respecting community standards. Personal attacks, inappropriate language, and off-topic comments may be removed, and comment privileges revoked, per our Terms of Use. Please see our FAQ if you have questions or concerns about using Facebook to comment.

Read the Oct 19
Green Edition

Browse the print edition page by page, including stories and ads.

Browse the archives.

Friends to Follow

View All Updates