Cal U's 'crown jewel' convocation center posts $400K loss
By Amanda Dolasinski
Published: Saturday, April 27, 2013, 9:00 p.m.
In its first 16 months, California University of Pennsylvania's controversial $59 million convocation center posted more than $400,000 in losses from nearly 100 events held there, according to records obtained through the state's Right to Know Law.
The sprawling 6,000-seat facility — the impetus of a bitter campus debate fed by cost overruns, fundraising shortfalls and mounting debt — also failed to lure the steady flow of high-revenue regional events envisioned by its chief architect, fired university President Angelo Armenti Jr., records show.
Through his attorney, Armenti declined to comment.
Many of the 98 events held in the center, ranging from basketball and volleyball games to commencements, student orientations and holiday staff parties, weren't new events, but regularly scheduled gatherings that would have been held elsewhere on campus if the center hadn't been built, officials confirmed.
“Some of them (events) needed a little bigger space. ... But was it worth putting out $60 million so a few of these events could have a little more space? I don't think so,” said Michael Slavin, president of the school's faculty union. “It's a nice thing, but it's not a necessary thing.”
Slavin and fellow faculty members were vocal critics of Armenti and the project's drain on academic programs at the Washington County campus.
University spokeswoman Christine Kindl said the success of the 142,000-square-foot center can't be measured solely on the basis of profit-and-loss statements.
“This is a multi-use facility. We have different events here of different sizes that can be successful. The fact that it's not filling every seat in the arena doesn't mean it's not successful,” Kindl said.
She said the center's profit shortfall will be covered through the school's general operating fund.
Highs and lows
The facility's most successful event in terms of earnings was a conference held June 30, 2012, by the Church of Jesus Christ, netting a profit of $49,455, records show.
The least successful event was one of the center's first functions: “Leonardo da Vinci: Machines In Motion,” a traveling exhibit comprising full-scale machines built by Italian scientists and craftsmen based on Da Vinci's designs.
The exhibit cost about $180,000 to stage, but generated no profit, records show.
University officials defended the show, which was free to the public, because it brought an estimated 20,000 people to campus, including students of all ages.
One of the most highly publicized events was a show by country music singer Kenny Rogers in April 2012.
Only 1,935 tickets — less than a third of the center's capacity — were purchased for Rogers' show, which cost about $131,000 and netted a $6,241 profit, records show.
On April 13, singer-songwriter Bob Dylan appeared in the center, but as of this date, an April 18 request for records from that show had not been fulfilled.
Only a few of the 45 athletic events — mostly volleyball and basketball — held in the center posted meager profits, with most losing anywhere from a few hundred dollars to more than $1,000, according to records. Those events previously were held in the school's Hamer Hall.
The facility's manager and promoter said the center's financial impact extends beyond the campus.
“It's an economic booster for the community,” said Mike Silva of Iowa-based VenuWorks, the company that paid $125,000 a year for five years to manage the facility and book events.
“Specifically, I'm talking about DQ, Subway and Campy's pizza and all the local retail shops,” said Silva, who arrived on campus in September when the facility's first VenuWorks manager “failed to meet our expectations” and was fired.
Mark Koehler, owner of Lagerheads Restaurant in Coal Center, adjacent to California, said the convocation center has been “a phenomenal asset at this point.”
“Any night they've had a concert, I've had a full restaurant,” he said.
California Mayor Casey Durdines said the borough recently enacted a 10 percent amusement tax that's attached to ticket sales for all events in the borough, which includes those in the convocation center. He said it's too early to predict the long-term impact of the tax.
Price, size criticized
From the beginning, the California University center has been a target of critics who said it was too big, both in price and size.
Armenti plowed ahead despite a university-sanctioned study calling for a smaller, less costly center with 3,500 seats.
He touted the center as the campus' “crown jewel” where “we anticipate hosting statewide science competitions, community events, trade shows, job fairs, country music concerts and other entertainment,” according to a 2009 report.
One day after Armenti was fired in May 2012, the State System of Higher Education, which oversees the 14 state-owned universities, issued an audit that was highly critical of the school's financial practices.
It cited convocation center cost overruns of more than $6.2 million and the school's failed promise to raise $12 million before breaking ground. To finish the project, the state system was forced to lend more than $15 million to the school, driving debt service for the facility from $1 million to $2.5 million for 25 years.
The IUP experience
A similar center, opened in 2011 at Indiana University of Pennsylvania, ended its first year with a profit of $7,226, records show.
Although IUP has a higher enrollment than California — 15,379 versus 8,608 — its center has a smaller capacity of 5,000.
The Kovalchick Complex has featured performers Stone Temple Pilots, Darius Rucker, Wiz Khalifa, Eric Church, the Ringling Brothers Circus, the Steve Miller Band and Disney on Ice, records show.
It is managed by Philadelphia-based Global Spectrum. In its five-year contract, there is a $36,000 cushion that the university can deduct money from if an event loses money.
California's contract with VenuWorks does not contain such a provision.
“We worked very hard on the contract,” said Samuel Phillips, IUP's assistant vice president for administration. “I'm not sure what's typical for university contracts, but I feel the system and our services negotiated a good contract.”
Some believe the California University center is only now beginning to gain momentum after a slow, difficult start.
“There was a lot of negative publicity about it to start off, but now it's in the hands of a good and capable group that's handling the management of it,” said Washington County Commissioner Larry Maggi, who serves as chairman of the school's council of trustees.
“I would hope that it would become self-sufficient, but if we don't reach those goals, it's still an asset to the community,” Maggi said.
Amanda Dolasinski is a staff writer for Trib Total Media. She can be reached at 724-836-6220 or firstname.lastname@example.org.
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