Kent city officials expect construction costs at the city-owned ShoWare Center to stay within budget when all of the final invoices are submitted in the next two months.
“We believe the project will come in at about $60,000 to $100,000 over budget,” said Ben Wolters, city economic development director, at a Public Facilities District board meeting Thursday at the ShoWare Center. The board oversees operations of the events center.
The $84.5 million events center opened Jan. 2 along West James Street. Construction started in August 2007 and finished last December.
“The number (over budget) is a projection,” said Brad Tong of Shiels Obletz Johnsen, Inc., a Seattle-based management firm representing the city of Kent during construction of the arena. “We are still a couple of months away from the final numbers. But we project to be on budget, at or near a zero balance.”
Tong said 94 percent of the invoices are paid. Mortenson Construction, the Minneapolis-based company that built the facility, expects to finish a final few items within the next few weeks.
The Kent City Council voted 4-3 last July to approve a $5.9 million construction budget increase for the events center. That raised the budget to $84.5 million.
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.
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.
Sales-tax revenue for the Public Facilities District dropped to $48,144 in January compared to $55,649 in December 2008, said Bob Nachlinger, city finance director.
“January, unfortunately, was not too good,” Nachlinger told the board. “Revenue was down for the city and the Public Facilities District substantially.”
The city has averaged nearly $72,500 per month since it started to collect the sales-tax revenue last March for the events center. City officials will watch the sales-tax revenue closely during 2009 and beyond since it will be used to help pay off city debts on the arena.
“Any shortfall would have to be made up by the city,” Nachlinger said.
Bookings for events at the ShoWare Center are starting to fill in. But marketing officials found out the recession has limited the number of music groups on tour.
“Concerts are important and we’ve struggled out of the gate because of the recession,” Wolters said. “There will be a lot of focus to recruit concerts.”
More than 3,500 tickets have been sold for the Chris Tomlin concert on March 8, said Beth Sylves, marketing director for the ShoWare Center. That is the only concert booked so far at the events center.
“We have five other dates with concert holds,” Sylves said. “But we can’t release any names yet.”
Suite sales at the ShoWare Center also were hit by the recession. The Seattle Thunderbirds hockey team, the anchor tenant of the events center, is in charge of selling the 20 suites.
Eleven suites have been sold for the year, said Colin Campbell, T-bird vice president.
“We lost two car dealers and a realtor because of the economy,” Campbell said. “But every game we have a couple of clients looking at suites. Sales will take off again. I thought we would sell them out. Our staff is selling individual games at the suites.”
Wolters cautioned about reading too much into the early slow sales for the ShoWare Center.
“We now have something to sell because we’re open,” Wolters said. “Over the coming months and by summer we’ll have a much better view of the revenue department. We’ve only been open four weeks.”
The Thunderbirds averaged 3,922 fans per game through their first 10 games in Kent. That included two sellouts of 6,113.
“Our average over 10 games is a good number,” Campbell said.
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