Federal relief grant helps cover losses at ShoWare center in Kent
COURTESY PHOTO, ShoWare Center access
A federal relief grant to the City of Kent-owned accesso ShoWare Center due to losses suffered during COVID-19 propelled the arena to its first annual profit since opening in 2009.
The arena in 2021 recorded an operating profit of $2.97 million and expenses of $2.54 million for a profit of $436,456, according to the income statement published on May 12 by the operator. from the ShoWare Center SMG. SMG used $1.63 million of its federal operating grant for closed venues to help cover losses from canceled events.
The city received grants of $3.1 million and $1.5 million from the U.S. Small Business Administration for the Closed Site Operators Grant for emergency assistance for sites affected between March 1, 2020 and December 31, 2021. The funds are part of the American Rescue Plan Act. approved by Congress.
The 6,200-seat arena lost $1.14 million in 2020 when it was closed for all but the first two months of the year. No federal grants were received in 2020 by the city to help with the 2020 budget.
Eligible applicants could receive grants equal to 45% of their gross earnings, according to the US Small Business Administration. Funds must be used for eligible expenses such as salary costs, contractual agreements, utility payments, ordinary and necessary business expenses, and administrative expenses.
“The highlight of 2021 for us was the closed site operator grant money,” Tim Higgins, general manager of the ShoWare Center, said during a May 12 report to the Public Facilities District Board of the City. city, who helps oversee the operations of the arena. “A total of $1.6 million has been invested in our 2021 budget.”
Higgins said the grant money will also be used for some capital projects and to offset significant losses due to closures in 2022.
Several of the projects include rebranding concession stands; set up take-out concession areas where people pick up food or drink themselves and pay with a card or phone; new kitchen equipment which must be replaced after 13 years; and LED billboards for advertisers.
SMG used funds that would rebrand dealerships before the pandemic to help cover operating losses.
SMG had to submit losses and expenses to the federal government in order to receive $4.6 million in relief funds.
Rental revenue was $282,959 below budget in 2021, food and beverage revenue was $276,023 below budget, and advertising revenue was $178,108 below budget
So far, Higgins said the first and second quarters of 2022 haven’t been good financially with mask mandates and vaccination requirements in place for entry to events through March.
“It affected our stake across the board by about 50%,” Higgins said. “Now that that’s been lifted, we’re seeing a nice comeback.”
Attendance began to rise at Seattle Thunderbirds hockey games later in the season, including 4,001 fans at a May 13 Western Hockey League playoff game against the Portland Winterhawks.
Since the arena opened in 2009, it had lost money every year, before 2021. The facility had its best year ever in 2018 when it lost $197,052. The arena lost $641,834 in 2019.
SMG staff forecast a loss of approximately $751,711 in 2022. This figure does not include the use of federal grants to help cover losses.
The City helps cover the losses with its annual contribution of $500,000 from the general fund to the operating costs of the arena. The city also injects $300,000 annually for capital expenditures needed to help keep the facility up to date.
The arena collected $145,528 in admission tax revenue in 2021. The city charges 5% on each ticket sold. This money goes into the city’s general fund, but is transferred to a ShoWare operating fund to help pay for capital projects.
The city collected $638,090 in admission tax in 2019, $488,638 in 2018 but only $138,501 in 2020 due to the facility being closed due to COVID-19.
Busy June program
There are 20 events over 30 days in June at the arena, Higgins said. Most of them are high school and college graduates, including four Kent high schools, four Federal Way high schools, and three Renton high schools.
Other graduate high schools at ShoWare Center include Mount Si, Mercer Island, Kennedy Catholic, Tahoma, Mount Rainier, and Bonney Lake.
Green River College and Renton Technical College will also graduate at the arena.
Other events include the Kent International Festival on June 18 and a women’s X League soccer match on June 25 between the Seattle Thunder and the Denver Rush.
A new dashboard is expected to be installed on June 30 after delays due to the pandemic and find a deadline to install it.
Kent City Council in 2020 approved a new scoreboard for the arena at an estimated cost of $500,000. The new panel will have larger video screens and display areas for advertisers.