Huber expected to OK $1.25M in music center upgrades

Supporters say additional work will pay for itself.

City officials have said all along that the upgrades will pay for themselves in increased concession revenue and sponsorship opportunities, and no general fund money will be used to pay for the projects.

The city estimates the combined annual debt service of the projects will be $80,955 over a 27-year period — an amount that would be covered by a VIP sponsorship with Circuits & Cables in Vandalia and revenue from three events with an attendance of 3,200 each.

City Council is scheduled for a final vote on the projects at Monday night’s meeting after the three pieces of legislation were sent to a fifth reading on Aug. 25. The three ordinances are $400,000 for the VIP area, $99,000 for VIP improvements and $758,880 for concession stand upgrades.

The administration committee recommended approval at last week’s meeting.

“Obviously, the issue has been vetted very thoroughly,” said Councilman Mark Campbell, chair of the administration committee. “Passing these and being able to move forward and finalize the project will simply ensure that the 2015 season is a great success.”

The debt service for the $499,000 in VIP area work, at 4.5 percent, is projected to be $32,112 a year over 27 years.

Council also is scheduled to vote Monday night on a VIP sponsorship contract with Mike Seibert, president of Circuits & Cables, that will pay the city $40,000 annually for the first five years of the deal. There also is a five-year option that includes an increase in the annual VIP naming rights fee.

The annual debt service for the concession stand upgrades is estimated to be $48,843 annually over 27 years.

The city projects that three events with an attendance of 3,200 each would generate $76,800 if each person spends $8. With the cost of goods (food and labor) at 35 percent, the city would profit $49,920 — enough to cover the debt service.

City Manager Rob Schommer said those numbers are on the “conservative end.”

“If we’re looking at this as something that not only self-supports, but generates additional revenue, this is the area we need to focus on,” Schommer said. “Those amenities add to the patron experience.”

Councilman Tyler Starline voiced concerns that the general fund would be used to make up any shortfalls.

“To increase spending, we have to theoretically put the general fund more at risk,” he said.

Assistant city manager Donnie Jones said all monies generated by the music center could be placed into a specific fund to pay for operating costs and debt service.

“The whole project is at greater risk without these amenities than with the amenities,” Jones said.

Last month, it was revealed that a pair of music center change orders totaling $323,751 and approved earlier this year set the stage for these additional costs, but staff did not communicate that information to council at the time.

Construction of the 4,500-seat covered music center at 6800 Executive Boulevard is expected to be completed by the end of the year.

The VIP area will feature a private concession area, private restrooms, dining tent, landscaping, and a separate entrance and parking area.

According to the city’s management agreement with Music and Event Management, Inc., Huber Heights will receive the first $150,000 of the annual net profit, with any additional net profit divided between the city (60 percent) and MEMI (40 percent).

Net profit includes concessions, ticket sales and venue sponsorships. The entire revenue generated by the music center’s naming rights directly goes to the city.

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