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Is $45M cost of arena valid?

By Bertram de Souza

Youngstown Vindicator (Ohio)

December 7, 2008

That question has preoccupied this writer ever since the publicly owned Chevrolet Centre opened three years ago. An effort to get the U.S. Government Accountability Office to conduct a cost analysis of the downtown Youngstown sports and entertainment facility failed because neither the mayor at the time, George M. McKelvey, nor members of city council expressed interest in such a review.

Why should the GAO have cared? Because of the $45 million the city shelled out for the 6,000-seat arena, $26.8 million came from the federal government — in the form of an outright grant from the U.S. Department of Housing and Urban Development secured by then Congressman James A. Traficant Jr. of Poland, D-17th.

To be sure, HUD officials did insist that every federal dollar spent was invoiced, but it did not answer the big question: Is the facility on Front Street really worth $45 million?

Every time this writer has raised the issue, the reaction has been thus: “You’re a naysayer;” “You’re too negative for the Mahoning Valley’s good;” and worse, “You’ve wanted the arena to fail ever since it opened.”

That charge was made two Saturdays ago by McKelvey when he appeared on “The Valley’s Talkin,’” a radio talk show on 1330 Talk WGFT AM hosted by Dr. William C. Binning and this writer. It could be that the former mayor’s contention was prompted by the way he was introduced. In the introduction, it was suggested that since General Motors Corp. is no longer willing to pay for the naming rights, the arena should be named “The George M. McKelvey Bowl.” No it wasn’t meant as a compliment. Rather, this writer told Mc- Kelvey that the name would reflect the fact that he was in charge of city government when decision was made to “flush $45 million” down the drain, The ex-city councilman and Mahoning County treasurer could be forgiven for lashing out.

Huge loan

However, the fact remains that when a city like Youngstown is on the hook for a $12 million loan it secured in order to pay its share of the construction cost, a microscopic look-see of every aspect of the project, from the purchase of the land for $1-plus million — the property was in no danger of being snapped up by private developers, so why did the city pay a premium price? — to the money made by the construction manager, the general contractor and the subcontractors.

Then there are all the other contracts related to the operation of the facility.

But seeing as how the Chevrolet Centre is three years old, isn’t an independent evaluation too late?

Not at all. There are credible reports that the roof is already in need of repair, an important safety net to protect workers who walk on the roof’s girders was never installed and the electronics that operate such things as the score board are already out of date.

All that brings us to Ohio Auditor Mary Taylor, the lone Republican holding a statewide administrative office. Taylor has been aware of this writer’s concerns about the Chevrolet Centre’s cost and now that her office has completed its first audit of the city of Youngstown, she has offered to conduct a performance audit of the arena.

Youngstown Mayor Jay Williams has said he is willing to consider Taylor’s offer. However, the city would have to pay for it.

Construction review?

In talking to Vindicator writers about the city audit and her offer for a performance audit, Taylor also revealed that she and her staff are discussing whether the state auditor has the authority to perform a construction recovery audit.

“The office has never done one,” Taylor said, but noted that the state auditor has the statutory authority to monitor the expenditure of public dollars.

If (when?) she and her staff determine that there is authority with regard to reviewing the construction of public projects, the Chevrolet Centre will be the first. (At least that’s what is being proposed in this space.)

The idea that the construction of the arena does not warrant close scrutiny because it has been in operation for three years is wrongheaded and myopic.

If a project of this financial magnitude is able to escape scrutiny because time has passed, the keepers of the public dollars will be emboldened to do as they please. They already do.