NLA begins year with deficit
ALPENA — When Northern Lights Arena was built it, wasn’t done so to be highly profitable, but instead to collect enough revenue and make enough profit to save for a rainy day and make improvements over time.
For the last several years the arena has struggled to be profitable and will begin 2018 with a significant budget deficit.
Arena Manager Keli Werda didn’t provide specific dollar amounts, but said there are various reasons revenue is down and expenses up. She also said the arena is one unexpected surprise from being in significant financial trouble.
“Let’s look at it this way,” Werda said. “We’re one small disaster from being in trouble. We try to look at it like things are going well, but if something doesn’t go well, there could be issues.”
Werda said despite the budget deficit everything is not gloom and doom at the arena. She said the price increases made in 2017 seem to be adequate in terms of increasing revenue and being affordable for user groups.
“I think we found our sweet spot,” she said. “We look at what the user groups charge their members and try to set a price that is fair for everyone. As it is, participation is down for the user groups and if we raise the rates too much, we could price more people out of being able to afford them.”
Werda said the arena also is doing its best to be a good community partner. She said it often will offer lower ice rates to schools and other groups and organizations that are strapped for cash because it is the right thing to do. She said in turn that has an impact on the overall revenue stream.
“We are community owned, but we are also a business, so sometimes it can be a difficult balancing act,” Werda said.
Another positive at the arena is the number of tournaments being held and the number of teams participating. She said there was talk about raising entry fees, but Werda said that could impact how many teams visit and stay in Alpena on tournament weekends.
“Everyone is competing with one another and there are tournaments in Traverse City, Sault Ste. Marie and other communities schedule them regularly,” she said. “We’re in a catch-22 because we don’t want to charge too much and teams playing somewhere else. These tournaments are important to the economy in Alpena and it is important to keep as many teams coming for them as possible.”
Several years ago there was a large investment into many facilities owned by Alpena County, which included extensive upgrades to heating, cooling and lighting at NLA. The county used bonds to pay for the equipment and in return charges the facilities an annual fee, which is supposed to come for the utility saving, to pay back the bonds. Werda said the amount the arena has to pay each year sort of handcuffs it and its operating fund. This year the Northern Lights Arena-Community will need to pay the county $39,328 for its share of the bond cost.
“It is a big hit,” she said.
Werda said the NLA-C contract with the county to operate the arena expires this year and if it rebids, she is going to ask the commissioners to help get the arena some millage funding. She said the youth and recreation millage will be up for renewal and it has largely supported another county owned facility, Plaza Pool, and she wants any renewal to include ballot language that specifies a certain amount of the money will go to arena operations.
“We want them to put language in there that says they are giving the pool $85,000 and also that they are going to give us the same amount of money too,” Werda said. “It shouldn’t be an us versus them thing, we are both owned by the county and important to the community. I just think we should be included and supported more.”
Werda said there were some new and exciting events introduced; some did well and some were not as successful as hoped. She said one thing that was popular was the Shipwreck Alley Rollers, which is the Alpena roller derby team. Werda said this season there will be matches between the two Alpena teams, but also more teams from out of the area.
“The roller derby was huge and the ladies are a fantastic asset to the arena and community,” Werda said. “Bouts begin in April and teams from out of town are invited to participate.”
Werda said coming up with fresh and new events is important, but because of the budget concerns, this year events that are held will be ones that are historically profitable. She said she would like to try more new things this year, but the margin between a net loss and net gain is too narrow to take a chance on hosting an event that could lose money.
“There are a lot of things I would love to try because new events are important,” she said. “There is no way we’ll be able to do that this year though. We are only planning on having ones that we know we will make money at.”
Steve Schulwitz can be reached via email at email@example.com or by phone at 358-5689. Follow Steve on Twitter ss_alpenanews.