Detroit may have declared bankruptcy but that will have no impact on Cobo Center’s $279 million renovation or one of its biggest events, the North American International Auto Show.
In fact, Cobo is on a financial roll even while the eyes of the nation look upon Detroit with little or no financial confidence.
Cobo Center posted net operating income of $1.1 million through the first eight months of its fiscal year, says the Detroit Regional Convention Facility Authority (DRCFA). Great news made better given the DRCFA anticipated a $1.5 million loss for the 2012-13 fiscal year.
The DCRFA was able to pull off this financial upswing through May with an almost even split between reduced expenses and increased revenue. The revenue that came in was $585,000 more than budgeted and the total operating expenses came in at $543,000 under what was expected.
“We are very pleased with our progress in transforming Cobo Center into a generator of economic growth for Detroit and Southeast Michigan,” said Patrick Bero, CEO/CFO of DRCFA. “We’ve built a solid foundation for future growth during a year that was supposed to be difficult. With the new Grand Riverview Ballroom, new Atrium and new meeting space coming on line this summer, we’re going to be shifting into a higher gear next year.”
Cobo is funded by its revenue and the state of Michigan and it’s more than halfway through its $279 million renovation. That renovation includes a new 40,000-square-foot ballroom, a new 30,000-square-foot atrium, expanded exhibition space, more parking and numerous upgrades.
On another note the new 367-room, eight-suite Crowne Plaza Pontchartrain recently opened, which added 4,000 hotel rooms downtown. That will open up more space for events such as the North American International Auto Show. Its organizers are big supporters of Cobo’s renovation and plan to continue holding the show there.
“Cobo Center is independent of the city and is managed and operated by a regional authority, so no funding from the city is needed for Cobo,” said Rod Alberts, executive director of NAIAS. “The NAIAS is also an independent organization and will not be impacted in our operation or funding, although we do work with all the city municipalities in the region, including the City of Detroit, and will continue to do so.”
Alberts says of the show has committed to Cobo through at least 2017. The auto show brings more than $350 million in economic impact to the Southeastern Michigan region each year.
As you might guess, Cobo and the Detroit Metro Convention and Visitors Bureau want more events in Detroit and are busy telling planners the city is open for business.
“I can confidently assure you that Detroit is open for business and thriving more than ever before, despite its financial troubles,” said Larry Alexander, president and CEO of the Bureau in a letter sent to clients. He pointed out private investment in the city will continue to the tune of $11 billion and that the city is investing $1.5 billion over the next 10 years in its police and fire departments.
Downtown Detroit, he said, “continues to be a hub of vibrancy and activity.”