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Cobo Center makeover rolls along with green initiatives, help for those in need and a profit in 2013

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If you’ve driven by Cobo Center recently you’ve seen cranes, workers and lots of orange cones. Ok, it may make it a little difficult to navigate into the parking structures nearby but it’s all heading toward a much anticipated transformed Cobo. The $279 million makeover of Cobo Center should be completed by January 2015. That transformation means more profit and includes green initiatives and getting food to those in need.

The 40,000-square-foot Grand Riverview Ballroom, 30,000-square-foot Atrium, and 21,000 square feet of new meeting space officially opened in September and have seen a steady stream of business.

That steady stream of business plus revenue from parking helped Cobo Center finish its 2013 fiscal year with a profit instead of a $1.5 million loss, according to the Detroit Regional Convention Facility Authority. Operating expenses that were more than $1 million below budget and parking revenue that was much higher than expected.

The Cobo Authority’s original budget forecast a loss of $1.5 million because fewer big shows were booked than the previous year and there would be no revenue from Cobo Arena as it was being transformed into a new ballroom and atrium.

Atwater view west

Atwater view west

The financial signs are good going forward.

Cobo Center is expected to generate nearly 20 percent more operating cash over the next two years while absorbing another $2 million reduction in the subsidy it receives from state taxpayers, according to budgets approved in September by the Detroit Regional Convention Facility Authority.

“We are thrilled that we turned a small profit in a year that we knew would be a difficult transition period for us,” said Patrick Bero, CEO/CFO of the Cobo Authority. “Now it gets fun, with the Grand Riverview Ballroom and Atrium open and bookings up, we’ll see big improvements for the next two years.”

Right now a new kitchen and food court are nearing completion and major construction work has moved to the south side of the building along the Detroit River. Two of the four levels on the south side will be completed by the time the North American International Auto Show opens next month.

Those improvements include the greening of Cobo. Green initiatives can be found everywhere.

  • The glass-enclosed concourse area on the main level and the third floor corridor glass ceiling provides enough natural light during daytime hours to minimize main hallway daytime lighting throughout Cobo Center.
  • Induction lighting delivers an expected 40% reduction in electric usage for lighting.
  • The air conditioning is created by pumping grey water from the Detroit River through chillers that send the cool water to various air handlers. This system uses considerably less electricity than conventional air conditioning units.
  • All main hall lighting and heat/cool settings are computer programmed and managed.
  • There are paper, aluminum can and plastic bottle recycling containers in all office areas and high traffic meeting areas.
  • The escalators are being replaced with energy efficient, Kone EcoMod units and they run on occupancy and event needs.
  • All in-house contractors participate in recycling and Green initiatives.
  • The housekeeping staff uses products that are environmentally safe and non-toxic.
  • All pallets are recycled to a local area vendor.
Ballroom

Ballroom

To be sure green initiatives are on track the Cobo Center Green Committee meets several times monthly to promote sustainability practices and Green initiatives. Members from every department and in-house contracting company are on the committee.

The Cobo team is also committed to helping those in need. Centerplate, exclusive food and beverage contractor, collects prepared food that has not been served for pick up by Forgotten Harvest, a local company that delivers the food to pantries, soup kitchens and shelters throughout Southeastern Michigan.

For those of you who are numbers guys, here’s a quick rundown of how the profit was generated.

Expenses for Cobo Center operations, parking management, and DRCFA administration were a combined $1.1 million lower than what was budgeted for the year. The DRCFA spent $14.5 million rather than $15.6 million on those items.

Parking revenue for Cobo Center finished the year at $3.5 million, more than $617,000 higher than expected. Three factors behind that performance were increased revenue during the North American International Auto Show, more monthly parking contracts and the resumption of the National Hockey League season when its labor dispute ended. The DRCFA anticipated no parking revenue from Detroit Red Wings games at Joe Louis Arena, but the 24 regular-season and six playoff games significantly bolstered revenue.

The five-member DRCFA adopted a $15.8 million operating expense budget for its 2013-14 fiscal year, and $16.1 million for 2014-15.

Now here’s the really good news. The capital improvement program that includes the ballroom, atrium and major upgrades throughout Cobo was 69.2 percent completed this past September. Construction is on track for completion at the end of 2014.

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