Business, Events, Key Data, News, Places, Regional Transformation

Cobo rocks with more upgrades and strong financials

Hi_Res_Cobo_at_Night.jpg compressed

Hi_Res_South_Elevation compressedThe heart of Detroit’s convention, conference and trade show scene, Cobo Center, is beating more life-blood into the community. Despite being in the middle of construction there is no slowing down and its progress and financials show it.

With completion of the final phase of construction scheduled for completion in 2015, Cobo gained much in 2014.

Here’s a quick look at Cobo’s renovation.

  • Reconstruct rooftop parking area to replace concrete, drainage system and parapet, install solar-powered lighting, improve building entrances, and insulate roof. Finish upgrades to HVAC, plumbing, fire protection, electrical, lighting and communications systems. Install additional energy-efficient lighting. (Scheduled for completion October 2014).
  • Redevelop south side of building along the Detroit River to reorganize space and create pre-function areas, new meeting and breakout rooms, two new junior ballrooms, and integrate the space with new Atrium. Create new glass-enclosed exterior wall.
  • Add escalators, elevators and lobbies to access the roof parking, new administration offices, and Atwater Street/Atrium; renovate Atwater Street entrance; add drop-off and turnaround adjacent to Joe Louis Arena. (Level 3 meeting room and corridor renovations completed December 2013; Level 1 and 2 renovations and new restrooms scheduled for completion November 2014)
  • Redevelop east side of building to make its customer space and circulation areas compatible in design with other new parts of Cobo Center. Create more usable space in the main concourse. Consolidate existing food areas with the new Food Court. (Scheduled for completion December 2014 pending event activities)
    Atrium

    Atrium

    Redevelop Michigan Hall to coordinate its appearance with the new Atrium. Install energy-efficient lighting. Update communications infrastructure. (Scheduled for completion December 2014)

  • Redevelop east side of building to make its customer space and circulation areas compatible in design with other new parts of Cobo Center. Create more usable space in the main concourse. Consolidate existing food areas with the new Food Court. Reconfigure current offices as rentable customer space. (Scheduled for completion December 2014 pending event activities)
  • Redevelop east façade, with new exterior skin to improve appearance and energy efficiency. Create lounge seating overlooking main concourse. Install 4,800-square-foot and 2,900-square-foot high-tech “video walls” into a new entrance canopy and north atrium. (North Entrance and video wall are scheduled for completion December 2014; the South Entrance canopy and video wall are scheduled for completion June 2015)

Check out this video on the renovation.

Even with all the construction conventions and conferences flocked to Cobo.

With May to October traditionally being a slow time for the convention center, this year there was a 65% increase in summer events compared to 2013. With 65 events being hosted in June, July and August, June alone almost matched the previous year’s whole summer schedule with 25 events compared to the 26 that made up all of the summer of 2013.

Total event income for June was $589,000, which is 89 percent – well over a quarter million dollars – higher than the $312,000 budgeted. Event income in the year-ago June 2013 was $79,000.

Including other sources of revenue, Cobo’s adjusted gross income for June was $642,000, which beat the budget projection of $378,000 by 70 percent. For the fiscal year through June, event income was $6.8 million, or nearly $800,000 higher than the budgeted $6 million. Last year’s net event income through June was $4.8 million.

Fiscal year adjusted gross income through June was $7.1 million, almost 12 percent better than budgeted. The adjusted gross income through June this year was $2 million, or 32 percent, greater than the $5.1 million in revenue through June last year.

In addition, Cobo breaking may break the $4 million mark in parking revenue for the full fiscal year.

Events like the Society of Manufacturing Engineers “Big M” show, NACE/CARS Expo & Conference, and the Intelligent Transport Systems (ITS) World Congress (previously held in Tokyo) all exceeded expectations. The Big M was 25% was higher than the previous year in Las Vegas and the ITS show reached a whole 80% more than in 2013.

Utility costs were an issue this year. The unusually unforgiving winter caused an increase in the need for heating and snow removal. Things were not helped with the 20% rate increase for steam.  All of this led to $674,000 higher cost in utilities through June over the same period in 2013.

However, efficiencies helped keep the overall expenses down to $144,000 higher than expected. Net income being $591,000 more than planned kept there from being any real dent made by the increase in cost.

Ballroom

Ballroom

Total operating expenses for the year through June were higher than the same period of 2013 by $829,000, or 8.3 percent.

The higher expenses are due to utility costs and the opening and use of the Grand Riverview Ballroom, Atrium, Detroit Made Kitchen food court, and new meeting rooms and office space. These newly added perks drove up the price of operating by $829,000 through June. However, in June the operating costs to drop by 11% in June compared to the previous year.

The net income in June was up by $374,000 compared to the same time one year earlier. Net came up to the pre-June of 2014 rose to $1.1 million.

It’s been a great year at Cobo so far. With the new construction, more should be in store.

 

About the Author

One comment on “Cobo rocks with more upgrades and strong financials

Leave a Reply

Your email address will not be published. Required fields are marked *