Detroit’s Cobo Center, where the North American International Auto Show is held, more than doubled its revenue in the last year, according to the agency that runs it.
The center ended fiscal 2011 on Sept. 30 with $7.6 million of operating revenue compared to $3.6 million in 2010. At the same time, federal and state subsidies dropped 37%, to $12.5 million, according to an audit released by the Detroit Regional Convention Facility Authoritylast week.
“In its second full year of existence, the authority continues to make great strides in improving the operations of Cobo, as evidenced by the numbers presented in this audit report,” Patrick Bero, chief financial officer and chief executive officer of the two-year-old authority, said in a statement.
The state created the authority in 2009 to take over operation from Detroit. It’s in the midst of a $279 million capital plan financed with a $315 million private placement last November. The convention facility special tax revenue bonds were directly placed with Wells Fargo Bank, PNC Bank and JPMorgan Chase in two series, including a $290 million tax-exempt piece.
Officials said they needed to do a short-term private placement because the three tax revenue streams backing the debt will not be available until 2015, which is when an outstanding piece of 2003 bonds matures. They expect to do a long-term financing when the three-year term on the private placement is up.
“Going short-term now allows the authority to borrow at a favorable rate that we can afford until all of our tax funds are available while simultaneously avoiding the capitalized interest,” Bero said.
Proceeds will finance an extensive renovation of the arena.