PIKEVILLE — The East Kentucky Expo Center is in financial trouble and needs $200,000 in coal severance tax money sooner than Pike County was planning to appropriate it, officials say.
Meanwhile, county officials are urging the state to take over more of the operation costs of the state-owned convention center and arena that opened in 2005.
The arena "is in danger of shutting its doors for good because of lack of funding," Pike Judge-Executive Wayne T. Rutherford wrote in a letter to Gov. Steve Beshear on Nov. 29.
The state ordered the money marked for the Expo Center, said Charles Baird, chairman of the center's board of directors, but the appropriation was low on the Pike Fiscal Court's priority list.
Expo Center officials are asking the fiscal court to make the center a higher priority.
Sen. Ray Jones, D-Pikeville, sent a letter to the court asking that $100,000 be made available now. He said in an interview that the center is running $800,000 in debt, a fact he learned recently.
"We have put the amount of local support in that it was thought they needed," Jones said.
"It may never make money," he said, "but if it keeps running the deficits it does, it may need to operate on a different business model."
The governor appoints the board of directors at the center, and Jones said he would like to see city and county government representation on the board.
The 7,000-seat arena hosts concerts, conventions, and sports events including arena football, high school basketball tournaments, the Pikeville College Bears and a minor-league professional basketball team.
The center is expecting help from a sales tax rebate passed this year for facilities of its size, and it expects $100,000 from the city of Pikeville each year. The board of directors also is considering selling the naming rights for the center to a corporate sponsor.
The sales tax rebate helps only as much as ticket sales and concessions increase, Jones said, and the current recession and some recent canceled shows haven't helped.
The $100,000 grant from the city is contingent on the Expo Center having its water and gas bills paid down by July, City Manager Donovan Blackburn said. This is the first year that hasn't happened, he said.
The center owed the city about $168,000 in gas and water bills as of October. "We're in a pickle because we can't put that utility burden on the customers of the city," Blackburn said.
Baird said the Expo Center owes about $120,000 to its management company SMG, which laid off some staff members this year to cut costs.
The situation isn't dire, and the Expo Center won't close, Baird said. "We've been in the same shape as we are now ever since we've been opened. We always felt we would have a $400,000 to $500,000 deficit," he said.