Officials are scrambling to find ways to cover an operating deficit at the David L. Lawrence Convention Center after getting only half of the $2 million they requested from the Allegheny Regional Asset District board.
Mary Conturo, executive director of the city-Allegheny County Sports & Exhibition Authority, which owns the center, said yesterday officials are considering a "variety of things" to make up for the shortfall.
Among them are a possible debt restructuring and finding ways to save on maintenance.
The authority had requested $2 million from the RAD board to help cover the convention center's chronic operating deficit, caused in part by charging below-market rents to attract conventions and tourists in a hotly competitive environment.
But the RAD board, facing a possible decrease next year in the sales tax revenue that constitutes the bulk of its funding, cut the amount to $1 million in the 2009 preliminary budget it unveiled earlier this week.
Given the current financial turmoil on Wall Street, Ms. Conturo acknowledged that it might be difficult to restructure debt.
"Times certainly are uncertain, aren't they?" she said. "Certainly, this isn't the best time to be doing anything with respect to lenders or financings or even capital projects for that matter."
She did not know if the authority would ask the regional asset district board to reconsider the cut at a public hearing scheduled Oct. 27.
The authority estimates that convention center expenditures will outpace revenues by about $3.8 million next year. It will be receiving $1.7 million in state slots revenues to help cover the deficit, but Ms. Conturo has said that won't be enough to eliminate it.
It also is expected to get another $1.7 million in state slots funding to help pay off a $20 million loan obtained in 2004 in large part to complete work at the convention center.
But Ms. Conturo said the authority expected to receive a lump sum of $20 million to pay off the loan, not installments. With the installments, it will still be facing interest costs on the loan which will only add to the funding shortfall, she said.
The authority hopes to find a solution before passing a 2009 budget before the end of the year.
