City Hears Proposal for Sports Betting Expansion at Covelli Centre

YOUNGSTOWN, Ohio – Phantom Fireworks is proposing a partnership with the city to construct a 20,000-square-foot addition to Covelli Centre that would include a restaurant and retail sportsbook operation, representatives of the company said Tuesday evening.

“We see this as a stepping stone to further development for the city,” said Michael Podolsky of Phantom Fireworks. “Being able to do this and make it work and hopefully attract more businesses downtown is our long-term goal.”

Podolsky made the presentation before City Council’s Community Planning and Economic Development committee Tuesday. The project entails the construction of a three-story addition to Covelli, Podolsky said.

The first floor would consist of a full-service restaurant and a small betting parlor, he said. The second level would be reserved for a retail sportsbook operation and a separate sports bar, while the third floor would consist of 4,000 square feet and be used for city functions.

Conceptual renderings by Strollo Architects show an outside patio area and a potential for rooftop dining above the restaurant. The third floor would also have another 2,500 square feet of outside space for the city’s use.

Under the proposal, the city would construct the shell of the building, while Phantom Fireworks would bear the costs of building the interior out and then leasing the space from the city, Podolsky said.

He said the entire project would cost approximately $7.5 million. The city’s investment would be $5.5 million to build the addition, while Phantom would spend approximately $1.5 million to $2 million to outfit the first two floors.

Phantom was successful in securing a license for a brick-and-mortar sportsbook after the state of Ohio legalized sports betting in 2022. Podolsky told Council that it would need to establish a temporary betting parlor at Covelli and receive its first bet by June 30 in order to maintain its license.

“We think this would be a great opportunity and location for that sportsbook,” Podolsky said. The restaurant and sportsbook, he added, would be open during the week and weekends, and not just on event days at the Covelli. 

Podolsky emphasized that Phantom Fireworks CEO Bruce Zoldan has had a productive relationship with Covelli. Zoldan owns 50% of the Youngstown Phantoms, the USHL hockey team that plays at Covelli Centre, and the team has extended its lease at the arena. The team also spent $1 million to install new ice chilling equipment at the arena.

Council members, however, had questions related to the cost of the project and whether it would be wise to accrue more debt after the city had just paid off the bond it secured when the arena was first constructed more than 18 years ago.

“It has to make economic sense,” said Councilman Mike Ray, 4th Ward. “This is an idea. There’s a lot to work out.”

Podolsky said at this point, there are no precise numbers related to projected revenues. He did say, however, that the economic driver likely would be the restaurant and not sports betting.

“We see the majority of the income from the restaurant itself,” he said. “The sportsbook would be ancillary income.”

Podolsky said Phantom Fireworks has had time to digest how other sportsbook operations have fared across the state, and concluded that a single sports betting parlor at Covelli wasn’t enough.

“We realized just putting a sportsbook in the arena just wasn’t going to work,” Podolsky said. “The trend has been moving toward these in-arena sportsbook restaurant combinations” that have the capability to draw more patrons downtown. He envisioned this part of the central business district emerging into a type of “arena district” for Youngstown.

Podolsky said the company is working with a restaurateur that has operations in Cleveland and Columbus.

However, city Finance Director Kyle Miasek said a private entity working inside Covelli Centre could jeopardize the city-owned arena’s tax-exempt status. Should the city decide to move forward on the project, it would need some clarification as to whether it places that status at risk.

“There’s some homework we need to do to see if it’s viable from a tax-exemption status for the property,” Ray said. 

There also needs to be additional conversations as to how much the city would recoup in terms of leasing income and revenues from the project, and whether it would be enough to cover any debt issued with the project, Miasek added.

“At the end of the day, is that income – along with the income we would get in rent – going to be able to cover a portion of the required debt service?” he queried.

Plus, Covelli Centre is in need of improvements that have been put off for a number of years, he said.

“Right now, the building generates about $300,000 to $400,000 between operating profits and admission tax,” Miasek said. “The building needs about $6 million worth of repairs that have been postponed because we’ve been paying down the debt service,” he said.

Councilman Julius Oliver, 1st Ward, said although the proposal is “a little scary” considering the arena has just paid off its debt service, he liked the overall premise and wants to learn more.

“I could definitely see the benefit of having this downtown,” he said. “I always say that development brings more development, and maybe this takes us into the second phase,” he said.

Bill Weimer, Phantom Fireworks’ corporate counsel, said the presentation Tuesday was to gauge whether the city is interested in the project. “If there is, then we’ll take the next step.”

Pictured at top: An architectural rendering of the proposed addition to Covelli Centre.

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