An Alerus Center balancing act
On any given weekend, Grand Forks' Alerus Center can either host a convention that's got a decent chance of earning a profit or it can take a chance on a concert -- assuming one is available for this area -- and face a decent chance of losing money.
That's the balancing act officials at the city-owned events center laid out to the City Council and the task force formed to review the building's performance.
The group met Wednesday so the Alerus Center Commission could respond formally to the task force's recommendations, which include re-examining its business plan and not losing money.
Commission Chairman Randy Newman and Alerus Center Executive Director Steve Hyman noted that, besides concerts, there are community events, such as the upcoming Easter egg hunt and graduations, that don't do much for the bottom line, either.
Newman reminded the audience that, back in the 1990s, voters rejected the proposed convention center until an arena was added. "I was told all the time: 'I don't take my family to a convention. I do take my family to an arena event.'"
Today, though, one of the main issues that triggered the formation of the task force is the continued financial losses at the Alerus Center, some of which are attributable to major concerts.
Council members did not question the way events center officials framed the issue, though it doesn't appear anyone is ready to conclude that it's OK to lose money if there are good concerts or if no losses are acceptable, even if the building doesn't land any more concerts.
Present Wednesday were council Vice President Eliot Glassheim and council members Art Bakken; Doug Christensen, who co-chaired the task force; and Curt Kreun, who sits on the commission. Mayor Mike Brown was also present.
Glassheim said he expects that the public discussion over this will continue for some time. "The public will be in a position to say 'Do we just want to break even, or do we want to have concerts?' "
How that discussion occurs is the question, Glassheim said.
Christensen didn't take a stance on the tension between profits and concerts. Instead, he urged the Alerus Center to focus on the smaller concerts that aren't as risky.
He asked the commission to review the building's mission statement to reflect the tougher economic conditions it now faces.
The mission statement is this: "The mission statement of the Alerus Center is to provide premier entertainment and events that stimulate economic impact and improve the quality of life for Grand Forks area citizens." None of that appears to be in question by the council or the task force.
Glassheim said the economic impact will be key, especially after UND economist David Flynn completes his study, which would look at the impact of new events that the Alerus Center brings to town.
The point of the study is to find out how much the economy grows and how much more in taxes the city collects when outside visitors come to Grand Forks for a major concert.
Knowing that impact, Glassheim said, should help the council decide what kind of risks the city could afford on a major concert.
One of the task force recommendations is that any major concert in which the Alerus Center has to guarantee a significant amount of revenue to promoters -- if the promoters don't make a certain amount, the city will pay them the difference -- will go before the council for approval.
"We're extremely pleased that the council wants to share that decision with us, believe us," Newman said.
That addresses only the political challenge. The business challenge is trying to make a profit from a tough concert industry.
Steve Peters, the owner of VenuWorks, the firm contracted to run the Alerus Center for the city, said it's harder now than it was when the building opened nine years ago. At the time, Live Nation, one of two major concert promoters, had a booking office in the Twin Cities and VenuWorks had a relationship with that office, he said, which is how Cher came to Grand Forks.
With more than 20,000 in attendance, that was the biggest concert the city's ever had.
Today, the booking office is gone, Peters said. There's much stronger competition from neighboring cities as Winnipeg opened the MTS Centre, and the Fargodome is more aggressive, he said.
Not too many promoters are willing to bypass those bigger markets and go to a smaller market such as Grand Forks, he said. "It's about relearning our place in the marketplace."
Worse, the concert attendance record in Grand Forks is not so hot, with lower than expected numbers at such concerts as Black-Eyed Peas and Britney Spears, he said.
"Our patrons have voted with their feet," Newman said.
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