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	ALERUS CENTER TASK FORCE Thursday, January 7, 2010 - - 5:00 p.m. - - Council Chambers Minutes Present: Gershman, Christensen, Bjerke, Block, Emmons, Glassheim, Hutchison, McNamara, Rygg, Thompson. Gershman called the meeting to order at 5:00 p.m. Motion by Rygg, Second by Emmons, to approve the minutes. Aye: All. Motion carried. 1. Presentation by David Flynn Gershman introduced Dr. David Flynn, Assoc. Prof., UND Economics Dept; Director of the Bureau of Economic Research; and Assoc. Dir. of the Small Business Development Center, who has worked with the Alerus Center on economic impact studies including the Brittney Spears concert and was invited here today to explain the formulas and methods used in preparing his reports. Dr. Flynn stated that he has been involved with two projects at the Alerus Center, the Brittney Spears concert and a project that will be done this year on conference type events and the impact that is having. He continued that he uses a methodology which is pretty standard in the industry and relies on surveys of attendees for data. He explained that they had individuals at the concert which asked people to sign up to participate in a survey which would be emailed to them after the concert. The individuals completed the survey online through Survey Monkey and reported whether they were a Grand Forks resident or not and then what their level of spending was in various categories. Spending was reported in a range, which people tend to respond more readily to than having to report exact numbers. Respondents from Grand Forks were asked to only report spending that was beyond what they would have done had the concert not happened. Respondents from out of the County, all spending data was used. (Block joined the meeting.) Flynn explained that they take the data and determine direct effects, indirect effects and induced effects from the event. Problems with this type of study are that you have to rely on the data that you’re given and there isn’t a way to validate that the people have reported what they actually spent. He continued that typically you want to hit a minimum of 5% and an ideal return is 10% of attendees, and any result between 5-10% is standard. For Brittney Spears had 350 sign up to take the survey. Flynn explained that they had been contacted on a short notice to conduct the study and were not able to get as many workers for the concert or table sign up organized, which would normally be done with this type of survey, so had to have workers walk around and ask people if they would like to sign up. He added that the survey did not include any sales activity from inside the building. Christensen asked whether there was any factor built into the study for funds that left town with the show. Flynn replied that was not part of this study, but that economic impact can be looked at both from positive and negative impacts and any of those could be included in an economic impact study. Hutchison stated that he thinks we’re looking to try and get at what is the overall net effect of an event and whether the result was a positive or negative for the community. Flynn stated that based on the study data that was looked at was a positive impact overall from that concert. The group discussed what factors should be included for future analysis of economic impact and that would like to see a model developed that could assist the Alerus Center in their marketing efforts for the facility, and in particular in discussing events with the media and citizens and also a way to include into the overall facility economic impact the effect that the convention center has on the community. Bakken commented that whether studies are done on events and come out good or bad, does it matter, as the building is here and brings in activities to the community and here to look at the best way to do that. Christensen replied that concern is that the way economic impact has been used in the past has actually hurt perception of the facility and like to look at why we are doing those studies and if we are to continue to use them in a better way. The group discussed that you won’t get everyone to agree, but would like to address some of the skepticism in the community when they hear economic impact and that would like to see the model used adapted to address some of those concerns and get to a point where we are comfortable with the model and understandable to the public. This might include factoring the negative side with its indirect effects as well as including some surveys of the hospitality industry as well as the current method of surveying attendees. Flynn stated that it is a preferable method to also include the hospitality survey information, but with the Spears concert there was not enough time to include that, he also informed the group that using a multiplier for indirect and induced effects is standard with studies. The group discussed that the purpose of the task force is to look at governance of the Alerus Center and to recommend changes to make the facility better and would like to see that studies that are done would be to provide feedback to those both inside and outside the facility on how it is running. There is also a need to look at the benchmarking, communication and public relations efforts. Block stated that at present the communication coming from the facility to the Council, UND and the Community has not been effective and need to look at that as a vital part of the brand that the Alerus Center wants to portray itself. The group asked Dr. Flynn for his recommendation on a model that would accomplish the items discussed today. Dr. Flynn replied that he could construct a model, probably will include attendees, hospitality industry, also internal building activity and other factors as discussed. Christensen stated that if he could bring back a proposal and that this request should be separate from any project requested by the Alerus Center and this would be funded here at the City level. Group comments were that they were looking for numbers that were accurate, credible and straightforward so that they were easily understood by the public. Flynn replied that there will always be some that don’t trust and believe in numbers, no matter how verifiable you data is, but will try to come up with a model that can answer the question that the Task Force has posed. Rygg commented that in looking at some of the comments that were made following the concert by Hyman, it ties back to the management contract where the management company does not take responsibility for a loss on a major concert and think that the way it was handled was a PR nightmare. Emmons agreed and can’t just put out a spreadsheet, but need to keep it simple and if the management company continues to come in with a loss, maybe it is time to look at if there is a better solution. 2. Sales Tax Collections for the Alerus Center Gershman stated that members had received a copy of a spreadsheet form the Alerus Center with details on sales tax collected on sales within the building and in looking at it, found it interesting that are generating about 18% of the amount that has been advanced to them. Bjerke stated that he believe that to make that statement need to look only at that part that would not have taken place anyway, even without the building. The group discussed that this comes back again to benchmarks for the facility and ways to quantify the contribution that they make and to perhaps have a rebuttal for some of the same negative comments that keep surfacing from citizens. A suggestion was to do a better job with the pr aspect and not oversell events and to only provide information that you can back up and also need to be careful to not undersell the facility and its impacts. One area that generates comments is in determining what events to use for attendance as if you say weddings, people say there have always been weddings but they would have just been somewhere else, and same with football, and need to look at how to report this or measure the incremental increases generated by the Alerus to counter those arguments. Most agreed that concerts and conventions don’t have as much controversy on how much of their attendance to include. McNamara commented that the goal is to leave the Alerus Center with a system that will allow them to tell the great story that is happening in the facility and to take away what the people pick at. The group discussed that it will be good to see the model that Dr. Flynn brings back to the Task Force and that there have been things done and said in the past that have left many disillusioned and would like to see steps taken to repair some of that. The group discussed that part of addressing the governance issue is also to provide some management expectations, which will include a recommendation for improvement in the public relations and looking to find an effective spokesperson for the facility. 3. Review Minutes from Prior Task Force Meetings to develop “Potentially Agreed Upon Items” Christensen stated that would like to try and start putting together a list of the items that seem to have a consensus from the Task Force. Items as discussed were: 1) lack of legal review. City Attorney should be included on contracts and negotiations. 2) minute taking. There is not enough information included in the minutes to satisfy any challenge to decisions that are made. 3) transparency of minutes. Minutes should be posted on the internet and more readily available to those that wish to read them. 4) Simpler reporting. Reporting of financial information needs improvement. Enough detail should be provided in information communicated to the board so that they can analyze it and be comfortable with decisions that are being made. Information should be presented in a way that is easy to understand for non-professional finance individuals that review the information. 5) There is a loss of credibility of management and a need for public relations efforts to boost the branding of the facility. 6) Advertising of events. Need to take a look at what is done and where it’s placed to get the best return on the investment and perhaps need to contract with a professional to get maximum benefit. Future discussion item suggestions: 1) Should there be free events at the Alerus Center? 2) Public Relations needs of the facility. Someone with good public relations skills should be the front person for the facility and should be responsible for receiving and responding to requests for information, as well as providing information on events at the facility. Keeping in mind budget concerns, may not mean adding a new person, but training and utilizing someone on staff to better manage and deliver the information. 3) Commission – Should there be term limits? Are we happy with the structure that is currently in place? Should the number or source of membership be changed? Should commissioners be appointed to the board taking into consideration their professional and personal background which could benefit the Alerus Center? 4) Discuss Council oversight – what is role of each body and put to rest the idea of whether Council should run the facility directly. Venuworks contract – Need to review the responsibilities and expectations in the contract and make sure that it is reviewed by the City Attorney and decide if that is something that should also come to Council for review and approval after the Commission as a part of the Council oversight. Should there be a change made in this contract so that they share in the loss on major concerts like they do in other events? 5) Survey suiteholders and advertisers to get their feedback on the facility and expectations. 6) Make a part of the system an annual meeting to talk about the strategy for the upcoming year. 7) Talk about ways to increase revenue for the facility. Consensus seems to be that some mix of large and small events may be appropriate for the facility, but need to look at the process used to arrive at the mix. Look at the value of bringing in some events that this is the only venue that can support it and decide if that benefit is greater to the community, even with an event loss, than not offering the event at all in the community. Determine a method to measure risk/reward for events and when looking at one with potential for major loss that feel is beneficial, what is process to bring to City Council so they are prepared for a potential need for financial support related to the event. Should they use a professional to look at a market analysis as part of the risk evaluation for an event so that they bring in events that fit what our market is looking for? This review could also include a look at cost control and compare with other similar facilities to see if there are ways to do things better and smarter than we currently do. Are there too many “managers” at the facility and should there be a restructuring, which may improve costs in the labor area? The group discussed that next week’s meeting will be to receive public input and press release will be put out to encourage the public to attend and share their thoughts and concerns with the Task Force. Meeting adjourned at 7:05 p.m. Respectfully submitted, Sherie Lundmark Admin Spec Sr.