Committee Minutes

ALERUS CENTER TASK FORCE
Thursday, January 14, 2010 - - 5:00 p.m. - - Council Chambers
Minutes

Present: Christensen, Bjerke, Emmons, Hafner, Hutchison, McNamara, Rygg, Thompson.

Absent: Gershman, Kreun, Block, Bakken, Glassheim.

Christensen called the meeting to order at 5:00 p.m.

1. Public Input

Christensen opened the floor for comments from the public.

Earl Strinden, 1084 Oxbow Court, provided some history on the creation of the Alerus Center based on his experience as a member of the Committee that worked on the campaign to approve the sales tax measure to fund the project. He commented that during that campaign the committee had not marketed that the facility would breakeven or make money, but that it would enhance the amenities and serve a need in the community that the current Civic Auditorium was not filling. He provided further information on the arena industry drawing on his experience from the time he managed the Ralph Engelstad Arena. He cited that in reviewing contracts for large concerts, they are often one-sided, with all the risk on the venue and as such he had decided to not bring in any that were not already under contract during his tenure at the facility. He commented that he had found it was rare for public facilities to make money and their main function is to help the community. He encouraged the Task Force to make a determination on the means and level of risk that would be acceptable for events and then to go forward in a manner that positively promotes the facility in the community. He also encouraged that those speaking for the facility should always tell the truth and not put forth information that would give the appearance of couching or hiding information or that would destroy public trust and confidence in the facility and its staff.

Barry Wilfhart, President Chamber of Commerce, shared a statement expressing support for the facility and encouraging that once the process has been reviewed and any changes implemented, that everyone work together to enhance not only the facility, but our community and the positive amenities that we have to offer.

Jerry Waletzko, 5041 West Elm Court, shared a letter with the Task Force that encouraged development around the Alerus Center as a means to assist the facility in being more successful. He suggested that perhaps some of the sales tax collections from the ¾ % tax be used as a funding source for upgrading infrastructure in the area rather than special assessing those infrastructure projects to area properties, which would benefit both development in the area and current taxpayers, many of whom use those roads to get to the Alerus Center for events and would show a positive benefit from the tax to all taxpayers to use for that purpose.

Paul Robson, Consultant for Canad Inns and Antonio Rossini, General Manager of Canad Inns Grand Forks, introduced themselves and provided information on their background and community connection. Robson explained that the success of the Alerus Center is a vital concern for the Canad and have a joint interest in seeing the facility be as full and successful as possible. He shared three suggestions with the Task Force:

1) that the facility formulate an events acquisition strategy that will involve all interested parties in the scheduling of events for the facility. He suggested that some potential parties that should be involved in the process for event scheduling were Alerus Center staff, Canad, CVB, hotel industry and perhaps other stakeholders in the community depending on the event). He continued that by including all these groups up front, they can work together to enhance what each can bring to the table to make the event successful and could also quantify the event for the public.

2) that a risk assessment and evaluation tool be developed for events that would also include key stakeholders.

3) stated that the success of the Alerus Center is vital to the community and quality of life for residents, also for the success and future growth of the Canad. He continued that they would also entertain an on opportunity to assist in a direct operational role at the Alerus Center. He explained that they have similar facilities in other communities and used the Brandon, MB location as an example.

The Task Force asked for input from Canad on the current relationship with the Alerus Center for events. Robson replied that there are some things that could be a little better, but are working on the relationship to improve it. He added that should an event acquisition strategy as suggested be implemented it would address any concerns that currently exist in the process and could help share the burden of bringing in a large event by allowing all stakeholders to be involved.

The Task Force expressed an interest in getting more information on the strategy suggested as well as on the Brandon, MB Canad location. Bjerke commented that one concern that has been expressed by conventions is some additional charges that may come up because of the facilities being separate and when book at some hotels get meeting room free if x number of hotel rooms are booked or some similar deal and not able to do that with our facility and need to look at if there are ways to make the convention experience better and more seamless to really compete. Rossini commented that may be some of the instances where the current setup could be made better and cited examples from his prior work experience where hotels actually were able to book events into the municipal owned event center and seemed to work better and also included the CVB in the process. Robson explained the Canad philosophy is to satisfy the customer and don’t want to lose business and do it profitably and need a coordinated effort to achieve that. He continued that part of that process is also to look at what events we are not in the rotation to get and seeing what steps need to be taken to get us included and then stay in.

Hutchison asked whether Canad had a representative on the Commission. Christensen stated that they do not. The Task Force discussed that while the two entities do work together there are steps that could be taken to improve communication in the current setup. Robson shared that with their Brandon location they actually sell right into the event center and their sales staff has access to the calendar for the facility. Rossini stated that was similar for the other venues that he has worked at and is something that we don’t have with our current setup and has been problem when people looking to book an event call Canad doesn’t know Alerus’s availability and vice versa so have to refer the people to someone else and may be losing some people due to the need for multiple contacts.

Rygg stated that the CVB is aware of some of the items discussed and in the case of the meeting room issue, has offered a monetary assistance to get some events to come in and being able to offer a coordinated package would be an improvement. She stated that the quality of our facility is impressive to those that come here and need to work on some of these issues to improve future events. Christensen stated that have discussed previously that it is important to cross market and is interested to see more information on the process that Canad described.


2. Preliminary Discussion of Structure of Commission or Committee of Council.

The group discussed whether this item should be held until full task force was in attendance. Consensus was to begin the discussion.

The Task Force discussed whether the Commission should be asked for their input. Emmons stated that he feels it is important to hear their perspective as to the current system as part of looking at what changes could be made to improve the process. Thompson expressed that it was interesting that none of the commissioners or Venuworks staff had come to any of these meetings. The group discussed that it would have helped discussion to have staff and/or commission representation at the meetings and could have provided information on parts of the process now that members of the Task Force are not familiar with and have had questions or concerns about. Consensus was that they would like to have information and input from the Commission and to invite the full Commission to attend the next Task Force meeting.

Christensen commented that it was suggested that there be more communication and collaboration between the Alerus Center and the Canad and is glad to hear that the Canad is open to that and believes that is something that should be directed.

Bjerke shared some comments on the facility. He stated that he believes that if you don’t have a goal to make a profit or break even, you won’t and need to change that goal setting process and cited that the Fargodome in our region does make money. He encouraged the group to consider the infrastructure issue and he has brought this up in the past, but Council was not receptive and like to see that given more consideration. He believes that we should look at the pricing structure used for events, as may be some opportunity to improve profitability if tickets were priced differently based on location, not all general admission.

Hutchison brought up the need for the underpass on 42nd at the railroad crossing and that would help traffic flow on 42nd Street particularly after events. Christensen explained that the project is higher cost and there was hope of getting some federal funding, but there is no firm time on when or if that will happen. At present the State has chosen to replace and improve the underpass on South Washington Street instead. The group discussed that also need to keep in mind a possibility that when the 10 year contract with UND for football is up they may decide to not recontract and should have stakeholders meeting to work on this and have continued follow-up with leadership.

Bjerke stated that there is a CIP for the Alerus Center for capital goods, but not for infrastructure improvement needs around the building and believe that should be included, as that is how you get the people there and home again and are able to use the ¾ % tax for those needs and should look at that. He also cited some examples of some smaller items that have been charged to capital, like vests, which could be considered an operating item and another case where you do things that could give you a black eye. Jerath explained that while those items are smaller dollar amount, they are anticipated to be in use at the facility for several years and as such qualify to be treated as a capital item.

Bjerke asked about the level of research was done on Venuworks prior to recontracting with them, and shared a handout which he printed from the internet and cites other Venuworks facilities that also have similar issues to the ones we are experiencing. McNamara commented that he believes that as Mr. Strinden stated today, you may not be able to get to the profit, but we need to look at how we treat the ¼ % collections and also, do we have concerts and if so, look at some parameters so we don’t go too far.

McNamara continued that we also need to address the issue of “2 entities connected by a hallway” and make that relationship more seamless going forward. Christensen stated that we need to look at the status quo and evaluate what works and what doesn’t and also to look at the purpose of the Commission and what our expectations of them are.

Emmons stated that he had looked at the Alerus Center website and the calendar and it seems very light and wondered if there are other activities that also take place there that aren’t listed. Rygg stated that there are a lot of smaller private events that take place there that they maybe don’t post on website. Emmons commented that when you list 23 or 24 full time employees, may need to list more to justify why you have that size staff and show the public how busy it is.

Christensen commented that it comes back to we pay a management company a fee each month to run the facility and need to look at what we are getting for that fee and if it’s worth it, as there are other facilities in our state that achieve just as much without the management company, for example the Bismarck Civic Center, where their manager Charlie Jeske is doing same thing on his own. He continued that not saying we have to make a change, but want all those managers to feel the stress that they need to perform and show that we are getting something for the extra fee that we pay and we won’t continue with status quo if can’t justify it’s worth it.

Meeting adjourned at 6:50 p.m.

Respectfully submitted,
Sherie Lundmark
Admin Spec Sr.