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Tuesday, August 29, 2006

Alerus Center budget, some other dull matters and one thing that will shock you at first

Note: This is another long one. I'm kinda burnt out so it's hard to write short.

What a let down. The City Beat made it to the Alerus Center today at 7:20 a.m. to hear the events center commission discuss its deficit budget with the City Council.

Two council members showed up. That was Curt Kreun, who's a member of the commission, and Council President Hal Gershman, who advocated for the Alerus Center back when he was a private citizen.

(The meeting was announced Monday afternoon so I suspect council members might not have had enough time to change their schedule. Eliot Glassheim, for example, had to be in Bismarck and Doug Christensen was scheduled to be in Fargo all week.)

Man, 7:20 a.m. is like the middle of the night when you have to report on the council meeting the night before and attend another council meeting on the side. So I was hoping for some excitement.

No cigar.

It was deadly dull except for that news about UND football looking for a new stadium. (Hahaha. Wipe the coffee from the computer screen. It's more like a wish list item. I'll talk about it below.)

Anyway, commission chairman Randy Newman reported that, yes, the budget calls for $141,000 loss and that's the fault of higher electric rates. And the center simply can't earn more revenue to offset that in a year, he said.

Curt and Hal didn't say much about that other than making some light suggestions. There wasn't a single decent quote to be found. No coherent overarching narrative. No central idea around which to build a lead paragraph.

It was so dull, I'm just going to do a bullet list:

* Remember when the Alerus Center Commission adopted the deficit budget in July? It was a fest of self-flagellation. They wanted to break even, but they couldn't and they wrung their hands over it. One of them, Brian Conneran, voted "no" because he thought labor costs were too high.

This time around, talking to council members, they were defensive. Hey, we might lose $140,000, one said, but the Civic Auditorium, which the Alerus Center replaced, used to lose $240,000 to $250,000 a year. Another reminded the council members of the humongo economic impact the center makes each year and the deficit pales in comparison. A UND study in April found the center brought $12.6 million in new economic activities to town.

* Most of the talk was about strategic issues, such as the ongoing contract negotiation with the Alerus Center's biggest tenant. UND wants something like $400,000 in improvements as it prepares to go to Division I. The center wants a really long contract not those itty-bitty three-year ones.

Then the discussion started to sound weird.

Randy was talking about how the "the center is a short-term solution to their (UND) long-term needs."

Commissioner Phil Harmeson, whose day job is as associate to the university president, said "we don't have a problem with the Alerus" but are doing really long-term planning.

Randy added that "15 to 20 years from now, football may not be part of the Alerus Center."

What??

Phil explained that to get to UND's goal of being a major football powerhouse, it has to go to Division IA, the top of Division I. To do that, it has to average 15,000 attendees a game and to average that much, Harmeson said UND would need 30,000 to 40,000 at major games to make up for lower attendance at minor games. Right now, the center maxes out at 13,500, so there's no way that's gonna happen.

Hal thought maybe the city could modify the Alerus Center to add more seats. Maybe, "blow up the top of the building." Boy does that sound expensive.

* The other strategic issue is catering. Canad Inns had expressed interest in taking over and that's got the Alerus Center people freaking out. Catering is 20 percent of their revenue and the only part of the revenue that's really, really healthy.

I called a local Canad Inns official who, by company policy, can't be named. The poor guy went on the record and then heard from the bosses that that's a no-no, so I let him stay anonymous. Usually if they talk in public I ignore the policy and I'd do that here but the info I wanted didn't warrant it.

Anyway, my mole inside Canad said, yes, Canad intends to put in a proposal for it since the company will have food service at the hotel and the restaurants. Then he called back and clarified that Canad wants to be a good neighbor and wouldn't submit a proposal unless it was asked to. I told him that's just as well because Randy said he doesn't want to even negotiate that.

On a side note 1

The mole said Leo Ledohowski wants the hotel opened as early as late March 2007. The water park should open sometime after that but there's no clear timeframe yet.

On a side note 2

The city public information department either has to get its act together or city departments have got to tell them about meetings earlier.

The Alerus Center Commission meeting still wasn't on the weekly meeting list as of 9:52 a.m. Tuesday. That's about an hour after it was over.

I knew about the meeting because the Herald got a fax from the Alerus Center at 2:08 p.m. yesterday. But that doesn't help members of the public, who deserve to know even if none of them show up for these meetings.

14 Comments:

Anonymous Anonymous said...

The Alerus receives a $360,000-$400,000 dollar tax donation that they count as "revenue". Someone needs to explain to these people that the old civic center arguement doesn't work. 200K loss, plus the 400K, puts the center at a 600K loss at the end of next year. Lovely.

Did they gloat about how well they're doing at competing with the private sector for weddings, banquets, and meetings at this meeting?

11:35 PM  
Anonymous Anonymous said...

Interesting. UND has no idea where it's going to get the extra millions needed to go D IAA in football, and they're already looking ahead to D IA with, presumably, the added expense of a new stadium. Maybe they should follow Tom Dennis' advice and eliminate the "luxury" of their Liberal Arts programs.

7:21 AM  
Anonymous Anonymous said...

I think UND is dreaming. They can't fill the Alerus now. They get what, 8000 at a game. Come on people. I don't think we'll ever see the day football draws 25,000 in Grand Forks. There are ways they can add some additional seating. But this was a ridiculous statement by UND.

7:42 AM  
Anonymous Anonymous said...

The city should sell the money pit to UND and restore catering to the private sector.

1:52 PM  
Blogger Tu-Uyen said...

So how is the $140,000 loss made up? Do they get a check from the city.

They get it from their sales tax revenue. The 2006 budget says revenue sources are $6.5m from general sales tax and $3.5m from operating revenue.

If you look at expenses, you'll see that operational costs are only $3.9m. Capital outlays (equipment and repairs) is $600k and debt service is $4.9m.

That leaves $636k sitting around in case they lose more money than they planned and, with the too-optimistic budget for this year, that's probably the case. Though losses would probably be in the $250k to $300k range, if past performance is anything to go by.

4:23 PM  
Anonymous Anonymous said...

Whatever happened to the..."Randy Newman I'm Gonna Save This Property By Booking Loverboy and BTO Concert Promotions Fund"?

Just wondering.

5:13 PM  
Anonymous Anonymous said...

Small wonder the Business School rejoiced when he got kicked upstairs.

4:48 PM  
Blogger Tu-Uyen said...

UND as a Division I school? Come the bleep on!?! They're barely a Division IAA school and they're making that jump.

We're talking about a multi-decade timeframe, here. You're that confident things will stay exactly as they are in 20, 40 years?

5:01 PM  
Anonymous Anonymous said...

"You're that confident things will stay exactly as they are in 20, 40 years?"

I'm not. I'm betting 40 years from now there will be no UND.

5:55 PM  
Blogger Tu-Uyen said...

Why's that? Will there still be a Grand Forks even?

6:11 PM  
Anonymous Anonymous said...

"Why's that?"

35 years from now, ND high school graduates will be a trickle. With perhaps 90-95% of UND students as out staters, there will begin a movement of the xenophobic Nodakers, the majority of whom are over 65, to protest their tax money going educate "foreigners." The Legislature will pick up on this, and appropriate less money for the two universities left. With faculty salaries 60% below the national average, teachers leave and new ones cannot be hired. In 40 years UND is an empty shell as an institution of higher ed. It has truly become a research center where students are just inconveniences. So it is closed down as a university.

6:29 PM  
Anonymous Anonymous said...

"Will there still be a Grand Forks even?"

Yes, but a very different one. The Air Force base will have been closed, the university too. GF will be inhabited by Nodakers, the majority over 60 years of age, whose kids visit once every summer, and are glad they moved out.

6:34 PM  
Anonymous Anonymous said...

EC99
It's called the Stader Center...it is on the south edge of Grand Forks near 47th Avenue South and South Washington...you really should go check it out!

7:25 PM  
Anonymous Anonymous said...

"It's called the Stader Center"

I have no idea what that is. Will it be here in 40 years?

8:31 PM  

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