OUR OPINION: Next for the Alerus: Pay back Grand Forks's loan
It was music to Grand Forks residents' ears, and a tune that local taxpayers had been waiting a long time to hear:
"The Alerus Center in Grand Forks has experienced a sharp spike in revenue growth the past two years, leading the center to upgrade facilities and consider expansion, according to officials there," Herald staff writer Charly Haley reported last week.
Let's relax and enjoy just a few more bars from that song:
"It's by far the highest retained earnings the Alerus Center has seen since it opened. ... The trend is upward ... (and) last year was the second consecutive year the events center had positive retained earnings."
OK, so it'll never break the Top 40 on the radio. But in Grand Forks, it's a melody that'll always sound darn good.
Congratulations to the Alerus Center's management and to city leaders and staff, whose decisions over the past few years have brought about these very welcome results.
Now, about that loan:
"The Alerus Center still owes about $1 million to the city, which shores up the center's budget in years when the center loses money," according to the story.
Which raises this question: Should the facility use its newfound surplus to pay back the loan, or should the money go to buying land for an expansion some time down the road?
Here's the strategy most residents probably would like to see:
Make repaying the loan the priority. The timeline for that repayment is less urgent; maybe a repayment schedule can be agreed to that also lets the Alerus Center buy the land that it wants.
But a loan is a loan, not a grant by another name. And right now, Grand Forks -- which has supported the Alerus Center through many money-losing years -- would appreciate the payback and the statement that it makes about the center fully honoring its debts.
Here are two more reasons for making sure the money gets repaid:
First, it would set the right precedent, not only for the Alerus Center but also for other city-owned and/or -supported ventures. Grand Forks city leaders don't have to be ruthless about money, but they also shouldn't make a habit of letting creditors take advantage of them.
Second, it would free up the money for the city to use somewhere else. And as the Alerus Center's own success shows, support from the city can make and has made a positive difference for institutions.
As mentioned before in this space, the Alerus Center's purpose is not to make a profit. The Alerus Center's purpose is to give Grand Forks a venue that draws visitors, entertainment, attention and dollars into town.
That said, positive "retained earnings" are a bonus and a very reassuring sign. It's great to see smart managers make the center hum and fully exploit the power of its draw.