Grand Forks' Alerus Center on track to profits after years of lossAfter ending $135,000 in the red last year, earnings of almost $500,000 in this year to date have put Grand Forks’ Alerus Center on track to stay in the black.
By: Brandi Jewett, Grand Forks Herald
After ending $135,000 in the red last year, earnings of almost $500,000 in this year to date have put Grand Forks’ Alerus Center on track to stay in the black.
As of Oct. 31, the city-owned events center posted $485,894 in earnings — almost $840,000 if you include the hospitality tax revenue dedicated to the building.
Executive Director Cheryl Swanson credits the profit to the facility hosting more events, seeing more repeat customers and putting greater focus on conferences and conventions instead of concerts.
“There’s more risk involved in a concert than a conference,” she said.
Earnings could still change as November numbers are not included in the report and more annual expenses are set to come due during December, according to Darryl Jorgenson, the center’s finance manager.
As of Oct. 31, the Alerus Center reported $3.8 million in revenues, not including the hospitality tax, and $3.3 million in expenses.
Attendance at the Alerus Center’s events also is slightly up from last year, according to Swanson. More than 212,900 people have visited the building for events as of November this year. In comparison, the attendance total for 2011 was 212,782.
“The attendance varies so much from year to year,” Swanson said. “I would say this year is about average.”
Total attendance for the Alerus Center since 2001 is 3,440,891 people.
Hard to predict
When center staff members produced the 2012 budget, they projected a $20,000 loss for the year. Instead, revenues were 22 percent higher than expected.
“If there was ever a time to be wrong, this is one of those times,” Jorgenson said.
Predicting the revenues and expenses for the Alerus Center isn’t an exact science, according to Swanson. Its budgets are created based on the number of events that have already booked for the year and attendance numbers from previous years.
The Alerus Center then presents the budget to the Events Center Commission and City Council for approval each year.
“You could have an event book or cancel after you’ve submitted the budget to the commission,” Swanson said.
The type of events also can affect the budget. Some events such as the state Democratic Convention the facility hosted this year occurs every four years. Other events may move around North Dakota to different events centers each year.
“Business at a venue like Alerus Center can fluctuate dramatically monthly, quarterly or even annually,” Swanson said.
Earnings add up
If this year’s profit remains intact, it could mean good news for the Alerus Center’s retained earnings — the total amount of money the center has made since opening in 2001.
This year’s profit, including the hospitality tax, puts the Alerus Center’s retained earnings at about $329,000, rescuing it from $500,000 in negative earnings.
Of the last 11 years, only four other years recorded positive earnings.
Events center staff would prefer not to spend the profit, but rather place it in an operations reserve fund, Swanson said.
As for next year, staff members are predicting a modest $50,000 profit for the facility.
The 2013 budget projects $4 million in revenue and $4.4 million in expenses. That puts the operation at a $387,000 deficit, but the inclusion of the hospitality tax results in the $50,000 profit.
Call Jewett at (701) 780-1108; (800) 477-6572, ext. 1108; or send email to email@example.com.