The recommendations coming out of a task force looking into potential problems at Grand Forks' Alerus Center are largely taking the form of many tweaks rather than wholesale changes to how the city-owned events center does business.
Members of the 13-member task force held their last meeting Thursday night and agreed almost unanimously to adopt the recommendations. City Council member Terry Bjerke, a prominent critic of the building, was the only dissenting vote.
Money issues, one of the reasons the task force was convened, proved the trickiest for it to resolve.
One contentious question was whether the Alerus Center should aim to not use the quarter-percent lodging tax that now serves as a built-in subsidy for its day-to-day operations. Instead, the tax should be used to build a reserve fund.
Had this policy been in place last year, the events center would've had to make $600,000 more than it did, something many task force members agreed was unrealistic.
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Ultimately, the task force agreed that the events center should aim to produce some kind of profit, but with no mention of the tax. Currently, the Alerus Center budgets to break even.
Other issues included how the building is governed by its commission and how often they report to the City Council.
Overall, the task force agreed that the Alerus Center is "among the great community assets of the city of Grand Forks" and that it's had a positive impact on the local economy and the quality of life.
The recommendations now go to the events center commission for review, after which the commission would talk about them with the council.
Economic impact
One of the themes of the long debate over the Alerus Center's financial performance has been the frequent push-and-pull between the goal of not losing money and the goal of bringing in more visitors, who would spend money in the community.
Earlier, the task force spent a great deal of time discussing ways those visitors impact the local economy and answering the charge that many of those visitors would've came anyway. The city has hosted weddings and conferences before the events center was built.
The discovery that an economist had once calculated the economic impact of the building without including the pre-existing events ended that debate. The task force agreed that there was a net positive impact but not that the net impact justified losses at the Alerus Center.
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The events center commission has long used economic impact to try and put the losses into perspective, but it used a formula that included pre-existing events. The argument was and continues to be that some events may lose money but make up for that with more sales tax from visitors going into city coffers. Major concerts in which star performers demand the events center guarantee a certain profit have been examples of this in recent years.
The task force's recommendation that the Alerus Center should stay within budget, meaning at least break even, somewhat countered the argument.
But it also recognized that concerts, as risky as they may be, can be good for the economy. The group recommended that the Alerus Center, before agreeing to a guarantee with a performer, get the council's approval first.
Task force members joked that the council and the Alerus Center could then share both the accolades if a concert did well or the blame if it didn't.
The task force also recommended the council seek a public vote on expanding the use of the three-quarter percent sales tax now dedicated to paying the debt on the building and building improvements. A major goal had been to use money in case the Alerus Center loses more money than budgeted. The city's economic development fund bears that burden now.
But task force Co-chairman Doug Christensen said the main goal now as far as the task force is concerned is to build an endowment fund to pay for future building improvements because the sales tax would end in 2029 when the debt is paid off.
Reach Tran at (701) 780-1248; (800) 477-6572, ext. 248; or send e-mail to ttran@gfherald.com .
