By AMANDA KIMBLE
TheFlashToday.com
STEPHENVILLE (January 9, 2017) – As local business leaders and community members prepare to gather Tuesday for a Public Events Center Summit, The Flash has looked at other nearby facilities.
Meeting details are at the end of this story.
Somervell County operates an expo center, which the county auditor calls a drain on county coffers. Meanwhile, the city of Granbury offers a luxurious venue with the budget showing more costs than money made.
But, it is also clear business leaders in both nearby communities share an idea posed by business leaders in Stephenville and across Erath County – it costs money to make money.
The only remaining question: Will the public agree to investing in a facility to hopefully attract visitors and boost business at local shops and eateries worth the investment?
Insight from a Somervell County official
The Somervell County Expo Center offers event organizers a livestock arena, show barn and exhibit hall under one roof. It’s one example of a government-run business that requires taxpayer monies to stay afloat.
“For us, it’s a money losing situation, Somevell County Expo Center has never made money,” Somervell County Auditor Brian Watts said, adding county officials have always understood the economic impact and the facility’s ability to attract visitors to the county and customers for local businesses.
“The county has always been a team player wanting to build up that economic impact for both the county and city,” Watts added.
But the constant question for Somervell County if how much longer the can continue to maintain a business on public tax funds.
“Historically, the county has subsidized the expo from a high of about $900,000 to an average of $500,000 to $600,000,” Watts said, explaining that the $65,000 subsidy allocated for the current fiscal year was spent in the first quarter. “The chance of us having to go back to the (commissioners) court and revisit the budget is highly probable. We won’t just turn off the lights and stop paying the bills.”
Last year, almost $409,000 was transferred from the county’s general fund for expo operations.
Looking at the current year, Watts said efforts to reduce the strain – on the Soemrvell County budget and taxpayers – led to a decrease in the expo director’s salary, the elimination of an administrative/maintenance position and other cuts.
While he continues to work on addressing fiscal issues at the expo – he previously helped cut losses at the county-run Squaw Valley Golf Course – Watts has a strong opinion about government’s function.
“It has always been my principal, my conviction, that government should not be involved in private enterprise,” he said. “It should be about governing and only providing services when they are in citizens’ best interest.”
He maintaining a public water supply and sanitary sewer system to prevent competing providers from price gouging citizens while providing a vital resource and maintaining government-run law enforcement agencies should be among the few businesses run by government.
“Those are the sort of things we would not want to privatize,” Watts said, adding golf courses, amphitheaters and expo centers should be private enterprises. “Government is built for comfort and not speed, and when it comes to business, managers and decision makers need to be able to react quickly to remain competitive.”
He also said it’s common knowledge that in government, budget planning and financial decisions sometimes takes days, weeks, months or even years – depending upon the size and scope of the project.
“I inherited these businesses, the golf course and expo center, and we will continue to run them best we can,” Watts said. “But, if someone wanted to take over, come in and purchase the facilities, I assure you the (commissioners) court would entertain the option.”
For event organizers seeking out a facility that offers attendees the perks of a tourism friendly community, Glen Rose and Somervell County offer an array of dining options, as well as a state park, a wildlife preserve and other attractions.
A glimpse at Somervell County event funding
According to the Somervell County budget, the public events enterprise fund includes proposed expo-related revenue of almost $765,000 in 2017. That compares to more than $800,000 in 2016.
While the Stephenville Events Center Core Committee recently announced it hasn’t included an arena in discussions about the proposed local facility, the Somervell County budget shows the expo center to derive the majority of its income from arena-centered events and related products and services.
In 2016, building rental and furniture and equipment rental totaled close to $202,000 whereas stall and panel rental and revenue from shavings to line the stall floors brought in almost $337,000. Somervell County also collects about $35,000 from arena advertising sponsorships.
Watts said the county offers an incentive to attract large equine event, which tends to skew the numbers – and boost revenue. He said also makes the expo center attractive to event organizers as it takes facility funding from the pockets of individual competitors rather than organizers’ budgets.
Per the rate schedule, the main arena is rented at a rate of $1,500 per day, with equine events associations and organizations getting free use of the arena with the rental of 200 horse stall per day. Stalls are available for $25 per day, which equates to $5,000 per day per event. There’s also a 50-percent arena rental discount for horse shows with 100 stall rentals.
“We will give up the rent for the individual transactions, but I assure you, not giving away anything for free,” Watts said.
The show barn is available for $1,000, with the same 200 stall rental provision.
The exhibit hall, which hosts everything from weddings and banquets to contests, competitions and dances, is $400 for nonprofits and has a $500 commercial rate with a $75 fee for every hour after midnight.
The budget also estimates expenditures of more than $820,000 this year. During budget planning, officials also omitted line-item funding for travel, promotion, advertising and longevity pay – in addition to the aforementioned salary cut for the expo director and position elimination.
Granbury Resort and Conference Center
A 20,000 square-foot facility, the Granbury Resort and Conference Center is another example of a government-run facility. According to Visit Granbury, the conference center, which is owned and operated by the city of Granbury, can be divided into as many as 10 smaller spaces to accommodate the needs of event organizers.
The water-front conference center overlooks Lake Granbury and offers a boardwalk and a white sand beach. It sits just blocks from the historic downtown square, giving added selling points that include an array of shopping, dining and entertainment options.
The facility includes banquet and meeting space with audio-visual services, internet access and more. It operates year-round, hosting business meetings, conferences, banquets, training seminars, weddings, reunions, community gatherings and other events.
The nine-person staff at the facility includes a conference center manager, assistant manager/information technology professional, three group service technicians, a custodian and three part-time trolley drivers/bartenders.
The 2016-17 budget for the city of Granbury incudes proposed revenues of almost $451,700 and actual revenue for 2015-16 totaling $418,100.
The detailed income statement for the last fiscal year shows the greatest sources of revenue being facility rental revenue of $200,000, followed by catering at $150,000; alcoholic beverage income of $35,000; and service/use fees at $20,000.
According to a facility rental brochure, Lake Granbury Ballroom rates begins at $1,200 per day for the entire facility, or from $150 to $300 per room for a smaller space. Boardrooms and an upstairs ballroom rates start at $325.
Meanwhile, the city of Granbury expects to allocate almost $770,000 of its almost $1.5 million tourism fund, which includes hotel occupancy tax revenue of $630,000, on the conference center this year.
Management
One of the issues that must be considered if discussions on a public events center progresses is management. Officials would have the option of taking on the added expense of a professional management company or budgeting and hiring from within.
Management companies, in most cases, handle everything from daily operations and event planning to ticket sales and marketing. While the cost of such services is a major expense, they would be needed if the events center was run locally or by a contracted firm.
Somervell County and the city of Granbury currently handle the operation of their respective events facilities, but Somervell County Expo Center was once operated by Dooley Management.
A 2013 article published on the Meetings and Conventions (M&C) website, noted a shift toward privatization about three years ago. The publication references the largest facility management company in the nation, SMG.
SMG, a global management company operates stadiums, arenas, convention centers, performing arts theaters and recreational events centers, including McLane Stadium in Waco, the El Paso Convention Center, Irving Convention Center and many others across the state.
Over a five-year period, the convention center client list of Pennsylvania-based SMG increased by 14 percent, according to M&C, which cited a company official as saying the company managed more than 85 percent of the publicly owned, privately managed convention centers in the nation.
The SMG official said employing management firms has historically been most common in small to mid-size markets.
The article also notes the success of pubic facilities, including the Orange County Convention Center in Orlando, Fla, and reference the Memphis (Tenn.) Convention and Visitors Bureau where officials terminated a contract with SMG to save money and reduce the facility’s deficit.
The possible impact
When considering the potential impact of public entities entering into the event hosting business, there are two sides of the story to consider. Members of the events center core committee have said Stephenville doesn’t currently have a facility that can host groups of 500 or more.
“A multi-purpose facility that could accommodate large groups for conventions, speakers, entertainment, graduation ceremonies, possibly even tournaments and more – with break out space for smaller meetings – would be a great asset to community members, businesses and visitors,” July Danley, president and CEO of the Stephenville Chamber of Commerce said last week.
“Most other communities our size have some sort of public conference center to host a variety of events,” she added. “Stephenville is currently missing out on the visitor dollars that these other towns are benefiting from. We are very fortunate to have wonderful parks for outdoor sports, a variety of private venues for small to medium size events, a privately owned arena for equine events and numerous school and university facilities. Many of the current school and university facilities, though, are busting at the seams and stay booked with local student activities, so are not regularly available for hosting conferences or tournaments that would bring in visitors and their dollars.”
But some of the aforementioned smaller events could have an impact on local businesses that profit from the use of their facilities as mentioned by Dr. Malcolm Cross in his recent column.
“One should be concerned with whatever events may be held, and whether the event center would take business away from, say, City Limits, (The N at) Hardaway Ranch, or other privately owned events centers in the vicinity,” Cross wrote.
The discussion
The proposed events center is simply a topic of discussion at this time, according to local officials. The next step calls on community input.
Community members are invited to attend a summit Tuesday to address the potential need for a public events center facility. Representatives from stakeholder organizations – including the City of Stephenville, Erath County, Stephenville ISD, Tarleton State University, Stephenville Economic Development Authority, Stephenville Economic Development Foundation, and Stephenville Chamber of Commerce – will meet to discuss the current state of available facilities, short-term and long-term facility needs and growth opportunities.
The summit will be held from 5:30 p.m. until 7 p.m. in the Thompson Student Center Ballrooms on the Tarleton State University Campus. Parking will be available off of Rome Street, south of the Nursing Building and west of the Barry B. Thompson Student Center.
“If there is a shared desire to pursue the idea further, the next step would be researching viable options for a facility that could bring in revenue to the city and county as well as increase spending at local businesses,” Danley said. “Research will need to include looking into a variety of creative funding options from grants to public-private partnerships and other possible resources.”
The event center summit agenda outlines other a number of core group tasks, which, in addition to financing and facilities includes tourism uses, sponsorships, revenue sources, land locations and management/maintenance.
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