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Iowa Events Center Loss is Less Than Expected

Arena Will Take in $1.4 Million More Than Was Budgeted

Bert Dalmer

Des Moines Register

May 12, 2006

[Note: This material is copyright by the Des Moines Register, and is reproduced here as a matter of "fair use" for non-commercial, educational purposes only. Any other use may require the prior approval of the Des Moines Register.]

The first year of concerts, trade shows and hockey games at the Iowa Events Center will cost Polk County taxpayers almost $1 million less than anticipated, elected officials learned Thursday.

County leaders had expected the first year of operations at the $217 million complex, which is anchored by Wells Fargo Arena, to require a major cash subsidy.

But they were told Thursday that the arena - the moneymaking engine of the three-building facility - is expected to generate $1.4 million more than was budgeted last spring for ticket sales, suite leases, concessions and advertising.

Expenses, meanwhile, will be about $300,000 less by the time the budget year closes June 30.

"We got a couple more major concerts than we expected, which was a huge plus for the budget," General Manager Matt Homan said.

Homan said ticket holders ate and drank more than expected, too.

The news drew laughter and applause from county supervisors and employees, who have been under public pressure to run the Events Center frugally.

Supervisors declined in 2001 to put the controversial project to a public vote, and in the four years that followed, construction costs rose from $201 million to $217 million.

"This is just awesome," said Angela Connolly, the only current supervisor who was on the job when the project was planned and approved. "Obviously, it was the arena that carried us. There's no question about it - Hy-Vee Hall has to step up to the plate and make us some money."

Hy-Vee Hall, a 100,000-square-foot exhibition center, fared considerably worse than hoped. The poor performance was due in part to the unexpected cancellation of four large events.

Veterans Memorial Auditorium, which was updated as part of the project, did about $200,000 better than expected.

All told, county consultants told supervisors they should plan to spend just $43,000 to balance the budgets of all the county's civic attractions.

Before officials could savor the moment, the consultants asked for $2.3 million to make improvements, including $1.8 million for the Polk County Convention Complex, three blocks south of the Events Center.

Officials from Global Spectrum, the Philadelphia firm hired to manage the Events Center and the "Plex," said the latter is in dire need of a new roof, escalators and $250,000 in ceiling tiles.

A ballroom and hotel would also make the facility more competitive in the meetings market, they said.

Global Spectrum's report quickly revived talk among supervisors of shutting the Plex, which has been a consistent money-loser since it was built in 1986.

A proposal in 2004 by the Downtown Community Alliance to run the facility in exchange for $3 million in renovations, a $1 million line of credit, and a two-year share of operating losses was never acted upon by county leaders.

Earlier this week, the supervisors agreed to borrow $1 million for Plex improvements, but no provisions have yet been made for additional upgrades either there or at the Events Center.

"I believe, in the long run, that keeping the Plex open is not going to be cost-effective," Supervisor E. J. Giovannetti said. "If you can show me an equal or lesser investment someplace else that would serve the same purpose and end up being cost-effective, I'm on board."

Global Spectrum's Scott Kavanaugh said the Plex is in some ways more useful than the meeting space at Hy-Vee Hall because its rooms were built to accommodate a wider range of groups.

"That's why the Plex still has value," Kavanaugh said.

In 2002, when Polk County planned to use its own employees to run the Events Center, consultants predicted that it would take three years before operations were out of the red.

Supervisors instead hired Global Spectrum, which agreed to bear any deficits at Wells Fargo Arena if Polk County covered operational shortfalls at Hy-Vee Hall, Veterans Memorial Auditorium and the Plex.