Local Boy

Has anyone ever heard the expression, "The only one to make money in the hotel business is the third owner"? Meaning, the first two sell the property at a loss and then the third owner can cash flow the debt. I wonder if this may be the situation with this property.

For the individuals who don't pay real close attention to The Alerus, there were major breakthroughs recently in regards to reporting on the center... -"Secret subsidies" totalling approximately $850,000. These transfers were hid from the public while commission members and The Herald hyped "profits". -Details of how The Concert Fund is structured and transfers from another city fund. -And the fact that Alerus concert events simply don't exist without a 100% incentive guarantee to the promoter. With these incentives, taxapayers lose 100K to upwards of 400K PER SHOW. All these stories were broke even though The Alerus Commission and Grand Forks Herald did everything they could do to hide them. Alerus supporters should be furious to know that they've been supporting the center all this time but were not made aware of these facts. And I'm sure many are. It's my opinion that the disclosure of these facts have lead to the recent formation of the new task force. Alerus Commissioners lied to the public and their supporters and now we're all witnessing the repercussions of their actions. Also, in the wake of all the above disclosures, The Exucutive Director of The Alerus, an employee of VenuWorks, and an Alerus Commission member called citizens "morons". You all form your own opinions.

Have you checked out my alternatives? (they're brilliant ) I'm interested in hearing your thoughts.

SiouxMeNow!, I've provided operation alternatives for The Alerus Center. Do you have any alternatives? Here are the facts... The arena side of the center cannot present a show without a 100% guarantee incentive from taxpayers. The convention side was structured from day one to attack the private sector. Now, any gains that are realized by the convention side, come at the expense of privately owned local businesses. Are you fine with these facts? I'm sure you'll agree, it's time for change. What do you propose? Any ideas?

Oh...I'd like to see this thread continue. Believe it, or not, this crap is probably the most valuable resource for the newly formed task force. Also, it would be a shame for a "naysayer" to be the smartest person in the room.

LetsGoSioux!, See my post in this thread on 10/13. I'd be interested to hear your feedback. Why the term "naysayer"? The Whistler and I are evaluating The Alerus from a postion of neutrality. SiouxMeNow, for example, is simply an advocate starting with a conclusion and attempting to connect the dots favorable for the "supporters". No naysayer here. I hope my posts stand on their own. I hope you'll agree, I'm an individual offering constructive, viable solutions. The Alerus is here with 9 years of market data. Let's tweak the property to fit the market. Operating the facility as if it exists in a larger market is a proven loser. The major problem with my prior sentence is convincing the few "community leaders" who set up the structure of The Alerus to admit they've failed the community and changes need to be made. That will be the biggest challenge, in my opinion, for the newly formed task force.

SiouxMeNow, $8M is the total of annual operating losses and debt service (douche). You need to understand the big picture that is the white elephant.... The Alerus has three primary missions... Arena concert events. Regional conventions/banquets. Sioux football. Arena concerts simply DO NOT happen unless TAXPAYERS FULLY subsidize and underwrite ALL risk, removing the risk from the promoter. Recently, it's been revealed that the TOP GROSSING/MOST SUCCESSFUL tours in America lose from 100K-325K per show in Grand Forks. In case you're confused, that's a bad thing. The convention side was structured to FULLY ATTACK the private sector from DAY ONE. Now, all players that were in the market and serviced the banquet sector in Grand Forks are all but GONE. That is also a bad thing. Sioux football is a good thing for two reasons... The added seating in The Alerus increases the gross potential that can be realized per game, if the demand is there. The weather climate in Grand Forks is unfavorable in the late fall and early winter for outdoor football and most people would agree; I speculate. Of course, this will all change if UND develops their own football venue. Hey, sorry if I left out a word, or two, it happens. People are human. Can you refute my points? Or would you prefer to attack my grammar? Oh, BTW...the old Civic was structured for EXISTING private sector businesses to INCREASE their biz by bringing events to the venue. This structure accomplished two great missions...EXISTING businesses were able to service clients and increase revenues when they were booked or the group was too large for their property. Also, this structure was FANTASTIC for one very simple reason...ALL private sector banquet operations basically became sales agents for the Civic without the Civic carrying the overhead (overhead means fixed-costs). Feel smarter? Have a great day!

Weigh in on the economic impact issue? Okay.. The Alerus Commission and VenuWorks hope for two major concert events a year. Can you believe it? Two. It's my strong opinion that they are not playing for economic impact; they are playing for a couple "I told you so" moments. AND, by the way, these dates are fully subsidized events. Meaning, taxpayers relieve the promoter of ALL risk on the dates. So, what we have are complete non-reality events. History and numbers don't lie; in the past few years The Alerus has subsidized some of the largest grossing, top drawing tours working. These dates have lost $100,000 to $350,000 per show. No anymous or drama here. The data points to simply a nonecononical, dead end business plan. Small business operators know that success comes from a day in, day out daily grind. The Alerus playing for these media-hyped "I told you so" events is completely unacceptable. See my prior post on an alternative focus for the property. Know what? I can even expound on that post. Belittleing "naysayers" and calling skeptics with well thought out, experienced opinions on the property "morons" is unacceptable. Thank you to The grand Forks Herald for finally covering the problems with The Alerus. Grand Forks deserves much better. Riding a continuing plan of failure into the dirt operating a publicly owned facility is wrong. If the commission wants to do this. Again, a publicly owned facility is not the place for it. "Cha, cha, cha, changes...." BTW, The Alerus is supposed to be a rental facitiy; not involved in the risk on the dates. The subsidies stem from desperation. Tertiary markets are not supposed to be in this game. Want to see a major concert event? It's simple; drive to Mpls-St. Paul, Wpg, or Fargo. A show with a $1,000,000 gross should pay the facility $80,000-$100,000 in rent per date. PLUS, the venue retains all revenues from concessions, parking, etc. Ugly situation in deed.

Does the 508K ytd loss include the 225K transfer? Does anybody know the approximate tax subsidy that the Alerus will receive this year?

Take a look at these numbers regarding The Alerus... $508,000 reported loss ytd. $97,000 Britney Spears loss not included in the 508K. $225,000 transferred by the city council not included in the 508K. $500,000 approx. amount of sales tax subsidy received annually by the Alerus. If the year ended tomorrow, The Alerus would post an operating loss in excess of $1.3 million. I believe the debt service is somewhere in the neighborhood of 7-8M a year. It's very difficult to get accurate accounting from The Alerus and The Herald. I would appreciate it if anyone has any further information that refutes my above figures. Thanks

Aha! Civility...love it. Now if VenueWorks and Alerus Commission members can learn to play nice, we can work towards a cumbaya moment. For those not in the loop, the parties mentioned above have moved beyond calling concerned citizens "naysayers" and currently prefer "morons". These are the same individuals who, with The Grand Forks Herald's assistance, tease "profits" when they are fully aware of secret subsidies totaling approx. one million dollars. I agree with all, this topic is getting old. Criticizing Alerus supporters is the equivalence of punching babies and they just dig in their heels deeper and because the public becomes increasingly apathetic of their practices, they take larger risks with public funds, mumbling words like Cher, Britney, and so on. It's a sad situation. Grand Forks deserves better. Drive by every banquet player that serviced the Grand Forks market pre-Alerus, they're gone. They may still be "there" but, they're gone. Thanks guys. Star, I knew you'd like my suggestions.

The solution to retool The Alerus lies in these areas.... Scrap the in-house catering on the convention side and approve about 5 "Authorized Preferred Catering Partners". On the arena side, use the concert fund to subsidize Regional promoters. Provide incentives to the entities to bring more dates. 5 dates a year equal one level of subsidy, 10 dates equals more. A sell-out equals no subsidy. Remember, The Alerus is scaleable. Stop swinging for the fences on the major A List tours, it ain't workin'. Think Tom Petty, Willie Nelson, and Cheryl Crow level acts. The Alerus in-house promoters need to focus on reoccuring acts that continue to develop, produce more material, and inspire their fans to come see them. Think TSO, now go find 10 more. Think WWE, Motor Sport Events, and Christian Rock. The artists don't continue to develop and draw? No problem, dump them. You've got rising star artists that you're nuturing relationships with for future dates. In the are of major concert attractions, this is where Alerus Financial can really step up and earn the goodwill they originally set out to gain. ALERUS FINANCIAL PRESENTS.... They subsidize, they get the goodwill after successful dates. Also in the area of major concert events, AEG and LiveNation can bring dates when The Fargo Dome and MTS Centre are booked. These are rentals, not subsidized. The subsidized dates are proven failures. Yeah, The Alerus and Grand Forks market gets second cut, that's how reality works. Now, what have we accomplished? Three objectives

I indulged Star2City's request and then trashed it. Enlightening individuals who still use terms like "naysayers" and the old civic center arguement is futile and a waste of time. After reading my alternatives for The Alerus, I concluded one thing... The Alerus is a pretend operation. It pretends to operate in a market that simply does not exist. By that I mean, supporters believe their same ol' hooey that they used in the campaign stage to get the project approved by voters. Supporters used jacked-up projections from hypothetical complexes in much larger markets. And then, turned around and operate the complex AS IF it were in one of these larger markets. The breaking the cycle of failure for The Alerus lies in patterning the operation to fit with the Grand Forks market. We've all seen what the results are of "pretending" The Alerus operates in a larger market. So, The Alerus is a pretend operation. Again, any future success that The Alerus can realize will lie in patterning the operation for the market in which it is located, not the other way around. Just my two bits. (pssssttt, The Alerus secret subsidy reality blew the old civic center arguement out of the water. That and the fact that arena loses from $100,000 to $300,000 PER SHOW and not PER YEAR)

Star2City, I'll take the challenge. Just give me some time, I'm a busy boy. There won't be any "creative alternatives". Just sound analysis of the situation and an appropriate alternative. My sense is you're grading on a curve and allowing 90% for participation. Probably because you're close to the supporters, they're your buddies. Stay tuned! Suspense, can you feel it?

The Alerus had two missions; major arena events and multi-day regional conventions. It has failed miserably on both accounts. (Yes, also Sioux football) The only positive aspect, according to supporters, is how well it does competing with the local hospitality sector. Supports bolstered "profits" while they were fully aware of nearly $1,000,00 of secret subsidies. In my opinion, the complex has killed any future development in the hospitality sector outside of Holiday Inn Express type properties without any destination offerings; ie. food and beverage operations. Supporters and operators refer to citizens as "morons". Supporters commission economic impact studies that conclude a couple who drives across town for a show, drop $300 outside of the price of their tickets (app. 150/ea). With debt service, tax juice, and subsidies, The Alerus sucks about $9,000,000 out of the local economy annually. The Alerus has become an anchor that the City Council has to drag around on their ankles, stifling future development of Grand Forks and hindering them from addressing real current and future needs of the town. The property continues to decline and the same people are still in charge. I believe the majority of the general public is completely apathetic about the property and could care less. Time to retool. It ain't working. I wouldn't state it was, even if I was just an anonymous poster on an internet chat board. Yes, "It's nice to have in town". The arguement is the cost/benefit. It simply isn't there...my opinion, of course.

I haven't heard the whole story. Maybe he snapped because he couldn't get a fork. (Inside Pepper story)

A ring dike around Grand Forks is not an option. The city would simply be inundated via the sewer system.

Let's get real. There is VERY little topography in the area. In '97, the flood stretched out about 3 miles east from the river banks. If the eastside holds up all along the line, the reverse condemnation would put the waterline out farther at the same levels the river reached in '97. A breach south would create a situation impossible to defend against. Ringing the city with a dyke would simply be impossible.

Mind boggling. The area is on the brink of total distruction and the GF -vs- Fargo thing pops up. Immaterial and petty. It's not the time for this!

Grand Forks residents appear to be feeling a false sense of security in regards to the flooding. Isn't it a case where one breach south of town on the east side of the river, could esentially fill up the whole town again? A combination of an understating of the projected river level, like '97, coupled with a breach, could result in a 4 mile wide swatch of water that would be impossible to defend against.

Pretty funny segment. Anyone else see it? "Thanks for dressing up for the photo shoot, coach".

Below is the release I copied from culturepulse.org. Also, Terry Dullum's blog has a great post regarding Tom. Good stuff!!! Keep up the great work Mr. Brosseau, traveling the globe extolling the great attributes of this fantastic part of the world! TOM BROSSEAU Record Release show for CAVALIER with special guest, Brenda Weiler Empire Arts Center, Saturday April 26, 2008 7:30pm Tickets: Chester Fritz Box Office & Ticketmaster: $15 advance, $18 day of show Tom Brosseau is pleased to welcome special guest Fargo-born/Minneapolis-based songstress Brenda Weiler to join him as he returns to his hometown to celebrate the release of his latest album, Cavalier, on Brighton UK/New York-based FatCat Records Weiler will be supporting her most recent release, End The Rain. Weiler has received the Minnesota Best Singer/Songwriter and Best Vocalist awards multiple times. She received Performing Songwriter

Tom Brosseau is back at The Empire with Brenda Weiler this Saturday. You can find all the details at culturepulse.org. Should be a great show. Tom and Brenda are both fantastic!

The I-29 route to Denver from Grand Forks is definately a good option. I prefer it for making time. Take I-29 to Sioux City, grab highway 77 from Sioux City to Lincoln, it's 120 miles and the only 2 lane on the route. You bypass Omaha traffic and shave miles. It's the least scenic route, but the flow from Lincoln to Denver clips along at about 85-90. With minimum stops, it's about 14 hours, just shy of 1000 miles. 13 hours is easily doable.

Where can I grab an on-line radio feed? Thanks in advance!