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Bicentennial Center Task Force Special Consultants Meeting Summary Report "- '\ '- Special Consultant's Meeting with Bicentennial Center Task Force February 16-17, 1990 SUMMARY REPORT Prepared By Roy G. Saunders March 12, 1990 March 12, 1990 TO: Salina Bicentennial Center Study Task Force Mrs. Ann Knowles and Mr. Lewis Reid, Co-Chairmen FROM: Roy Saunders and Doug McGlaun SUBJECT: Observations and Recommendations by Doug McGlaun, CFE, Assistant Director of Public Events, Will Rogers Memorial Center, Fort Worth, Texas; and Roy Saunders, CFE, Director of Public Events, Centers of Tulsa, Tulsa, Oklahoma Doug and I want ,to take this opportunity to again thank you and the other members of the Task Force for the opportunity to work with you on the re- evaluation program. We were both impressed with the make-up of the Task Force, . your positive attitude, interest and commitment. Bill Harris thought it would be helpful if we were to document our observations, opinions and recommendations. We agreed it was a good idea and are pleased to do so. Doug has reviewed a draft of this letter and advised me that he is in complete agreement with everything I have stated. We both wish the Task Force, the Center staff, the administration and your City Commission the very best. You are all certainly to be commended for undertaking such an important and complex matter. You are taking a very logi- cal approach to planning for the future of your Center. We look forward to seeing your recommendations and how the community responds~ Doug and I both did our best to be totally objective and candid in our discussions with you. We sincerely hope you found our participation to be beneficial. We have told Bill not to hesitate to call on us if we can be of assistance in any way. It is quite obvious the staff is being very open and supportive of the Task Force assignment. They have provided you a wealth of significant and relevant material. Doug and I spent a considerable amount of time reading the moun- tain of material. We had some in-depth discussions on our way to Salina, and we felt we had a good feel for the operation prior to our arrival. Even so, we were pleasantly surprised at what we saw during our stay in Salina, both in what is taking place in the community as a whole and with the Bicentennial Center. We agreed the Center is a very impressive and unique facility for a city of 44,000 population. To our knowledge there is no other city in the country of the approximate size. of Salina which boasts of such a fine multi- purpose bUilding. It is very attractive, exceptionally well maintained and efficiently operated by an up-beat, committed and very capable staff. The Bicentennial Center is an exemplary civic center. In fact, it is much more. It provides numerous services and opportunities for Salina's trade area--that being the north-central and northwest part of the state. Additionally, it serves the entire state for various functions. Its value actually extends far beyond the state lines. It is well recognized as a regional center, having proved its capabilities to accommodate a variety of multi-state activities. Two deficiencies stand out when you look at Salina and the Bicentennial' Center for a convention site. One is the lack of commercial airline service. The other is not having lodging facilities adjacent to or within walking distance of the Center. Even so the pluses by far outweigh the minuses. STAFF One of the things which impressed us most is the extremely lean staff and how various civic groups are being utilized so extensively at a real cost savings. The use of those organizations to staff concession stands, the box office, take tickets and usher at very nominal rates is a very significant factor in containing operating costs. It also provides income for those groups and enhances public involvement with the Center. The average personnel cost today for public assembly facilities is about 65 percent of the annual operation and maintenance budget. The Bicentennial Center's 54 percent of total operation and maintenance cost is very commendable. MARKETING The Center should have a full time staff member responsible for marketing the facility. That individual should represent the Center in cooperative efforts with the Convention and Visitor's Bureau and the hotels and motels. A comprehensive marketing plan should be developed jointly by the Center, The Convention and Visitor's Bureau and the lodging industry. That plan should be implemented and carried out through the use of Salina's Transient Guest Tax' proceeds. All costs related to a full-time marketing position should be borne by the Transient Guest Tax. 2 I understand a representative of your Convention and Visitor's Bureau made a statement to the effect that in his opinion Salina has penetrated the existing markets and is getting its share of what is available in conven- tions and tradeshows. I would respectfully question that thinking. New national, regional and state associations are continually being organized. Existing ones grow, change and have different requirements. The meeting and convention business continues to grow throughout the country. Consumer and trade shows are gaining in appeal to a very diverse array of marketers. It is essential that those of us who are responsible for marketing public facilities, such as the Bicentennial Center, be continually alert and searching for new and different possibilities. The Center has proven to be a very popular venue for certain types of sports and understandably so, given your central location, superb arena, quality staffing and community involvement. Just 'like conventions and trad~shows, these are not generally great revenue producers for the building but are very desirable events for Salina and the market area. Again, I would encourage you to develop a close relationship with area Universities, particularly Kansas State University. I think you. will find them to be a fertile source for meetings and seminars. I would suggest you contact representatives at Kansas State University in an effort to set up a "Salina Reception", where you could host a cocktail recep- tion for any of the faculty interested in meetings and conventions--then invite a select group to dinner. The following day a mini tradeshow could be set up by the Bicentennial Marketing Manager, along with Convention and Visitor's Bureau staff, plus other interested local hospitality business representatives. Assuming success of this event, Kansas University and Wichita State University might. be targeted for future years. It seems essential to me that the city have an in-depth review, on an item by item basis, of how the Convention and Visitor's Bureau has been and is currently utilizing the Transient Guest Tax proceeds. Even if the Center receives full benefit of a two percent increase in the tax, which I under- stand would amount to approximately $160,000 per year, it should not realize any less support from the present three percent. It would seem that the Convention and Visitor's Bureau should submit a line item budget for all such funds and provide a detailed monthly accounting of all expenditures:-ill of'which would relate to a previously submitted annual marketing. plan. 3 Most likely some of the motel operators will strongly oppose an increase in the tax. A very common argument in the industry is that it will jeopardize their competitive posture with hotels/motels in other communities. I am confident you will find they will be unable to substantiate that argument. It would be an interesting challenge for them to document that they are now losing business to communities charging less than the three percent. Likewise, it would be equally interesting for them to prove they are realizing business because other communities assess a four or five percent tax.. It simply is not a consideration when an individual rents a room or a community is submitting a bid for a convention. If your Convention and Visitor's Bureau is not presently utili.zing I-NET computerized service for information relative to possible meetings, trade- shows, etc., I would strongly recommend they check into it. ECONOMIC BENEFIT I would encourage you to have an Economic Benefit Study performed by a credible firm such as Laventhol and Horwath. The information such a study would pro- vide could prove to be extremely important as you develop your recommendations for the City Commission. Typically the impact is of such magnitude that it is well worth it to have it documeIlted by "professionals" such as Laventhol and Horwath. PRIVATIZATION My opinion of the matter of privatization is as follows: There obviously are operations where it is the logical way to go. That doesn't happen to be the case with the Bicentennial Center where you have such an ef~icient operation. Management contractors can take over buildings that have been plagued by political interference or those which have been poorly operated and maintained, and show significant improvement or, in the case of extremely complex, giant facilities, such as the Superdome, private management fills the bill. The primary concern for a contracting firm has to be the bottom line. That might prove to be at the expense of many very worthwhile community events, i.e., school graduations. At times contracting firms realize savings by volume purchasing but that could be at the expense of local vendors. Another important consideration should be the fact that the City would have to relinquish a significant amount of control. Even in succeeding discussions with a representative of a private firm. he agreed that the Bicentennial Center did not appear to be a candidate for privatization. Further, and unfortunately, none of the private firms appears to be interested in "just being" an event promoter. 4 The matter of Food and Beverage is very much akin to the question concerning an overall management contract. As the old cliche goes, "When it ain't broke, don't fix itl" It's very obvious Phil Chamoff and his staff have risen to the occasion and established a reputation for providing top quality in-house catering. Nothing is more important in the whole scheme of the hospitality business. While the large banquets are important, so are small luncheons, receptions, hospitality rooms and even coffee breaks. You cannot afford not to have them done in a first-class manner. While in certain situations there are. some advantages to an open-catering policy, it makes no sense to permit outside catere.rs to be selective in handling only major events (larger meal functions), while in-house catering has to take the coffee breaks, small events desiring meal service, hors d'oeuvres for small receptions, backstage catering for entertainers and hospitality rooms for trade shows and sports. The Center staff is also doing a top-flight job with less than adequate con- cession facilities in the arena. The limited kitchen area and equipment does not lend itself to more than one crew using it at the same time. Having more than one operator in one facility also creates concern or questions on accountability for lost or broken property and equipment. Food and Beverage service is the primary revenue generator for the Center. It should be strongly supported and promoted to help retain present events, attract new ones and enhance the revenue picture. I do feel that caution should be taken to avert Food and Beverage becoming the overriding effort to book events for t~e Center. PAY PARKING Pay parking is a very important source of revenue for many facilities. Prior to visiting Salina this time, I was prepared to recommend pay parking. However, having seen the location of the Center, the fact that all parking meters have been removed in the City, and that there are no other pay parking facilities in the community, I feel it would be not only controversial but create an unnecessary negative image just as you are preparing to expand and improve your marketing. ENTERTAINMENT Entertainment will continue to be a good revenue generator for the Center, but there. are several obstacles which should be kept in mind. (1) It is a very volatile and unpredictable business. There are continually new gimmicks, trends, fads, changes in technology, etc., which impact it. (2) Salina has a 5 very limited population base to draw from and one that is spread over a broad geographic area. (3) General economic conditions of the area are a signifi- cant factor in what people are able and willing to spend on entertainment. (4) When you do have opportunities to book entertainment events, the arena often is already committed to sports, tradeshows, conventions, etc. This is one reason why I suggest you look closely at expanding your exposition/meeting facilities so that your arena will be available for more entertainment activities and other arena type business. Promoters should be encouraged and assisted, as much as possible, to bring in a wide variety of entertainment including family shows, different types of concerts, comedians, etc. It is certainly desirable to have live enter- tainment opportunities available as often as practical for all age levels. Local businesses and organizations should be encouraged to sponsor and promote entertainment events, particularly family type shows. However, I would suggest the primary focus be on other types of events, which will benefit the economy and serve community needs. This is where a marketing person on the Center staff should devote most of their time. IN-HOUSE PROMOTION/CO-PROMOTION Promotion of entertainment events is just too risky to attempt it with public funds. The same applies to outright co-promotion or any type of partnership ventures. There are several ways that venues can assist promoters without getting involved in the entrepreneurship. Bill and his staff are doing some of those things, and I'm sure they're receptive to new ideas and approaches. BOOKING/SCHEDULING If a set policy is adopted concerning booking priorities, as is common with many buildings, we would suggest: 1. Conventions and other events, which will result in significant hotel/motel room occupancies, first option beyond 18 months to two years. 2. Entertainment and sports, which will enhance the Center's revenue, second priority, particularly within the 18 months to two year span. 3. Local events, such as consumer shows, sponsored by local civic groups. 4. Other' events that have historically been booked on a regular basis but don't necessarily satisfy the above criteria, might need to be grand- fathered in. 6 NEED FOR EXPANSION Even though you have an excellent facility, it appears to me you are seriously undersized in meeting rooms and exposition floor space. Salina is a very desirable geographical location. It is a very progressive community. All indicators are certainly favorable for you to attract many more and larger events. I would strongly encourage you to proceed with expanding the Center's capabilities to accommodate activities which will contribute significantly to Salina's economy and image. I don't hesitate to encourage you to place confidence in what the staff tells you concerning the problems they are experiencing between the Box Office and Lobby. It would be a very logical endeavor to get them separated. The building is also grossly deficient in office space. Adding a marketing person will compound that problem. To provide an office for your tenant is a real plus when it comes to selling the building. Such amenities are important features. Events tend to go smoother, there is better coordination and fewe,r foul-ups when the staff has elbow and breathing room. COST TO OPERATE AND MAINTAIN In our opinion the subsidy required to operate and maintain the Center does not appear out of line. We would all like for our buildings to show a profit or at least break even. In most cases that simply is not going to happen. Rental rates and service charges need to be kept low enough to be competitive in order to bring events in which will benefit the area economy. Local organizations should be able to utilize the facilities for community enrichment at reasonable costs. We sensed that you have a good appreciation for the value of the Center to the community, both from the standpoint of economic benefit and as a genuine asset to Salina's image. You are looking for ways to generate more activity in the building, and with a good marketing program, you should succeed in that endeavor. However, you may find that related operating and maintenance costs exceed the amount of additional building revenue. At the same time the trade-off benefits to the community should mdre than off-set the additional cost. ADVISORY BOARD You asked our opinion concerning the appointment of an on-going Advisory Board. You will recall I stated I could live with one, but I would prefer 7 not. My experience has been that without decision making authority and responsibility, it is difficult to maintain the interest of such a committee over the long haul. That usually is not the case with a Task Force such as yours, which has been given a specific assignment and a certain time frame in which to complete the project. Another observation in that regard would be that the Center is not troubled by political interference. Salina appears to have an efficient, stable form of government. The Center Manager reports directly to the City Manager and that is a definite plus. Why burden an efficient administration with more meetings, reports, etc? On the other hand, the City Commission would be wise to keep your Task Force involved as an advocate for the recommendations you submit, that is, providing a majority of them accept your recommendations. In the case of Tulsa, we did have a Citizens Advisory Board for both the Convention Center, 1964, and for the Performing Arts Center, 1974. However, the Boards were abolished when the Centers opened. 8