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Erik Burgess, Published September 20 2013

Majority of Fargo City Commission favors convention center downtown

FARGO – A majority of the City Commission here favors using Fargodome reserve money to build a proposed new convention center downtown, if the financial details work out.

Fargodome leaders expect a feasibility study, due early next month, to show whether 50,000 square feet of additional convention space is needed in Fargo and where it might go best.

Pending those results and a hard look at the how to pay for new convention space, Brad Wimmer, Tim Mahoney and Mike Williams said this week they would prefer a new center in convention-friendly downtown, maybe in conjunction with the new City Hall. A city committee on Thursday recommended a building a new City Hall near the riverfront downtown, on the site of the existing City Hall and Fargo Civic Center.

“Downtown makes sense for a site in that it’s closer to the heart of the city,” Williams said. “The Fargodome is beautiful, but there aren’t a lot of hotels there. There aren’t a lot of shops there.”

Mayor Dennis Walaker and Commissioner Melissa Sobolik said they didn’t want to form an opinion until they see results of the feasibility study.

The Fargo Dome Authority Board is the governing body for the city-owned Fargodome, but it is an advisory committee to the City Commission, which will have the final say on how or if the Fargodome’s $37 million reserve fund will be spent on a convention center.

While commissioners don’t all agree on where the building should go, they agree that financing the project remains a big “if.”

“Sometimes there is not enough money to do everything that everybody wants,” Walaker said.

Attaching new space to the Fargodome would be cheaper than building downtown, said Deb Mathern, president of the Fargo Dome Authority.

But until the feasibility study is completed, Mathern said she’s not ready to say that the Fargodome should follow suit and build downtown next to the new City Hall.

Developer Doug Burgum of Kilbourne Group has advocated building a new City Hall and a Fargodome-financed convention center downtown in conjunction with a new floodwall in the area. Burgum has bought and renovated numerous downtown building and hopes to build a $125 million privately funded skyscraper in the same area.

“Even though we’re hearing a lot of scuttlebutt out there, we’ve decided to just stay focused on waiting for that report to come in from HVS,” she said. “Still trying to keep an open mind.”

Mathern said the Dome Authority could vote on the proposed convention space shortly after hearing back early next month from HVS Convention, Sports and Entertainment Facilities Consulting.

Enhanced downtown

The Fargo Dome Authority has been considering adding at least 50,000 square feet of convention center space to the arena for the past few months. Officials there say more convention space is needed to make the Fargodome more flexible in hosting a wider variety of events.

Mathern said it’s still possible that the consultant will make a recommendation not to build a convention center at all, though she said that is unlikely.

HVS sent out about 2,500 surveys locally to gauge interest in a new convention center, and a majority of the 540-some that were returned favored building more convention space, Mathern said.

Mahoney said he’d like it built downtown. The deputy mayor pointed out that the Fargo Marathon moved next year’s finish line away from the Fargodome and to downtown, and that ESPN also turned down shooting outside the Fargodome for its weekly college football show “College GameDay,” which is filming from 8 to 11 a.m. today downtown.

“If you get downtown, it’s more vibrant and alive, and we have more things going on … There is some increased potential if we can enhance some of the downtown area with a convention center,” Mahoney said.

Wimmer said he has “always thought” that a convention center would be better downtown.

“But having said that, I’m anxiously awaiting the study that the Fargo Dome Authority is doing,” Wimmer said.

While Sobolik said she’s keeping an open mind until the Dome’s feasibility study comes back, she would like to see more development come downtown along with the new City Hall.

“I want to see something downtown that’s a draw for people,” Sobolik said. “That’s the heart and soul and the charm of Fargo, and I think we need to get more people there.”

Walaker said he’s in a “wait and see” mode until the Fargo Dome Authority comes back with a recommendation, but said he is “somewhat impressed” with the Alerus Center, the Grand Forks event center miles away from downtown where the arena, convention center, hotel and restaurants are all connected.

Wimmer said if the Fargo Dome Authority made an “extremely strong” recommendation to attach convention space to the Fargodome, the city would have to “very seriously” consider it.

“If it comes with a modest or low recommendation, obviously that would point us downtown,” he said.

No open checkbook

Despite a healthy reserve fund of $37 million, the city doesn’t have an open checkbook in building a new convention space, city and dome leaders agreed.

“A lot of this could come down to money,” Mathern said.

Williams said the Fargodome needs money generated by the reserve fund – about $800,000 to $1 million a year – to cover regular capital expenses that aren’t paid for through the operational budget.

The Dome Authority needs to have a “strong balance” in that reserve fund to continue to create the dollars needed each year for capital costs, Williams said. He estimated that number to be about $12 million, at least.

A new convention center would also need a strong reserve to help pay for capital projects, say another $12 million, Williams said. That means he’d like to see at least $24 million left in the reserve, leaving about $13 million to spend on a new space.

“It’s not like they have $37 million to build a convention center with,” Williams said.

The reserve fund also protects the taxpayers from having to bail out the Fargodome if it were to have a bad financial year or two, Mahoney and Wimmer said.

Mahoney said spending about $15 million of the dome’s reserves on a convention center is a preliminary number he and others have tossed around.

“But there’s also been some talk of increasing the skyboxes in the Fargodome” and doing other capital projects beyond a convention center, Mahoney said. “So I think Deb Mathern’s group is looking at that, and I’m hopeful that they’ll bring a recommendation to us.”

Walaker and Sobolik said they wouldn’t want to spend any more than half the reserves, or about $18.5 million, on the project.

Wimmer didn’t have a set number in his head for how much he’d be OK with spending, saying only that the commission needs to be “very comfortable that there’s a reserve left … for any emergencies.”

For instance, before the financial crisis of 2008, the dome had about $33 million in reserves. When the recession hit, that number dipped to around $29 million, Mathern said.

“That could happen again,” she said. “Our Fargo Dome Authority is maybe a bit conservative when it comes to that fund.”

Considering a convention center

City officials may use part of the Fargodome’s $37 million reserve fund to pay for a new convention center, a plan that would need the City Commission’s approval. Here is where commissioners stand on the project at this point. A study of convention space needs should be done next month.

Mayor Dennis Walaker:

Site preference: None, waiting for results of study

Financing: Spend no more than $18.5 million of reserves

Deputy Mayor Tim Mahoney

Site preference: Downtown

Financing: Spend about $15 million of reserves

Commissioner Brad Wimmer

Site preference: Downtown

Financing: Wouldn’t say

Commissioner Melissa Sobolik

Site preference: None, waiting for results of study

Financing: Spend no more than $18.5 million of reserves

Commissioner Mike Williams

Site preference: Downtown

Financing: Spend no more than $13 million of reserves

Readers can reach Forum reporter

Erik Burgess at (701) 241-5518