Ad hoc group seeks more info on convention center funding, operations (with video)

Members of an ad hoc group charged to analyze funding and/or operations options for the Fort Smith Convention Center ended the first meeting Friday (April 23) with a list of at least four requests to the city staff for more information.

The committee was formed by the Fort Smith board of directors after it spent more than 18 months trying to come up with a solution. The board is asking the ad hoc committee to report back with ideas in 6 weeks. City Director Don Hutchings was the only director to attend the Friday meeting. (Link here for more background on the committee and the convention center funding issue.)

Members of this new committee are:
Tom Caldarera, restaurant owner
George McGill, businessman/insurance
Kevin Moran, Sparks Health System
Lavon Morton, ABF Freight System
George Moschner, Baldor Electric Co.
Craig Rivaldo, Arvest Bank
Ben Shipley, attorney

The committee elected Moschner to serve as chairman.

Fort Smith City Administrator Dennis Kelly, Deputy City Administrator Ray Gosack and City Finance Director Kara Bushkuhl reviewed the financial history of the convention center and how state turnback funds and convention center revenues were dispersed.

Four broad areas in which the committee wanted more information were:
• Comparing the Fort Smith Convention Center operations and funding to similar facilities in other cities;
• Review existing convention center expenditures, revenues, marketing efforts, possible new revenue options and possible cost cutting options;
• A review of the possible cost and revenue structure of the recommended merger of the Fort Smith Advertising and Promotion Commission with the convention center operation; and,
• Information about the pros and cons of a third-party operating the convention center.

Moschner and Shipley commented several times about the importance of understanding underlying cost and revenue issues before being able to consider new funding and operations options.

“That (possible cost cuts) would be addressed first in a business setting, so I think it should be addressed here,” Shipley said.

Moschner went further, saying he wanted to “investigate” the operations of the convention center with respect to local competition from other meeting venues. He stressed it’s important to know the convention center’s “chance of survival.”

The committee heard from city staff and Claude Legris, executive director of the Fort Smith Convention and Visitors Bureau, about what they described as a positive economic impact the convention center has on the regional economy. Legris and Convention Center Director Frankie Hamilton listed several large conventions that fill for many weeks out of the year hotels and restaurants in Fort Smith, Van Buren and even Alma.

Committee member Tom Caldarera, a restaurant owner, said shutting down the convention center is not an option.

“You would lose a lot (of tourism business),” he told the group.

The early consensus of the committee was that closing the convention center would not be on the consideration agenda.

The discussion about considering a third-party operator raised several potential problems. The first problem is in finding a professional operator willing to manage a convention center without at least one full kitchen. Hamilton explained that when the center was built it was decided to not build a full kitchen and instead build an area for caterers to stage food. Gosack agreed, saying “complete control of food and beverage” is about the only way for the center to be financially attractive to a third-party company.

Caldarera reminded other committee members that the city promised area restaurants and caterers that the convention center would be open to their operations. He said many companies have made investments based on that promise. Gosack confirmed Caldarera’s history, saying the city board “made a philosophical decision” to set up the convention center so that it would benefit the regional hospitality industry.

“So I think the downside (to a third party operator) is angering the local restaurants and vendors,” Gosack said.

The committee agreed to meet next at 11:45 a.m., May 5, in the Green Room of the Fort Smith Convention Center.