Fort Smith Convention Center sees revenue rise in 2013

The Fort Smith Convention Center saw a drop in the number of events it hosted in 2013, but that did not stop the event center from having one of its best revenue years since opening.

According to figures presented to the Fort Smith Board of Directors on Tuesday (Jan. 28), the number of events hosted in 2013 was 237, while 2012 marked 256 events. The difference from 2012 to 2013 resulted in a 7% drop.

Even though the number of events declined, figures presented Executive Director Claude Legris of the Fort Smith Advertising and Promotion Commission showed $651,157 in revenues for the year 2013, up 4.3% from 2012's total of $624,428. Much of the difference, Legris said, can be tied to the convention center beverage service, which includes alcohol sales.

Highlighting the revenue directly tied to concession and catering, Legris said the convention center had $69,408 in sales during 2013, a 70% jump from 2012 when concession and catering only brought in $40,930.

"A lot of this is in our alcohol sales. It took us a while to come up with the right procedures, the right equipment. We did have to make purchase of cash registers, a portable safe … things of that nature. So we also had to get our procedures down. But you can see that we're picking up steam here," Legris said, highlighting the nearly 100% jump in revenues from the fourth quarter 2012 to fourth quarter 2013, when sales went from $9,685 to $18,258.

The 2013 numbers for the convention center mark its fourth best year since the convention center has been in operation, losing to 2010's figures by just more than $30,000 in revenue, Legris noted:
• 2010: $681,007
• 2008: $672,136
• 2007: $657,863
• 2013: $651,162.

During questioning from the Board, City Director Keith Lau inquired as to whether the closing of the Phoenix Expo Center (a result of Health Management Associates locating its new service center at the site of the expo center) impacted the convention center. He specially pointed to fourth quarter revenues, which showed a 46.37% increase from $139,032 in 2012 to $203,504 in 2013.

"Partly, yes," said Tim Seeberg, manager of the Fort Smith Convention Center. "We probably picked up a lot of that fourth quarter business in the last six months of the year. While my staff was worried we wouldn't meet our numbers, I was pretty confident because the phone lines were ringing. … And a lot of that was due to the expo going away. (It) certainly helped."

Even with the convention center posting one of its strongest years, the revenues will not be enough to make the facility a standalone outfit running at a profit.

The approved budget for the convention center last year was $1.535 million, though the approved budget for 2014 is only $1.507 million. While a sign that the convention center expects to continue posting strong numbers in the year to come, the city will still subsidize the operation at the tune of $855,553.

Questioned about the convention center's profitability, Legris said directly that the city would have to continue fronting the cost of the convention center.

"The convention center does not post a profit by itself. It is a cost to this city, so it is subsidized by the city each year."

But he pointed to the total amount of sales tax collected (hospitality taxes on hotel rooms, meals, etc.) as a result of events held at the convention center — $1.327 million — and the total economic impact of events held at the convention center — a $34.19 million impact — as proof that the investment from the city is a worthwhile expense.

"From what we can see, there's going to be operating deficit for last year. But there's the return — $34 million."