Tuesday, January 02, 2007

Open Thread #10

The first post of 2007. Wazzup?

Topics covered: Toppers restaurant, empty Target building, Alerus Center debate (city finance director John Schmisek comments)


Anonymous said...

Happy New Year! I noticed the other day that it looks like the Furniture Row store is looking pretty far along. Any other announcements that anyone has heard about what may be going in that space along with it?

Canada1 said...

2 questions myself and my Canadian friends have: 1. Whatever happened to Topper's Restaurant? It was the best place for burgers, and you could pay in Canadian dollars at par. Tough to find something comparable (We have tried Culvers and Campbells Wood Fired Burgers...just not the same) 2. Is anything ever going to go in the old Target Store. Herbergers would be a nice fit.

dale said...

Toppers burned down a few years ago. Various rumours circled around about how and why that happened, but the bottom line was that the owner, who at one time had a string of fairly successful restaurants in town, was not able to rebuild Toppers. Players, another of his, suffered a similar fate, though in the form of a wrecking ball, rather than the flame.

It is sorely missed, and there is no substitute, though Campbells comes pretty close.

At this juncture, it doesn't look like anything will be going into the Target space. There is apparently some sort of condition that precludes another discount/department store going in that space, and no one else needs that much room. The mall has a hard enough time keeping small stores filled, subdividing the Target space would be foolish.

There was a rumour that a theatre was going in there, but that appears to be as unfounded as a decent theatre being built in the Canad Inn complex.

Anonymous said...

How did the country show do last Saturday at the Alerus? Why is there virtually no reporting on these events? I believe that The Alerus is at the point now where citizens should demand a financial break down of every event that takes place out there.

The last two arena shows featured two very successful national tours, but the Grand Forks dates lost 50K each. AND, it's never been explained how a rental facility can lose money on a date.

Oh well, evidently the citizens have come to agree that the property is a very large failure, they've come to live with it, and just tuned out.

wendian said...

The country show did not do well at all...but I think much of it had to do with weather (it was AWFUL that night, if you remember). I hear estimates of anywhere between 1500 and 2000 people were in attendance. I was also told that the tour has not been getting large crowds at most of its destinations. It was a decent enough show, perhaps they just weren't "big enough" names to really draw a huge crowd and should have been in a smaller venue instead.

ben said...

I would be willing to believe you about your figures (as they would not suprise me), however, some backing of the lost $50K with some sort of statistical or factual info. would be nice so readers can check it out on their own. The center is certainly not making money right now, and nobody is denying that. I would just like to know where you got your exact figure.

dale said...

Someone should find the statistics of show attendance at the Alerus (or dig them up if someone's already done the legwork) and see what, if anything, is consistently filling up the joint.

Since I first moved here in 1980, I was disappointed with the predilection towards country music, though I still managed to see Metallica, Sammy Hagar and the Tubes here (front row at the Fritz! Twas the last [to my knowledge] rock show there, as the staff didn't take kindly to Fee Waybill's attempts to start a riot.)

But you'd think that country would generally be profitable in North Dakota. I'm not sure that's the case, though. The few rock shows I've seen at the Alerus have ranged from excellent to decent to abysmal attendance, so that's not a clear cut solution either.

The bottom line, though, seems to be that the Alerus is quite a bit larger than a community our size would merit. Hopefully, as time goes on, the population will grow, become less fractured, and fill the arena.

In the meantime, if having these small shows means recurring losses, then, from an accounting standpoint, they should see if they'd lose less money by just having it stand empty most of the time, save football and the occasional "Cher Farewell Tour" show.

vcsuvike said...

The Alerus Center was built the proper size for Grand Forks. The problem is the music industry. There are fewer tours, tickets are higher, and the centers are asked to eat more costs. Until the industry changes, you will see more smaller concerts there's too much financial risk to bring big acts.

Anonymous said...

Wow, where to start?
Ben...The 50K number fell out of Hal Gershman's mouth when he was ragging on the UND student body for not supporting the Black Eyed Peas show.
wendian...I love your "glass half full" attitude but, high demand reserved ticket shows sell the majority of their tickets right away when the show goes on sale. So, the "bad weather" excuse shouldn't really apply.
vcsuvike...The issues that you mention were indicative of the market before, during, and after the center was built. That didn't stop the pro campaigners. If you recall, their campaign promises, and projections were consistantly compared to markets MUCH larger that Grand Forks. And also, much less geographically isolated. Also, their numbers assumed that practically every month the venue would be hosting professional wrestling, monster truck rallys, and that type of event.
Dale...you hit it on the head with this statement: "The bottom line, though, seems to be that the Alerus is quite a bit larger than a community our size would merit." That's true but, the grim reality is...at that magical time when the population base fits with The Alerus' size...the venue will need very much more maintenance dollars pumped into it. Remodel, replacement of aging equipment, new equipment to meet the needs of the emerging, and developing marketplace. That sort of thing. We all know who pays for that.

To all posters...remember, these are private promoters that are taking a bath on these events, (including the city). The end result is, it sends a message to the industry to bypass Grand Forks with events. Not good.

I'd still like to know, and the citizens should demand it, how does the venue lose 50K on a concert when it's a rental facility? The answer is...the venue is giving concessions to promoters to bring the events to town. What concessions?

Anonymous said...

I have the solution to all of Grand Forks woes. Weak population outlook, etc. It's very simple...Immigration. The current liberal Congress will extend a golden hand up to migrants. The future immigration amnesty program will allow all illegals to gain amnesty AND sponsor 5 family members each. That's a potential SEVENTY MILLION new residents in the U.S. AND...just the type that Grand Forks community leaders love. Low skilled, uneducated laborers. So, key on developing these types of industries and be ready for the influx.

Mattfacingsouth said...

The only act that got me out to the Alerus was Barenaked Ladies. There is certainly a demand in town for singer/songwriter acts other than country.

But whoever was talking about the state of the industry is spot-on. It hurts us little guys, too, when the competition (especially among the up-and-coming younger clientele) is iTunes and iPods. I'm guilty of it as well - I'd much rather spend an evening listening to an eclectic mix of soul, funk, r&b, jazz, and rock than go see the Black Eyed Peas, who really do nothing for me and certainly nothing really that hasn't been done already.

Is it that there's simply nothing more to say musically and we're all going to be stuck reminiscing about the past? Or is it that the fresh stuff out there will never see the light of day (vis-a-vis live concert tours) because of decisions high up in the industry?

Maybe both?

Anonymous said...

It wasn't Toppers that burned down, it was 32 St. Eatery, which was previously Toppers. Both places were pretty good.

dale said...

It wasn't Toppers that burned down, it was 32 St. Eatery, which was previously Toppers.

Indeed it was, thanks for the correction. About the only remnant of either is the "Exploded Pig Sandwich", which you can (or could, haven't looked this year,) find at the "Inferno" stand at the Ralph. Don't know if it's the same as the one they sold, but at least the name's the same.

It hurts us little guys, too, when the competition is iTunes and iPods

Your competition isn't iTunes and iPods... live music is a social activity, listening to music by yourself is not.

Major concerts are something of a "destination" -- whether to attend or not is generally a long term decision, factored by cost and interest. Charge me $20 to see someone I like, I'll go. Charge me $50 to see someone I'm less interested in, probably not.

Local bands, however, playing in clubs or cafes is a totally different animal. Beyond the fanbase (whatever that works out to be,) attendees are largely those who decide to go to the venue based on other factors, whether food, drink, friends or habit. The music being played is largely irrelevant until you walk in the door.

In either case, though, it's a social event -- the act of getting out of the house.

Anonymous said...

Matt, you're just over analyzing the situation. It's a simple equation...a venue like the Alerus needs a MUCH larger marketplace to support it. Very simple. All the "supporters" knew that in the campaign stages but, hey...it wasn't their money, or risk building the joint...so why not? Besides...more sales of cheap off sale liquor.

Simple actually.

The next big Alerus issue wil be the convention center fiasco. The Commission gloats about how well they're doing competing with the local private sector now that they've dummied down all the menus and pricing. What's next? One menu and pricing for locals, and another for out of town/state conventions? And, how will this effect the fact that the boys at The 'Nad want the catering. One fiasco after another. Thanks guys.

mattfacingsouth said...

Point taken that the Alerus just needs more population to drive income. How many times per year are you going to get the same 20,000 or so people that are remotely interested in live music to fork out $40-200 per ticket? I know my family can only do that once or twice per year and like Dale said, it had better be a good act.

As far as local music it's kind of the same thing, but really my analysis comes from talking with musicians all across the country (who are definitely in the same boat nearly everywhere). People used to go out to hear the band, now it's more about socializing - the band becomes background music.

Okay, fine by me - social atmosphere is a good a reason to go out as any, but what's the point of paying a band to play live music when you can do it nearly for free with iTunes? Or a jukebox... or karaoke... or a DJ... wash, lather, rinse, repeat.

My point, er question rather, is why is the band no longer the draw in most venues?

My theory is that somewhere along the line music became about the listener's image and attitude and stopped drawing the people who were in it for the music, which are the ones that become a band's fan-base.

The cycle continued and the music itself became about image and attitude, and most of what's popular today I can't even call music, or at least good music. Is there anything worth saying musically anymore?

For what it's worth, my band is marginally successful, but I notice that the "following" is primarily friends and family. Ocassionally we get new people that come out every other gig or so, but the places that we play may indeed be the culprit in why people don't come out more.

Here are the excuses we get (and they may just be excuses): it's too expensive, the service is bad/slow, you guys start too late, I can't find a sitter, the game's on/we're going to the game, we went out last weekend, none of my friends can go.

So while I agree that going to see live music is about the social aspect, I reject the notion that it should be, at least primarily.

wolfgf said...

I hope we can get beyond all the second guessing about WHETHER the Alerus should or shouldn't have been built. It's here and I can't imagine GF without it.

As for its size, I don't think you could have built it much smaller and still been able to accommodate football crowds.

I think we should focus on the management team. How effective are the Alerus marketing efforts? Is the staff competent? Resourceful? Creative? My guess is "no" from the ads, placement and collateral materials I've seen. Also, is it possible that all the red ink has severely hampered their ability to advertise the facility? When businesses suffer setbacks, advertising is the first thing to go, exacerbating the problem...

Anonymous said...

I'm also very concerned about the massive operating loss of the Alerus. I'm wondering, what is the cost of the debt service on the property? Specifically, add the operating loss, the 400-500K tax infusion per year, and the cost of the debt. What's that number? Anybody know?

vcsuvike said...

I agree with WolfGF that people need to stop fighting about why the center was built and focus on how things can be improved (constructively). I think more locally created events and conventions will help. I also think working with the MTS Centre in Winnipeg to help bring acts to Grand Forks might help.

Anonymous said...

Grand Forks' blessing-Where else would you find facilities like the Alerus, Ralph, Fritz and Empire all in one community our size-may also be its curse.

Anonymous said...

The full cost of The Alerus will never be disclosed. The citizens would go absolutely bonkers if they saw the number.

Canada1 said...

Thanks for the info about Topper's. Hopefully it comes back someday.
With regards to the Alerus, don't forget that Winnipeg now has the new MTS Center which took a lot of business away from G Forks and Fargo. There are big names coming to town every month.

wolfgf said...

Kudos to Minnesota's Keith Ellison, America's first Muslim Congressman. He's handling the bigoted attacks with great tact and compassion.

jschmisek@grandforksgov.com said...

I happened across this blog and find it very interesting. I would like to respond to the comments below:

anonymous: 12:07 pm, 1-3-07 "...I'm wondering what is the cost of the debt service on the property? Specifically, add the operating loss, the 400-500K tax infusion per year and the cost of the debt. What's that number? Anybody know?"

anonymous: 4:45 pm, 1-3-07 "The full cost of the Alerus will never be disclosed. The citizens would go absolutely bonkers if they saw the numbers."

I am assuming the above comments come from two different individuals. The one at 12:07 seems to be simply seeking information. The one at 4:45 seems to believe there is a conspiracy to keep information secret.

For anonymous at 4:45 pm, our effort to keep this information secret is not working very well, as we publish a copy of our 200+ page Comprehensive Annual Financial Report (CAFR) on the city web site every year. I can personlly say that, since the Alerus was opened I have provided the full information to media and others who have requested the information, approximately 6 to 8 times a year.

For anonymous 12:07 pm or anyone else interested, you can find a copy of the 2005 CAFR by going to www.grandforksgov.com. Then go to "city directory", "Department Listing", "Finance" and "2005 Comprehensive Annual Financial Report (CAFR)". On pages 47 to 50 you will find the information you are seeking.

I will summarize for you:

Annual Debt Svc $4.9 million
(paid by 3/4% sales tax approved by public vote in 1996) You will see a significantly larger amount in the principal paid on capital debt line item. In 2005, we refinanced the Alerus debt in order to save a little over $4 million in interest over the term of the debt. The large amount in this line item is the payment of the old debt with the proceeds of the new debt.

Sales Tax for operations $323,860
(paid for by 1/4% hospitality tax approved by public vote in 1996)

Operating loss subsidy for 2005 $195,000.
(paid for from sales tax dollars in the economic development fund)

I believe as some have said, we now have this building after a vote of the public. Let's try and make it as opertionally efficient and effective as possible. The entertainment industry market is changing and every effort has to be made to maximize the asset we have.

A heads up for those who are interested. On the January 22, 2007, COW a report on the economic impact of the Alerus will be presented. I do understand that some will be interested in this and some will not care what it reports, as they did not want, do not want and will never want to accept that the Alerus provides a benefit to the overall community.

Since I do not routinely look at these blogs, I do offer my direct e-mail address below and my phone number 746-2620, for the purpose of answering direct questions in relation to any city finance issue.

Thanks for all of those who have and interest in making the Alerus an asset that can benefit all of us. I hope this information is useful and I am always available to answer questions.

dadinggf said...

In response to wolfgf's comments on management, I would agree. There have been a number of employees who have cycled through the Alerus Center, however the leadership has remained relatively the same.

GrandForksGuy said...

John, thanks for taking the time to share those numbers with the readers of my blog. I appreciate it!

C. Y. said...

Wow, GFG ! ! !

Can't get anymore direct answers than from "His Schmisekness"

Any "Anony-mouseness' have a reply??




GrandForksGuy said...

'DAZ just had another story on their news tonight about all of the new businesses coming to town, but - like usual - they only stuck to the very basics and never actually mentioned any specific new businesses (other than Bobbi's...and that's old news). How often can they do stories like this that, in reality, I would think of as a non-story (not really breaking any news of any sort)? Come one...there are new businesses out there that you can actually name. Stop saying things like "find out after the break what new stores and restaurants are coming to town in 2007" when you never actually intend on providing any such list! This fluff drives me nuts...

mattfacingsouth said...

GFG, I saw the report and thought the exact same thing! Why do they waste their time reporting basically nothing. They could have saved about 90 seconds of mine by saying "there are going to be new businesses in town; in other news..."

Anonymous said...

The Alerus Center economic impact blah, blah, blah. Whose buyin' that mumbo jumbo? It's embarassing to even see a "city official" still playing that card? How much of that is an offset? Meaning, for example, if the convention center side does one million a year in sales, how much of that are sales that were just redirected from other preexisting businesses/banquet facilities? 800K?, 900K? I'd reckon it's almost that high. Politically embeded interests never include the offsets; interesting.

Who cares anyway? It's history. The point is, we all understand campaign promises, what we're now witnessing is campaign *lies*. Thanks guys! And also...Mr. Schmisek, there's no need for you to pipe up in the blogosphere. You have enough outlets. The cities' own propoganda machine, and conventional media has always been there for "the city". It's fine for you just to stay there. Besides, us "anons" are just whackos posting anonymously...right. ;-)

Also..."F" your voodoo mumbo-jumbo, how much REAL money did the recent country show lose? 50K again? Like the B.E.P. shows and the Cirque show? I know, I know, it was offset by the MILLIONS of dollars of "economic impact" that they provided.

Oh please.

Oh...I would like to know how a rental facility loses so much BTW. What are "we" giving promoters to realize those bah-zillions in economic impact?

Anonymous said...

I agree with the prior anon post. It's funny, if you think back to the campaign stages, the citizens that really understand the market, wanted to support the project, but knew it was way too aggressive. If you jump ahead to now, you'll realize that the supporters are flat wrong, and the other side is dead on.

No "Regional" convention/banquet business with $15-20 lunches.
The market won't support National artists with $50-200 tickets.
The projected events that were used to sell the property in the campaign stages never materialized.

Now, we're supposed to be lead to believe that an event that loses 50K up front, in fact, spun off millions to the community.

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