…you must be blind, deaf, and incomprehensibly stupid. Time to find a new source of rainbows and unicorn farts.

The bill that would have allowed cities to raise a third penny sales tax for special projects was shot, hanged, poisoned, racked, gassed, lethally injected, drawn, quartered, and waterboarded by the House Local Government Committee.

While most of the arguments against the bill came from people saying they didn’t want to tax the poor to pay for something they’ll never use (a good argument), the main problem I have with funding a new EC with a sales tax is that it’s a crappy way to fund an entertainment building. Tax Bed, Board, and Booze instead. This will still give us enough revenue to build an EC without putting an undue burdon on people buying groceries or yet another set of clothing for a daughter who grows faster than our national debt.

The most unfortunate (and telling) part of the linked article is the paragraph quoting Jane Page of the State Department of Revenue.  She’d like to keep the option open for the state to raise sales taxes in the future without having to pile on top of increased local taxes.  I wonder how many legislators “can’t wait” to raise the sales tax to build all kinds of wonderful stuff.

Now that the city has to go back to the drawing board to come up with a workable idea, maybe they’ll be a little more open-minded about better locations and funding sources. If not, we’ll still be talking about building a new EC 20 years from now.

23 thoughts on “If you didn’t see this coming…”
  1. (Sorry to re-post this, but it fits better in this thread)

    There you have it Events Center Task Force, you picked the wrong funding mechanism to fund the flawed plan you have presented. Looks like it’s time to scrap that plan and start over.

    Here’s what we should do:

    A. Exercise the option on the Cherapa site & design a nice, modern 12K seat EC that can be expanded to 16K down the road. Budget $110 million.

    B. Push the Convention Center SW to Western Ave. Make half of the addition floor space & half parking ramp. Take out the wall next to the Arena & add the modular seating. This would get the CC over it’s requested 100K sf of contiguous space. Budget $30 million

    C. Match the School Board’s $5 million to renovate/update HWF. Budget $5 million.

    D. Invest $5 million in improving access & parking at the Cherapa site.

    $150 million total, $19 million less than the TF had budgeted. Two facilities (which the TF has basically endorsed), with 2 sets of naming rights & phase the project so you can use one while the other is being built. Fund it by floating Muni bonds and pay for it with B&B taxes.

    Do that and we’re one up on Sioux City & Fargo. The two facilities (EC & CC) are close enough where they can draw on each other’s capacities, yet far enough away that you don’t have everyone crammed into one area when you have a couple games, a concert and a convention or trade show over the same weekend.

  2. There is also a bigger issue here, it takes the EC as a campaign issue off of the table and only makes Staggers and Huether look better because they called out the failed funding source from the beginning. It also makes candidates Costello and Brown as the failed leaders they are. As city councilors they supported this silly plan and as a task force member and the president of the municipal league they didn’t have enough clout to get this passed. And it’s not like it was a close vote 10-3. FAIL!

  3. Costello is now at the top of my list since I got a free skyforce ticket from him! Well maybe Soucups’ paid for it through his campaign!

  4. Here’s why I think the above plan could actually work. According to the City Budget, we currently charge a 1% lodging tax on room stays that currently generates a whooping $600K of the total $154 million in taxes collected by the City.

    You finance $130 million and you’ll be paying about $7 million a year. Sioux Falls should kick it’s lodging tax up to 6%, which will get you half way to the $7 mil. You could get the second half by raising the Entertainment tax from 1% to 1.5%.

    The two facilites could operate at break even for the next few years and it wouldn’t hurt us at all. Over the next decade you’ll see at least 3 new hotels go in along with several hundred million $$ worth of new, mixed-use development. As our air service improves and we slow the effects of urban sprawl, we can reach critical mass that will finally move us from cattle town to small city.

  5. Hooray, state government speaks for citizens. The events center must wait till a ‘people’s mayor’ is elected and the corrupt syndicate is disbanded. Then, it can be developed for half and citizens will be onboard with funding sources. Munson’s nearly gone. It’s very important to do everything possible to keep him away from the city’s checkbook.

    Repeal Home-Rule.

  6. It will be interesting to see which ones voted against this. Rep. Vandelinde is the only one I had a reply from, and I had emailed all of them.

  7. I’d really like to know how these facilities would break even. I’d be willing to bet everything I own that the city subsidy would make the Pavilion’s yearly look like chump change.

  8. Red- 3 voted against, Solberg, Curd and Lederman. No surprise there, scroll down to read the minutes;

    cc

    I got a chuckle out of Munson’s quote;

    “I don’t know what the next option really is, and that’s unfortunate because Sioux Falls is such a forward thinking city and Sioux Falls has been such a leader in growth and helping the state,” Sioux Falls Mayor Dave Munson said.

    Well, Dave, forward thinking communities don’t raise regressive taxes to build entertainment facilities. You plan was not PROGRESSIVE it was regressive. I have often thought if the EC TF would have gotten a tenant and had at least 30% of the funds needed donated, they may get backing from the public in the form of BB & B taxes. This plan was blantantly flawed. These are smart guys, but I think arrogance and esteem clouds their judgement.

  9. From a statewide perspective this is absolutely the best outcome. These gubermint folks (state and local) either don’t have a clue or are denial of the fiscal trouble over the horizon.

    This week Georgia and Tennessee continued collecting fewer tax revenues – they’ve reduced revenues every month for over 20 months. Today New Jersey declared an emergency as their revenue collections have fallen off a cliff. Gov Christie froze aid to 500 school districts and universities and seized unspent state money across the state.

    “One state retiree, 49 years old, paid, over the course of his entire career, a total of $124,000 towards his retirement pension and health benefits. What will we pay him? $3.3 million in pension payments over his life and nearly $500,000 for health care benefits — a total of $3.8m on a $120,000 investment. Is that fair?

    A retired teacher paid $62,000 towards her pension and nothing, yes nothing, for full family medical, dental and vision coverage over her entire career. What will we pay her? $1.4 million in pension benefits and another $215,000 in health care benefit premiums over her lifetime. Is it “fair” for all of us and our children to have to pay for this excess?”

    http://www.app.com/article/20100211/NEWS/100211042

    We are still waiting for an HONEST analysis and assessment of the South Dakota budget and its ponzi-retirement system. It’s becoming apparent that SD journalists are incapable providing it for all it appears they can do is regurgitate sound bites.

  10. Scott:

    “I’d really like to know how these facilities would break even.”

    I’ll take a stab at it. I’d say you’d have to divide and conquer. Have the EC home to the Stampede & Skyforce, both could restructure both their high end (luxury boxes) and low end (more cheap seats) pricing tiers. Lock in the Summit tourney and go after some NCAA/NIA rounds. Have them aggressively pursue 5-6 major concerts a year.

    As for the CC/HWF area you still have the Canaries, the Relays, the Storm, and special events like the Dakota Bowl & Ribfest. Second tier concerts like what we already get. How about we go after the Div. 2 National football title game since USF is moving up to that level? Or the D2/D3 Hockey tournaments? Have the CVB show us they can land 3-4 more regional Conventions beyond what we already do.

    After that..who knows, Dora on Ice? UFC? American Idol? NBA/Olympic exhibition teams? If we can meet the pent up demand the CVB and others say is there and that even means a 10% or 20% increase in revenues I’d say we’d be in the black.

  11. There’s a lot of wishful thinking in that list…and I particularly laughed at the inclusion of the local sports teams. Been to a Skyforce game lately? Every person can have a row to themselves, and placing them in a larger facility will just spread those same people farther and farther from each other. Outside of the first game or two, they won’t get an attendance jump. By the time it’s built, at least two of those teams will be defunct anyway. As for the various tournaments and exhibitions you list, that’s the sort of crap the Mayor’s pals have used as proof this is needed, but the reality is that at best you’d have a Summit League tournament every five years or so.

    As for concerts, there will be no change in the quality or amount of shows we get. I know EVERYBODY thinks their favorite band will now come to town and play sold-out shows, but it will not happen. Yes, the first year it’s open there will be a handful, and some of those will do quite well, but the first time 2,000 people show up in a building designed for 12,000 every promoter will go back to skipping this city.

    The concert industry has also changed. 20 years ago, touring bands were on the road all year, which is why we saw regular appearances by Cheap Trick, AC/DC, and other road veterans. That doesn’t happen anymore. Tours are generally 30 – 40 shows these days, hitting only the major markets. It’s not uncommon for Minneapolis and Omaha to be skipped. This is not going to change, especially as more and more people stop listening to terrestrial radio (a truly dying industry) and program their own personal stations through online services (Pandora, Spotify, Last.fm, etc.). The days of the cross-genre household name is long gone.

  12. the reality is that at best you’d have a Summit League tournament every five years or so.

    So that’s why they’re hosting it for the second time in a row. Got it.

    I doubt the summit league will leave SF – unless some other city builds a better facility and it’s available.

  13. You don’t think they got this gem to help “prove” the need for a new EC? Just like the under-the-table buyout of Elton John tickets to create a fake sellout that “proved” this city supports concerts?

  14. I think they brought in the tournement because it would be a great economic boost to the city and get us on national TV – even if the arena is an embarrassment.

    The Elton John thing I hadn’t heard about.

  15. Remember Scott, we built the Arena in the 1961 recession and it was able to hold 10% of our City’s population. Some of the old timers say we have a lot of these same types of gloom predictions back then as well. Too big, acts won’t some to SF, too expensive etc.

    There are also trends that favor expanding our facilities. As airfare becomes more of a pain, more people will drive longer distances to attend events. Being at the intersection of two interstates gives is an advantage SC doesn’t have. Instead of one person flying to a convention, more people are packing up the whole family and making a week of it.

    If our City’s growth rate continues to outpace SC or Fargo over the next couple decades, we will be in a much better position to attract acts than either of them.

    The secondary impact is what makes the alternate plan go. I know that’s speculative, but there’s a shitload of money on the sidelines right now that will not be once the Economy turns back around.

    If a downtown EC shaves several years off the timeline to build out Uptown, redevelop Schoeneman’s & Sioux Steel’s sites, and a couple other major pending projects it will make no difference if we went several years with break even or losses on the front end.

  16. Sy, you act like Fargo and SC are meccas of entertainment. After a nice run of a couple of years, SC has very few shows these days in their venue (and a lot of cancellations). Fargo is a whole different animal for the simple fact that they have a real college. That’s the whole reason that building exists. Yet, they’re not doing well with shows either. Should I go through the list again?

    Even in Minneapolis, huge artists are now skipping the Target Center in favor of the 20% smaller Excel Center in St. Paul.

  17. The future of live music is not in arenas; it’s in smaller, more intimate venues. That’s why the most vital step this city must make in the near future is hiring innovative, open-minded managers for both the Pavilion and the Orpheum Theatre.

  18. Scott:

    Excellent points, especially the latter part.

    But I will submit that what seems like a large (12K-16K seat) Arena to us, is actually the smaller venue you speak of that national acts are gravitating to.

    Excel holds 18K for hockey and is kicking butt precisely because it is a newer, better designed and overall better experience that other TC venues. That’s what we should be shooting for.

    http://www.xcelenergycenter.com/arena.jsp

  19. But 18,000 in St. Paul is still less than 1% of the area population. It’s 10% here. There’s less than 5 acts that could fill that, and none of them are playing here no matter what we have. The concert industry is certainly not a “if we build it, they will come” business.

    When I say smaller buildings, I’m even talking about in cities like Minneapolis. The State Theater up there are having more show than ever, and that is happening all across the country as 99.9% of the music industry is becoming a niche act.

  20. Hey Scott. You have some really great posts in this thread. Congratulations. YOU are spot on, particularly in post #12. Your observations should be required reading for anyone who may be on our next “new & improved” EC task force.

    You mentioned sports venues. Like you, I also had a good chuckle with that one. Skyforce games? Echo chamber. Same with our other ‘pro” sports teams. Of course our beloved “Storm” with it’s checkered ownership will be in yet another league with another group of star athletes laying their talents on the field for 200 bucks a game. And then we call it “PRO” sports to get you and me thru the turnstiles for “pro” sport ticket prices.

    Your points are all very valid. especially about putting people in the stands. Competition is fierce for acts that have the POTENTIAL to seat more than 6,000. Sioux City has a 12,000 seat EC, and no one here has yet to tell me the acts Tyson has attracted in their seven years of existence that put more head count in their seats than our own existing Arena could have.

    And your take on concerts? Absolutely the best I have read here or anywhere else for that matter. Here are some big names who have played in Sioux City since the Tyson Center opened. Bill Cosby, Sheryl Crow, BB King, Bob Dylan, Wynton Marsalis, David Copperfield, Willie Nelson, Jewel, Alison Kraus, and Jerry Seinfeld. Impressive acts to be sure. But guess what? They played at the ORPHEUM THEATRE in Sioux City, not the Tyson “Events” center.

    Scott, l3wis. You know a lot more about smaller venues than I could ever hope to. How does our own Pavillion or Orheum theater for that matter compare in size to the Orpheum theater in Sioux City? And if they are comparable in size, WHY CAN’T WE GET THOSE KIND OF ACTS?

  21. Scott says:

    Sy, you act like Fargo and SC are meccas of entertainment. After a nice run of a couple of years, SC has very few shows these days in their venue (and a lot of cancellations). Fargo is a whole different animal for the simple fact that they have a real college.

    If I might add a little to this. The Fargo “events” center now has seven full seasons under it’s belt. In it’s third full year of operation, 2004/2005, they had 627,501 in paid attendance. It has steadily declined each year since then, Last year, the 2008/09 year they had 404,442 in attendance. And keep in mind those numbers are skewed relative to POTENTIAL for Sioux Falls because Fargo has a real college sports program with real college hockey games that SELLOUT FOR EVERY HOME GAME. That’s 12,000 a game, something SF will never do for any venue, sports or entertainment.

    I think those numbers back up your case for the changing entertainment industry.

  22. Ghost of Dude says:

    …So that’s why they’re hosting it for the second time in a row. Got it.

    I doubt the Summit league will leave SF – unless some other city builds a better facility and it’s available.

    If the Summit league is our ace in the hole, we’re in big trouble.

    The Summit League tournaments 14 games last year averaged 2477 in attendance in a sea of empty seats. None of the games were a sellout and the championship game with NDSU in it had an attendance of 3804…well under the 6300 capacity of the Arena.

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