Subsidies to Fort Smith center endorsed

Fort Smith notes business benefits

FORT SMITH -- The city's convention center made more money last year than in 2017, but expenses were greater and it still required a subsidy from the city's general fund to cover nearly half of the expenses, according to a report presented Tuesday to city directors.

Overall revenue was $833,546, a nearly 5.7 percent jump from 2017. It was the fifth consecutive year of revenue growth since 2014, when the convention center broke the $700,000 mark, General Manager Tim Seeberg said.

Even with the record revenue, the convention center still needed a $775,448 subsidy from the general fund to meet the $1.6 million in expenses last year.

Directors continue to subsidize the convention center even though officials have difficulty finding enough money each year to meet city expenses.

"It's worth keeping open," Director Keith Lau said of the convention center. "The question is how do we fund it with all the other budgetary restraints we have [on the general fund]."

The report listed a total financial impact to the city of more than $8.8 million from 26 selected convention center events and nearly $230,000 generated in local sales taxes, which is the city's 2 percent sales taxes and the city's 0.6 percentage point share of a 1 percent countywide sales tax.

Director Neal Martin said the $230,000 in tax revenue reduced the effect of the convention center's expenses on the budget to about $495,000 while adding $8.8 million to the economy.

"Spending half a million to make $8.8 million sounds pretty good in my opinion," he said.

One of the 26 events the report focused on was the "Battle at the Fort" volleyball tournament, which was Jan. 26-28, 2018. The report said it had a total economic impact of $695,724 that generated $18,088 in local taxes.

The figures were based on 2,000 overnight attendees paying an average per-night room rate of $90, and 1,000 local attendees. The impact total included transportation, food and beverage, retail, recreation, space rental and business services, the report said.

The total number of convention center events for 2018 was 264, up from 248 in 2017, the report said. The report identified events as the theater, large center events, exhibitions and trade shows, regional conventions and meetings, state conventions and meetings, and local events.

Expenses in 2018 were more than 10 percent higher than those in 2017, the report said.

The report said expenses increased because of unexpected building repairs, such as a chiller motor failure and roof damage from a storm, $58,000 mainly for the first phase of a multi-year carpet replacement project, greater equipment rental expenses, and a $34,000 increase for part-time contract labor.

The report also listed existing and emerging capital needs that Seeberg said have been planned but not budgeted.

The carpet replacement will continue through at least the end of next year at a total cost of $225,000. The report says the convention center's 20-year-old banquet chairs need replacing at a cost of $300,000, the center needs a new scissor lift that is estimated to cost between $15,000 and $35,000, and the performing arts center's lighting and sound system needs to be upgraded at an estimated cost of $200,000 to $250,000.

NW News on 02/13/2019

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