A $36,400 consultant contract to study the city-owned ShoWare Center’s economic impact caused quite the stir among the Kent City Council.
The council voted 5-2 Tuesday night to approve the contract with Community Attributes International of Seattle. The study results are expected to be back in about four months, said Ben Wolters, city economic and community development director.
Wolters described the purpose of the study as finding out after three years of operation the “real data that we can look to, to give us a very good and accurate answer as to how is ShoWare Center contributing to the economy of Kent?”
But council members Dana Ralph and Bill Boyce, each in their first year on the council, let it be known they were clearly against the arena study.
“I don’t think there’s any argument that the ShoWare is a benefit to this community,” Ralph said. “I’m just struggling with spending $36,400 at this point when we just don’t have a lot of money around. I’m concerned that we’re saying we’re spending this kind of money just so that we can say ShoWare is a benefit.
“I’m struggling with the fact that the outcomes of the study are not going to be things like a new operating model or a change to how we’re doing business or those kind of things. (It’s) a lot of money to be spending to justify what we already know.”
The ShoWare Center suffered financial losses for the third straight year in 2011. The $84.5 million arena lost $457,480 last year after losses of $398,013 in 2010 and $451,723 in 2009, according to ShoWare’s income statement released by SMG, the operator of the events center. The center had expenses of $2.53 million and revenue of $2.07 million in 2011.
The city continues to set aside money in its annual capital budget fund to cover the losses. That money could be used to help pay for improvements to city streets, facilities and other capital projects.
Boyce and Ralph each preferred the study to address how to stop the financial losses at the arena.
“I think the survey is a good thing and it’s going to produce us some good data,” Boyce said. “But I just don’t see how we cannot address the ShoWare because it is losing money. When you have 180 events a year and are still losing money, I’d like to see us focus our energy on the business model of ShoWare to figure out what we can do to at least break even.
“We need to focus on the model so we can stop dipping into the general fund every year to help balance it, so I will not be supporting the survey.”
The rest of the council wanted the report done.
“I think this study will not only help us pinpoint what the larger return on the investment is but will also help us identify ways we can make it one of the best investments and continue to help it be an asset for this community into the future,” Councilmember Deborah Ranniger said. “I think it’s going to give us a lot of good information at a critical juncture.”
Wolters said the survey will reveal hard dollar numbers through interviews with business owners to find out the financial impact events at the arena have on businesses. The consultant company also will interview ShoWare Center patrons to find out what businesses they frequent and what other businesses or activities they would like to see in the city.
“We want to try to understand what the facility is doing for the economy,” Wolters said.
Councilmember Jamie Perry wants residents to look at the bigger picture than simply the arena losing money.
“I think there is a tendency to look at an asset like the ShoWare and look at the bottom line and say whether it’s successful or not based on dollars that are coming in the door,” Perry said. “The truth of the matter is cities are not in the business of making millions of dollars but are in the business of adding to the community. I think in order to measure that community benefit, not just ticket sales, but what it’s doing for our business community, our downtown, property values and the intangible things that are not easily measured unless you have someone specialized looking at that.
“The ShoWare wasn’t intended to be a money maker. It wasn’t intended to bring in millions of dollars and offset the general fund. It was intended to be a community asset and add value to the citizens to the community and the only way to measure those intangibles is a study like this.”
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